Home Q&A Forum Can a collaboration agreement be terminated if one party fails to meet their obligations?

Business Contracts

Collaboration Agreement

California

Asked on Sep 22, 2024

Can a collaboration agreement be terminated if one party fails to meet their obligations?

I am currently in a collaboration agreement with another individual for a joint business venture, where we agreed to share resources, responsibilities, and profits. However, it has come to my attention that the other party has consistently failed to fulfill their obligations as outlined in the agreement, such as not contributing their fair share of financial resources and not meeting project deadlines. This has caused significant delays and financial losses for me. I would like to know if I have the legal right to terminate the collaboration agreement due to their breach of contract and seek compensation for the damages incurred.

Answers from 1 Lawyer

Answer

Business Contracts

California

Answered 577 days ago

I'm so sorry about this situation! The answer is yes. Under California law, a breach of contract occurs when one party fails to fulfill a legal duty the contract created and causes damages for the plaintiff. (California Civil Jury Instructions Number 303.) The measure of damages is the amount that will compensate the aggrieved party for all the detriment caused thereby or likely to result therefrom. (Cal. Civ. Code § 3300.) The law generally allows you to suspend your performance, much like if you stop paying your cell phone bill, your account is cut off. Also, any contract entered into after January 1, 1986 that does not stipulate the legal rate of interest, the obligation shall bear an interest rate of 10% per year after the breach. (Cal. Civ. Code § 3289.) This applies regardless of whether the agreement was written or done orally. Typically, the aggrieved party is entitled to be returned to the same position they were in before the breach. You have some options you can explore: You may want to consider just writing a formal demand letter. You can find it here - https://www.contractscounsel.com/t/document-form-checkout/119 You can file a lawsuit in your local court. If you’ve already sent a bunch of letters, then the truth is this is the only way to compel them to do anything. Best of luck! Dolan

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When does a non-disparagement clause end?

8.2 Continuing Obligations of Contractor. The provisions of Sections 1.3, 1.4, 2, 4, 5, 6, 7.2, and 8 shall survive expiration or termination of this Agreement for any reason. 9. Additional Provisions. 9.1 Non-Disparagement. Both Parties agree that they shall not, directly or indirectly, engage in any conduct or make any statement, whether in commercial or noncommercial speech, disparaging or criticizing in any way of the other Party, or any of its affiliates or clients or any of their respective owners, officers, employees or agents or services offered by any of them, nor shall either Party engage in any other conduct or make any other statement whether in writing, verbally or on-line, that could be reasonably expected to impair the goodwill or reputation of the other Party or any of its affiliates or clients. 9.2 Non-Solicitation. During the term of this Agreement, and for a period of twelve (12) months following termination of this Agreement, Contractor shall not, without the prior written consent of Company, directly or indirectly solicit for employment, employ or otherwise engage the services of employees or individual consultants of the Company. This subsection shall not apply to general solicitations, public job postings, or newspaper advertisements for employment opportunities.

View JOSEPH L.

4.8 (16)

JOSEPH L.

Answered Sep 28, 2021

Since Section 9, Non-Disparagement, is not listed as one of the sections that "survives termination of this Agreement" it is arguable that once the Agreement terminates pursuant to the termination clause of the Agreement then the Non-Disparagement restriction will terminate as well. If no term is stated in a written agreement then presumably the restriction on disparaging that the parties agree to is not terminated, since the contract did not specify one, and therefore is a continuing obligation of both parties. Damages is another issue though. If the contract does not specify damages if one party breaches the agreement by disparaging the other, then what are the damages? Courts hate to guess at damages so the non-breaching party would have to prove "actual damages". If the non-breaching party cannot prove a loss of business or a lost contract with a client as a "direct result" of the disparaging comment, then the court will not guess at damages so the most the non-breaching party may hope to gain is an injunction against future disparaging comments and an order that such comments be removed from the internet, if that is where the comments appear.

Read 1 attorney answer>

Business Contracts

Software License

California

Asked on Sep 14, 2021

What invalidates a perpetual software license?

What would invalidate a perpetual S/W license under a user agreement that was purchased over 20 years by the customer under a services contract for a unique legacy test system still in use? Would the customer be required to purchase an annual subscription S/W license under a new contract when they are not receiving any additional enhancements, features or benefits for legacy S/W maintenance, training or upgrades since it in stalled on legacy Linux operating system computer workstations? This legacy S/W still operates under it intended use and functions correctly as advertised. Replacing the legacy S/W with new subscription S/W license would also force the customer to purchase new computer H/W at an additional cost and impact other legacy H/W and S/W that interfaces the legacy perpetual S/W. This would create additional S/W develop to test and modify existing code to validate the change would still meet it original intent and test capability. I am curious if this proposal would violate any federal acquisition or ethics rules in attempting to force the customer to pay for a S/W license that are not required to perform its current function providing no additional value because the company has changed their business rules to follow the current trend to charge customers for subscription based S/W license? Their justification is they are charging another customer an annual subscription S/W license so we should also be required to go along with their new business rules.

View Octavia P.

5.0 (2)

Octavia P.

Answered Sep 24, 2021

A perpetual license generally authorizes use of a specific version of a software program indefinitely with the payment of a single upfront fee. However, software companies usually limit supplemental support and updates to a specific time (i.e., three years) and when that period ends, gives the customer the option to use the current version with or without paid support. Consequently, if there is a perpetual license in place your company should be free to continue to use your particular version of the software indefinitely without the requirement to move to a subscription-based plan unless your company requires tech support or any type of update/upgrade to continue to use the software which does not seem to be the case here. Nevertheless, the original user agreement and any ancillary agreements should be reviewed to determine factors such as the actual type of license and the powers/rights of the software vendor and your company to terminate or invalidate the license. If you would like a legal review of the user agreement/services contract you can post a contract review project on this platform, based on your question, to receive and compare multiple proposals from licensed attorneys who are registered and verified. Once you receive a response from an attorney you will be able to correspond through the platform to help with your decision to hire that attorney for the project.

Read 1 attorney answer>

Business Contracts

Non-Competition Agreement

California

Asked on Jan 27, 2022

My previous job had a secret non-compete closure

I left my previous job because I did not appreciate how I was treated when returning from maternity leave. I stepped down because with a colic infant and a national staffing shortage I couldn’t handle the work load, right after I stepped down they changed the schedule to minimize stress for the current programs director. They also allowed employees to unprofessional to me, when I returned the employee I trained and managed for years lectured me how todo my current position and asked if I had any disabilities or injuries because I had a C-section. This company for years treated me differently then other employees even though I ran and managed profitable programs. Before I left I asked Premier Aquatics that I wanted to be placed in a position similar to the one I had before, and they didn’t have a position for me. I decided to resign and I want to work for another company near their location. I’ve known in the past that they do come after employees with a non-compete and they never offered me anything for the non-compete.

View JOSEPH L.

4.8 (16)

JOSEPH L.

Answered Feb 8, 2022

Generally speaking non-competes are not enforceable in California against employees or independent contractors. The situation may be different depending on all the facts if you were an equity owner or partner in the company. Also, when a business is sold, a reasonable non-compete is enforceable against the former owner(s) since they were paid as part of the purchase price for non-competition representations. California has long had a public policy against non-compete clauses against employees and independent contractors since it affects their ability to earn a living. I am not sure what information you have about them "coming after other employees". Note: I don't have all the facts, and this answer is for informational and research purposes only.

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Business Contracts

Employee Retention Agreement

California

Asked on Jun 16, 2022

Phantom Unit Agreement

I just received this agreement from my company but I am not understanding anything about it. I need some help understanding this agreement before I sign it.

Holly T.

Answered Jun 17, 2022

Does it perhaps refer to UARs as part of a benefits/retention package in lieu of stocks?

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Business Contracts

Options Contract

California

Asked on Oct 10, 2022

Can I negotiate my stock option agreement?

I am being offered stock options by a potential employer. What can I negotiate?

View Michael M.

4.9 (333)

Michael M.

Answered Oct 11, 2022

In general a stock option agreement is a mutually agreed upon contract. However, these documents must conform to to the terms of the Stock Option Plan. Typically, the only true negotiable item is the quantity of options one is receiving but each situation is fact specific.

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Can a collaboration agreement be terminated if one party fails to meet their obligations?

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