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OT Lawyer Advice:Business Contract
Posted on 11/17/17 at 11:37 am
Posted on 11/17/17 at 11:37 am
****Update below OP****
I own a small tech consulting company (LLC) and have had a contract in place for the previous 5 years to provide technology services for another company.
I am paid on a % of business basis - for every deal they close I am paid a set %. Agreement has worked out well for both parties - no complaints of quality of service or other disputes.
My customer has been acquired by a larger company and I’ve been given the heads up that my contract will probably not be renewed but there is possibility for a new agreement on different terms, which I’m open to based on the terms.
Question is this - since my agreement entitled me to % of each deal and this larger company acquired my contract, am I entitled to the same % of their deals as well?
My agreement has remained in place to date and they have continued to utilize my technical and business domain knowledge since the acquisition. If it matters, the original business agreement is between two TX businesses (LLC and S-Corp) and the new company is based in TN.
Thoughts?
****Update*****
Consulted with an atty - and he said it is likely that the acquired company was acquired as a subsidiary of the parent and thus I would be out of luck. If I want to pursue further, he can research the filing in TN to see how it was done, but he said 99% of the time, this is how it's done.
I own a small tech consulting company (LLC) and have had a contract in place for the previous 5 years to provide technology services for another company.
I am paid on a % of business basis - for every deal they close I am paid a set %. Agreement has worked out well for both parties - no complaints of quality of service or other disputes.
My customer has been acquired by a larger company and I’ve been given the heads up that my contract will probably not be renewed but there is possibility for a new agreement on different terms, which I’m open to based on the terms.
Question is this - since my agreement entitled me to % of each deal and this larger company acquired my contract, am I entitled to the same % of their deals as well?
My agreement has remained in place to date and they have continued to utilize my technical and business domain knowledge since the acquisition. If it matters, the original business agreement is between two TX businesses (LLC and S-Corp) and the new company is based in TN.
Thoughts?
****Update*****
Consulted with an atty - and he said it is likely that the acquired company was acquired as a subsidiary of the parent and thus I would be out of luck. If I want to pursue further, he can research the filing in TN to see how it was done, but he said 99% of the time, this is how it's done.
This post was edited on 11/20/17 at 12:40 pm
13
Posted on 11/17/17 at 11:38 am to RonLaFlamme
Posted on 11/17/17 at 11:39 am to RonLaFlamme
Full disclosure - it is inappropriate for me to offer you specific legal advice under these facts, because I don't and am not going to represent you.
However, that prohibition doesn't block me from telling you this - you need competent legal counsel to advise you on these contract details - and you need it ASAFP.
Good luck.
However, that prohibition doesn't block me from telling you this - you need competent legal counsel to advise you on these contract details - and you need it ASAFP.
Good luck.
Posted on 11/17/17 at 11:39 am to RonLaFlamme
quote:If they assumed the full company and not just the assets, then new company should honor the terms of your original contract until it expires.
Question is this - since my agreement entitled me to % of each deal and this larger company acquired my contract, am I entitled to the same % of their deals as well?
Posted on 11/17/17 at 11:39 am to Bunta
Ironic isn’t it?
Posted on 11/17/17 at 11:39 am to RonLaFlamme
they will most likely dissolve the staffing company and just absorb it into their own company.
Plus, your contract was between you and the staffing company not the company that is buying it out.
Plus, your contract was between you and the staffing company not the company that is buying it out.
Posted on 11/17/17 at 11:39 am to RonLaFlamme
It sounds like you need a real lawyer.
Posted on 11/17/17 at 11:40 am to RonLaFlamme
quote:
Thoughts?
I'd have to read the contract. What does the termination provision say? Often in acquisitions, the acquirer can choose which contracts of the acquired company they wish to assume.
And I echo other posters in that you need to pay for legal advice. This is important.
This post was edited on 11/17/17 at 11:41 am
Posted on 11/17/17 at 11:43 am to Mo Jeaux
No specific provision for sale of business. General provision for annual renewal with 60 days notice. With cause - no notice required.
I am continuing to be paid under the terms of the agreement but only on business in the acquired company pipeline not on business from the acquiring company.
I am continuing to be paid under the terms of the agreement but only on business in the acquired company pipeline not on business from the acquiring company.
Posted on 11/17/17 at 11:45 am to RonLaFlamme
quote:
Thoughts?
Get off the OT and talk to lawyer in person.
Posted on 11/17/17 at 11:46 am to RonLaFlamme
quote:
General provision for annual renewal with 60 days notice.
Automatic annual renewal unless terminated?
Posted on 11/17/17 at 11:46 am to Mo Jeaux
Yes
Posted on 11/17/17 at 11:47 am to RonLaFlamme
quote:Has the scope/volume of your work increased, or are you doing additional work now to include the acquiring company's needs as well?
I am continuing to be paid under the terms of the agreement but only on business in the acquired company pipeline not on business from the acquiring company.
Posted on 11/17/17 at 11:48 am to The Mick
Scope has expanded to include staff from the new company - setup access to systems, knowledge transfer, training, etc
Posted on 11/17/17 at 11:49 am to RonLaFlamme
quote:
Scope has expanded to include staff from the new company - setup access to systems, knowledge transfer, training, etc
you need to renegotiate the contract then. They will continue to take advantage of this contract until you push back.
Posted on 11/17/17 at 11:49 am to RonLaFlamme
Get Gordon, Get it done.
Posted on 11/17/17 at 11:51 am to RonLaFlamme
It's dumb to seek legal advice here for something like this (and for most other issues). When it comes to free legal advice, it is worth what you paid for it.
Posted on 11/17/17 at 11:51 am to tke857
I am actually happy with the written terms of the agreement . Any new agreement will likely be less favorable and that is most likely their reason for wanting to terminate and then sign a new agreement. Just trying to have some ammunition if things go south.
Posted on 11/17/17 at 11:53 am to RonLaFlamme
I doubt they'd be liable to pay you extra tbh, but without seeing the contract no one here can say for sure.
I would approach it from a sales standpoint rather than from a legal standpoint (threatening, etc). I would try to solidify your value with the acquiring company with the goal being to get your contract renewed or lock in some other kind of relationship. That would net you a lot more $ than trying to battle a big company via lawsuit.
I would approach it from a sales standpoint rather than from a legal standpoint (threatening, etc). I would try to solidify your value with the acquiring company with the goal being to get your contract renewed or lock in some other kind of relationship. That would net you a lot more $ than trying to battle a big company via lawsuit.
Posted on 11/17/17 at 11:54 am to The Mick
I agree here and that really is my approach. Legal is strictly a final fallback position.
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