Partner Stole Business Ideas

[MyCar]

A long time friend and I started a business selling a web-based application. We never incorporated, and don't have a full fledged business. I built the application and hold all of the code and passwords for all but one of our four customer websites.

He took a spin-off idea that we came up with, found another programmer and started a company (incorporated and all) to sell this spin-off. He has offered to buy-out my part of our application based on projected sales of this product through his new company.

My questions are many.

1. Do I have any recourse for the stolen idea?
2. Do I have any recourse for the verbal contract that he and I shared that WE would build this new application and sell it?
3. I have countered his offer with a one time buyout at 10% of his offer, He can't afford it and says his offer is non-negotiable.
Can I legally hold on to what I have (source code, domain name, hosting) and tell him to jump off a cliff?
4. Do I need to be worried about him sueing me for what I have?

We hav no written contracts binding either of us. Only a product he sold an I built, and the verbal agreement that we were in business together and would sell any products that were a spinoff of the original together?

[Mr. Knowitall]

1. Do I have any recourse for the stolen idea?

It depends upon the contractual relationship you had, and whether you can prove the terms of the contract.

2. Do I have any recourse for the verbal contract that he and I shared that WE would build this new application and sell it?

Can you prove that there was a contract, and that it was breached? Would he admit it?

3. I have countered his offer with a one time buyout at 10% of his offer, He can't afford it and says his offer is non-negotiable.

You offered to settle for a tenth of what he offered and he refused? That doesn't make sense. In any event, if he won't negotiate you have to choose between taking his offer or exploring other options (e.g., suing).

Can I legally hold on to what I have (source code, domain name, hosting) and tell him to jump off a cliff?
4. Do I need to be worried about him sueing me for what I have?

That depends upon the terms of your contract, and also whether he could claim a contract without ending up having to admit that he owes you a whole lot more than he is claiming from you.

You should talk to a lawyer in your state who handles business torts.