
Should I sign this agreement? - neilni
http://blog.neilni.com/should-i-sign-this-agreement/
======
FleursDuMal
It's generally a bit taboo to directly address dominance in social
interactions, but you were manipulated into doing and then handing over work
for nothing in return.

You were successfully made to believe you would be the bad guy for walking
away when nothing could have been farther from the truth.

You worked, for nothing, on a project which belonged wholly to someone else,
and they didn't even bother to turn up for project meetings.

There's often a big disconnect between people's superficial behaviour and
their genuine intent, and you have to learn to read the signals which tell you
the difference.

This episode might have been unpleasant but could be a cheap lesson if you
learn the right things from it.

~~~
arethuza
"could be a cheap lesson"

Not to mention the fact they wrote it up and it is now popular on HN means
that other people might learn from this and avoid getting into the same mess.

[I once did a pile of work on a proposal for a large project for a customer
who turned out to be using it as part of his MBA... I probably would have
noticed something was funny but he was introduced to us by Sun!]

~~~
ehurrell
HN has showed me that this sort of thing is more common than I expected. Any
and all experiences shared help people know what to look for.

------
startupfounder
It's not a standard NDA, it's a "CONSULTANT, NON-DISCLOSURE, AND INVENTION
ASSIGNMENT AGREEMENT", very different!

This is a standard NDA from HBS:
[http://www.hbs.edu/entrepreneurship/pdf/Sample_NDA.pdf](http://www.hbs.edu/entrepreneurship/pdf/Sample_NDA.pdf)

Always trust yourself, your gut and your instincts in business. Never do
anything in life you get a bad feeling about, including signing a CNDIAA.

"I made an iOS ecommerce app, along with backend server and a simple web-app
POS system. My co-creator asked me to sign a standard NDA agreement except it
specifies that I am an unpaid intern. My instinct tells me not to sign it."

Trust your instinct and good job writing a blog post about it asking for help.

------
cik
You definitely weren't the 'bad guy' in this relationship. If anything, it
looks like you were being taken advantage of. People deserve to be compensated
(somehow) for their work - and it's somewhat clear to me that this wasn't
going to be the case in your situation.

On the other hand - if you did want to be a consultant, there are different
things at play. First, the NDA. NDAs cover _only_ the disclosure aspects,
nothing else. Next there's an MSA - Master Services Agreement. The MSA covers
the method by which services are to be delivered, and the contractual
obligations around them. It's important to separate the two, as typically an
NDA's lifespan is significantly longer than an MSA (i.e. after you're doing
with a client, the NDA continues to live for 6-12 months).

There's absolutely nothing wrong with discontinuing a partnership that isn't
working. It's a hard thing to do, you feel like you're letting people down,
but you're not. The reality of the situation is that a partnership is just
that - a partnership. If it's not good for both sides, then it's not a
partnership, plain and simple.

tl;dr - Get compensated for your work, and put yourself first - no one else
will.

------
sosuke
I want to know why walking away from such a toxic deal made this developer
feel like that would make them the bad guy in the partnership. It seems like
the other party wanted everything and was giving nothing in return. I was
disappointed to read the developer gave the code away in the end.

~~~
xarien
Things are complicated when you're dealing with actual people as opposed to
hearing about it second hand.

~~~
sosuke
You're right we are hearing one side of a story, but we can only go on the
information we have. The co-creator wanted all of the product, and wanted to
give nothing in return, and never really wanted to be a partner in the project
but use the developer for unpaid work since it would be a learning experience.

Anecdotally I've turned down many projects in the past of a similar nature.
"Do this X or Y for me for free I'll tell everyone what a great job you did
and it will bring you more work!" "The experience and education you get from
working on this is payment enough."

I've dealt with actual people in these situations, and this developer isn't
the bad guy. There are no bad guys or good guys in business. This is one
business partner taking advantage of the other. The developer should have
never signed anything, used the project for their class, and not hand over any
right to the code since no exchange of value for it was made.

@xarien, I couldn't reply again to you, but I wanted to say you're absolutely
right about guilt being very complex, and to thank you for clarifying your
thoughts. Guilt and me go way back as I'm sure it does with most folks. (^_^)b

~~~
xarien
I don't disagree one bit, only pointing out that feelings such as guilt are
extremely complicated. I remember the first time I had to let someone go (was
a friend too). It was the hardest damn thing to do and I let it drag on for
months...

------
MCRed
Assuming your description is accurate, you should have had %95-%98 of the
equity of that startup, and all ownership of the code. She was defrauding you
(says she's taking class, so you enroll, turns out it was a lie, says she'll
meet with you, doesn't show up, claims she should get %100 despite doing less
than %5 of the work, etc.) and gas lighting you attempting to emotionally
manipulate you into thinking you were the bad guy.

My response would have been to give her none of the code, she didn't deserve
any.

But I really expect that she'll get nowhere with this app anyway... she can't
get traction with just an initial release, it will need constant work.

Her actions are very typical of the "clueless business type" that has no
respect for the effort of software development (just pointing out functions
not yet done is a prime indicator- they can't be bothered to dig into the
project and think there's some value in pointing out the obvious?)

Which means she will be a failure with this startup.

You would have been better off, I think, taking your software and shopping it
around to other MBAs in this class and seeing if you can find someone who will
give you a real offer.

You could work on the app on the side, and you don't have to give up your
permanent job, but even if you didn't work on the app, you should have still
owned a chunk in the company that developed it further (assuming it was worth
developing further.)

But owning a chunk in a company run by someone who is clueless and trying to
defraud you is not worth anything.

~~~
arethuza
Actually, according to the rather useful sociopath/clueless/loser
categorization it's the OP who is "clueless":

[http://www.ribbonfarm.com/2009/10/07/the-gervais-
principle-o...](http://www.ribbonfarm.com/2009/10/07/the-gervais-principle-or-
the-office-according-to-the-office/)

------
Avalaxy
> I drafted up an agreement for both of us to sign,... and gave her the code
> for free.

You did WHAT?!

~~~
geographomics
I was similarly appalled by this - but reflecting on it further, it was
probably the easiest way out. Sounds like at that point, he just wanted rid of
the whole project.

~~~
drostie
That doesn't sound right to me. "I just want to get rid of the whole project"
sounds like a position of great strength in a negotiation. You might as well
say "I'm not signing anything unless I get X" and as long as X is less costly
than hiring someone to duplicate your effort, you've got a deal.

My approach would look like "I know that I have a relatively stable job lined
up and am facing less risk than you, which is why I'm willing to step down
from 50/50 to 30/70 while signing this NDA, or 20/80 to sign a lesser
agreement, like a non-compete which still allows me to reuse my code. I'm not
accepting a 0/100 split because I don't have to; make me an offer which isn't
insulting. Or pay me for the hours I put in. Either way." If that burns a
bridge then I'm not sure that I would have wanted to save that business
relationship. I'd think "Surely an MBA can understand that a dedicated
employee who takes it upon himself to be more prepared than his boss at every
meeting and who actually delivers the prototype should be compensated
somehow."

~~~
hga
It sounds to me like the costs of continuing to deal with this person, along
with the almost certain failure of the venture, makes "I just want to get rid
of the whole project" equal "I never want to have any dealings with the person
again".

Better to have a clean and total separation and get on with his life vs.
striving to have some fraction of nothing at a continuing time and energy cost
(well, till the person gives up on the venture).

ADDED: As oddevan puts it elsewhere in this discussion, he was " _paid in
sanity_ ".

------
rvschuilenburg
> My co-creator, an EMBA student, and I are taking the course as a way to
> iterate through our product and process. She is in charge of the business
> model, and I am doing the coding. Our professors urged everyone to start
> talking about equity splitting as soon as possible; and my co-creator had a
> really simple answer to that: "I should have 100%," she said.

That sounds like a bad deal already. Good thing he didn't sign the agreement.
But i wonder what the agreement he drafted up contained.

~~~
spindritf
Read the very next sentence. He accepted a full time position somewhere else.

 _She knew that I had accepted a full-time offer prior to starting the class_

If he's not joining the company to run the project, he shouldn't have any
ownership. How would that work?

 _What if one of the founders doesn 't work full time on the company? Then
they're not a founder. In my book nobody who is not working full time counts
as a founder. Anyone who holds on to their day job gets a salary or IOUs, but
not equity._[1]

Trying to making him an unpaid intern is a dick move. Although apparently the
immigration status gets in the way of compensating him fairly?

[1]
[https://gist.github.com/isaacsanders/1653078](https://gist.github.com/isaacsanders/1653078)

~~~
eropple
_> If he's not joining the company to run the project, he shouldn't have any
ownership. How would that work?_

He wrote the damn thing. It is literally _only right_ to compensate him for
his work. And when you know going in that you can't compensate in cash, you're
compensating in points.

------
xarien
That's why you have the tongue in cheek pre-money valuation (seed) equation
from Guy Kawasaki: Add 500k for every engineer on the team and subtract 250k
for every MBA.

------
throwaway12834
As someone who knows both parties involved, here's a little context from the
other side.

While the MBA student was not in the class, she was drafting and writing all
of the classwork (with the exception of the project) for this class that she
was not enrolled in. Our school uses a bidding system that played a factor in
her ability to enroll. Strings had to be pulled to manage to get the developer
into the class (a bureaucratic headache because of cross-registration).

From her perspective, she had an implicit agreement that helping the developer
get into the course and then completing the vast majority of the coursework
was her end of the bargain. This should've been made more explicit between
them, but the point is that the work done was not one-sided.

------
tedmcory
What did he get out of it? If he got nothing, then the contract is typically
invalid. You can't give something of value without getting something in return
(the consideration)(I'm not a lawyer)

------
kohanz
If it's any consolation, the odds that your "co-creator", if the business
practices she has displayed thus far are any indication, makes something
noteworthy or profitable out of your project, seem very low.

------
codewritinfool
I have first-hand experience with a situation like this and can tell you this:

Keep the code. Walk away. Learn from it. Don't look back.

------
88e282102ae2e5b
God this is frustrating to read. Basically you chose to make yourself a slave
to this woman for NO reason.

------
jcadam
The MBA student sounds like she's a complete and total sociopath who is very
skilled at manipulating, using, and discarding people. I've worked for someone
like this before, and it probably took years off my life. I'm older and wiser
now, hopefully :)

If she wants to be successful, she should get herself hired at a large
corporation. Perfect environment for someone like her.

------
socrates1998
I just don't get how "business" types who can't code or design get the idea
that deserve 100% of a project when they don't want to pay the developer.

It just blows my mind. If you can't pay me, then I deserve at least 50% of the
equity.

She was doing the "business" end of a project that had no customers and no
"deals". So, what exactly did she do here?

~~~
shapov
You know, "business" it's the stuff a little coder like yourself can never
grasp, or even begin to comprehend, so let me take care of business, and you
keep coding, ok?

------
gamblor956
From a purely legal perspective, such an agreement probably would not have
been enforceable.

The coder would be giving up the right to his code, and taking on the burden
of non-disclosure, in exchange for...nothing. Basic contract law (in the U.S.)
requires that both parties receive adequate consideration (essentially,
payment) for the bargain they are making. Unpaid student internships are
generally not considered to be valid consideration because it is illegal to
have interns perform the primary business activities without some sort of
compensation (monetary, or in the form of academic units).

It's surprising that it didn't come up in the previous HN discussion but it
appears that none of HN's usual legal commentators dropped in.

~~~
jahewson
You're quite right, the contact contains no consideration on the part of the
company. It's basically a contract of slavery.

It also fails to assign his existing work to the company (as contact terms
cannot apply retroactively), which is a major blunder, as prior to signing
this contact he could not be said to be an employee (if indeed he is).

The patent warranty is particularly ominous, anyone who signs that would be
taking on enormous risk for the rest of the business's life.

------
crusso
The part that bothered me most about the situation (and I realize that it's
only your side being told here) is that she gave lots of warning signs that
she was not holding up her side of any form of partnership. If she couldn't
show up to the meetings, give you feedback on the tasks that you were
tracking, prepare for your discussions of the app, etc... you should have run
away from her right there.

Never stay involved with partners who aren't adding their share of value in an
undertaking. Since she wasn't paying you or even offering equity, the least
she could have done is to participate in the work that you were doing _for her
benefit_.

Don't tolerate being systematically disrespected.

------
jayvanguard
>... this was a particularly uncomfortable and inappropriate conversation to
cover through emails and text messages.

I think this is a key lesson. If you're getting into a business relationship
you need to be able to dispassionately discuss arrangements and contracts. It
is far better to do that via email than verbally.

------
JonnieCache
The _bad guy?_ At that point you could have given her an hour to turn up with
a briefcase full of cash or it's rm -rf time, and you still would have been
the good guy IMO.

Note: this is not legal advice.

------
kdforf
The key to success is to not give a shit about others and only care for
yourself. Walking away as the bad guy but gaining profit from it is much
better than being the good guy.

------
fsk
Rule of thumb: If you aren't sure if the other person is being a jerk or not,
they're being a jerk.

------
misiti3780
why did you give her the code for free? you should have charged her for it

~~~
segmondy
He/She is a much "better" person than me. I would not have given the code for
free, I would not even have given the code at all. I've developed tough skin
over the years. Lots of us who code do so because we really love to, outsiders
look at us as business stupid and easy to push around, and more often than
should be the case, we get taken advantage of.

------
pjc50
The "it would be illegal to pay you" is easily circumvented: start a company
of your own (slightly more expensive than a domain name, but not much), have
her pay the company, _do not pay yourself from the company_ until you have
completed your course.

------
damoncali
The big lesson here is to sort this out before you start coding.

I have an MBA and I write code. In my experience, coders overvalue their
contributions and business guys overvalue theirs. But in the end, the business
guys usually win. You have to think like a business guy.

When I do contract code, I'm under no illusion that I am a critical piece of
the business. In fact, the only thing that has any sort of ability to lock me
in is typically that switching costs are high- developers hard to find and
it's expensive to get a new one up to speed.

That's just the way things are. If you're not an integral part of the
business, you are replaceable.

~~~
MCRed
Engineers can learn business. There's very little that is difficult in
business. Have yet to meet a business guy who could learn software
development.

~~~
damoncali
That's an unfortunate attitude that I would encourage you to drop. Any
reasonably sharp, motivated person can learn anything.

Am I a business guy who learned to code? An engineer who learned business? I
have degrees in both and have taken jobs in both fields. Or am I just someone
who took an interest in these things and learned as much as I could about both
of them?

~~~
huherto
Anyone could. But it takes a long time. Most people won't do it.

