BorlandTalk.com Borland discussion newsgroups   Archives   FAQ   Search   Memberlist   Usergroups   Register   Profile   Log in to check your private messages   Log in  Value of a Non-Compete Agreement          BorlandTalk.com Forum Index -> Delphi Non-Technical View previous topic :: View next topic   Author Message Joby Spencer Guest Posted: Wed Jun 22, 2005 3:54 pm    Post subject: Value of a Non-Compete Agreement I am looking for advice on the value of a Non-Compete Agreement. I have written an application for a niche market inwhich I had originally planned to market myself. Now, a company wants to buy exclusive rights to the program. (See post "Company concerned with One-man-band") As part of the exclusive deal, there will be a Non-Compete Agreement whereby for some length of time, and/or fee, I will not go work for the company's competitors to build a similar application. I'm am looking for advice on how one goes about deciding the terms of that non-complete?? How long of an agreement is appropriate?? And for how much?? I am confident at this time that I could go to one of the company's competitors and design a similar program. For discussion sake, say the value of working with the competitor is $100k. Thanks again, Joby Back to top Martin Waldenburg Guest Posted: Wed Jun 22, 2005 4:33 pm    Post subject: Re: Value of a Non-Compete Agreement Joby Spencer wrote: Quote: How long of an agreement is appropriate?? And for how much?? In Germany usualy two years if part of a job, 50% of the salary has to be paid during the non competition time to keep the agreement valid. Martin Back to top Wayne Niddery [TeamB] Guest Posted: Wed Jun 22, 2005 5:53 pm    Post subject: Re: Value of a Non-Compete Agreement Joby Spencer wrote: Quote: I am looking for advice on the value of a Non-Compete Agreement. I have written an application for a niche market inwhich I had originally planned to market myself. Now, a company wants to buy exclusive rights to the program. (See post "Company concerned with One-man-band") As part of the exclusive deal, there will be a Non-Compete Agreement whereby for some length of time, and/or fee, I will not go work for the company's competitors to build a similar application. I'm am looking for advice on how one goes about deciding the terms of that non-complete?? How long of an agreement is appropriate?? And for how much?? I am confident at this time that I could go to one of the company's competitors and design a similar program. For discussion sake, say the value of working with the competitor is $100k. Thanks again, Typically 1 to 2 years is the most anyone can ask, but if they're willing to contractually pay you *each* year then longer is fine - that would amount to paying you royalties (but in that case you should be guaranteed some base amount plus *actual* percentage royalties, otherwise they may be keeping you out of the market way too cheaply). -- Wayne Niddery - Logic Fundamentals, Inc. (www.logicfundamentals.com) RADBooks: http://www.logicfundamentals.com/RADBooks.html Working for yourself is great because you get to work half days, and you can choose any twelve hours you want. Back to top Kyle A. Miller Guest Posted: Wed Jun 22, 2005 9:53 pm    Post subject: Re: Value of a Non-Compete Agreement There is great stuff at this web site. Check out the Legal Guide and Noncompete books. http://search.nolo.com/query.html?qt=software+development&col=b2store&submit.x=0&submit.y=0&submit=search http://tinyurl.com/aa7dc Back to top Jim Slade Guest Posted: Thu Jun 23, 2005 4:26 am    Post subject: Re: Value of a Non-Compete Agreement "Joby Spencer" <joby_spencer (AT) yahoo (DOT) com> wrote in news:42b989b9 @newsgroups.borland.com: Quote: I am looking for advice on the value of a Non-Compete Agreement. I have written an application for a niche market inwhich I had originally planned to market myself. Now, a company wants to buy exclusive rights to the program. (See post "Company concerned with One-man-band") As part of the exclusive deal, there will be a Non-Compete Agreement whereby for some length of time, and/or fee, I will not go work for the company's competitors to build a similar application. I'm am looking for advice on how one goes about deciding the terms of that non-complete?? How long of an agreement is appropriate?? And for how much?? I am confident at this time that I could go to one of the company's competitors and design a similar program. For discussion sake, say the value of working with the competitor is $100k. Thanks again, Joby DISCLAIMER: THIS IS NOT LEGAL ADVICE NO CLIENT RELATIONSHIP IS INTENDED - SEEK COMPETENT LEGAL COUNSEL Non-compete clauses are sui generis in the law. They are effectively the only aspect of contract law where courts will use equity to re-write a provision in a contract rather than throw an entire offending provision out. Non-compete clauses cannot be too broad or courts will cut them back. In some cases statutes cut in. For example, in some states a non-compete clause with an employer becomes invalid if they lay you off. Non-compete clauses are commonly found in two situations: employment and sales of businesses (the case case). The the former case, courts are more likely treat non-compete clauses with suspicion than in the latter. If someone asked me from the other side, I would probably say that 5 years would be a reasonable time ban. I also point out that if you are planning to sell a product to company A and at the same time considering writing a similar product for company B that this might be considered bad faith on your part. Back to top Oliver Townshend Guest Posted: Thu Jun 23, 2005 9:53 am    Post subject: Re: Value of a Non-Compete Agreement Quote: Non-compete clauses are sui generis in the law. They are effectively the only aspect of contract law where courts will use equity to re-write a provision in a contract rather than throw an entire offending provision out. I think you've got this statement back the front. In Australia, the courts will throw out the entire non-compete agreement if their is any offending provision, the best example being a non-compete that is too too broad, i.e. effectively preventing you from doing any work at all. Oliver Townshend Back to top Eduardo A. Salgado Guest Posted: Thu Jun 23, 2005 2:05 pm    Post subject: Re: Value of a Non-Compete Agreement IANAL and this is NOT legal advice. A Non-Compete has to be structured very specifically and never overly broad because most Courts would nullify an agreement that would keep you from earning a living. OTOH, to defend against a lawsuit that alleges violation of such an agreement with a rich company may cost you $50-100K, take a year or so from your life, and you may still loose! So, get yourself a lawyer and a local advisor. The best way for you may be to grant a license to them for a period and agree to a "maintenance" contract for a few more years after that. Perhaps use one of those "code repositories" to protect them, in case you get hit by a bus. And don't worry about being small. Microsoft was three or four cats and look at them now. If your program is that good, it will stand on its own. And they may be seen possible applications to other markets that you have not considered yet. Don't paint yourself into any corners. YMMV. - Eduardo Accept the challenges so that you can feel the exhilaration of victory. -- General George S. Patton Eminent Domain Software "Custom Software Development For Your Domain" Makers of EDSSpell, EDSPrint, EDSZipCodes and XSpell, the IDE Expert. Joby Spencer wrote: Quote: I am looking for advice on the value of a Non-Compete Agreement. Back to top Philo Guest Posted: Thu Jun 23, 2005 9:29 pm    Post subject: Re: Value of a Non-Compete Agreement Non compete is governed by states and therefore what is allowed and enforced from state to state. I think it best to consult a lawyer in your area that knowns about these things Back to top Jim Slade Guest Posted: Thu Jun 23, 2005 9:46 pm    Post subject: Re: Value of a Non-Compete Agreement "Oliver Townshend" <oliveratzipdotcomdotau> wrote in news:42ba86b7 (AT) newsgroups (DOT) borland.com: Quote: Non-compete clauses are sui generis in the law. They are effectively the only aspect of contract law where courts will use equity to re-write a provision in a contract rather than throw an entire offending provision out. I think you've got this statement back the front. In Australia, the courts will throw out the entire non-compete agreement if their is any offending provision, the best example being a non-compete that is too too broad, i.e. effectively preventing you from doing any work at all. STANDARD DISCLAIMER: THIS IS NOT LEGAL ADVISE BUT RATHER GENERAL INFORMATION NOT INTENDED TO CREATE ANY LAWYER/CLIENT RELATIONSHIP. I am giving the predominant U.S. law. Non-compete agreements are the only area of contract law where courts will "blue pencil" changes into provisions found to be contrary to be public policy. I reenforce the point that courts are much less likely to find a non- compete agreement resulting from a sale to be offensive than they are for a non-compete agreement for employment. Back to top Herbert Sitz Guest Posted: Fri Jun 24, 2005 3:19 am    Post subject: Re: Value of a Non-Compete Agreement "Philo" <meansyou (AT) nospam (DOT) net> wrote Quote: Non compete is governed by states and therefore what is allowed and enforced from state to state. I think it best to consult a lawyer in your area that knowns about these things Yes, and I think most non-compete law the posters in this thread have been referencing has been in the context of interpreting non-compete clauses that are included as parts of employment contracts. Most of the considerations for courts giving special scrutiny to non-competes go out the door, I think, if you've never been an employee and are just making a promise not to compete in conjunction with the sale of something like a piece of software. Seems to me like a promise _never_ to compete with that piece of software could be something upheld by the courts, because it's presumably compensated for directly with part of the purchase price. If you'll pay me $10M for my software I'll give you a 100 year noncompete and go retire. I can't see a court overturning that non-compete. This is far different from the situation when a non-compete is tacked on as part of an employment contract. In any case, OP should definitely check with a lawyer on this and other issues regarding the possible sale. (Are you the "MS" Philo from JoS? What are you doing cruising the Delphi newsgroups?) -- Herbert Sitz Back to top Display posts from previous: All Posts1 Day7 Days2 Weeks1 Month3 Months6 Months1 Year Oldest FirstNewest First         BorlandTalk.com Forum Index -> Delphi Non-Technical All times are GMT Page 1 of 1   Jump to: Select a forum C++ Builder Newsgroups----------------C++ BuilderC++ Builder (ActiveX)C++ Builder (Announcements)C++ Builder (Command Line Tools)C++ Builder DatabasesC++ Builder Databases (ADO)C++ Builder Databases (Desktop)C++ Builder Databases (InterBase Express)C++ Builder Databases (Multi-Tier)C++ Builder Databases (SQL Servers)C++ Builder (Graphics)C++ Builder (IDE)C++ Builder (Internet)C++ Builder (Internet Socket)C++ Builder (Internet Web)C++ Builder (Jobs)C++ Builder (Language)C++ Builder (Language C++)C++ Builder (Compatibility with MFC)C++ Builder (Native API)C++ Builder (Non-Technical)C++ Builder (Students)C++ Builder (Third Party Tools)C++ Builder (Upgrade)C++ Builder (VCL)C++ Builder (VCL Components Usage)C++ Builder (VCL Components Development)C++ Builder (VCL Usage)C++ Builder (WinAPI)C++ Builder Installation Delphi Newsgroups----------------Delphi (General)Delphi ActiveX Controls UsageDelphi ActiveX Controls DevelopmentDelphi As400Delphi DatabasesDelphi Databases (ADO)Delphi Databases (dbExpress)Delphi Databases (Desktop)Delphi Databases (InterBase Express)Delphi Databases (Multi-Tier)Delphi Databases (SQL Servers)Delphi DeploymentDelphi GraphicsDelphi IDEDelphi InternationalizationDelphi InternetDelphi Internet Isapi-WebBrokerDelphi Internet WebSnapDelphi Internet WinsockDelphi JobsDelphi Language BASMDelphi Language ObjectPascalDelphi Model Driven Architecture (General)Delphi Model Driven Architecture (Third Party)Delphi MultimediaDelphi Native APIDelphi Non-TechnicalDelphi ObjectPascalDelphi OLE AutomationDelphi OO designDelphi OpenToolsAPIDelphi Reporting-ChartingDelphi RTLDelphi StudentsDelphi TeamSourceDelphi Thirdparty ToolsDelphi Thirdparty Tools (General)Delphi Thirdparty Tools (IntraWeb)Delphi Thirdparty Tools (RaveReports)Delphi UpgradeDelphi VCLDelphi VCL ComponentsDelphi VCL Components UsingDelphi VCL Components WritingDelphi WebServices SOAPDelphi WinAPIDelphi XMLDelphi Installationcomp.lang.pascal.delphi.components.misccomp.lang.pascal.delphi.components.usagecomp.lang.pascal.delphi.components.writingcomp.lang.pascal.delphi.databasescomp.lang.pascal.delphi.misccomp.sources.delphi JBuilder Newsgroups----------------JBuilderJBuilder AnnouncementsJBuilder Applet IssuesJBuilder As400JBuilder CompilerJBuilder CORBA/RMIJBuilder DatabasesJBuilder DB SwingJBuilder DebuggerJBuilder DeploymentJBuilder DocumentationJBuilder EnterpriseJBuilder HandheldJBuilder IDEJBuilder JavaJBuilder JavaAPIJBuilder Java LanguageJBuilder Java SwingJBuilder Java BeansJBuilder Java Beans UsageJBuilder Java Beans DevelopmentJBuilder JBCLJBuilder JDataStoreJBuilder JobsJBuilder LinuxJBuilder MacintoshJBuilder & MobileSetJBuilder MultiLingual AppsJBuilder Non-TechnicalJBuilder OpenToolsJBuilder Servlets (JSP)JBuilder StudentsJBuilder Team DevelopmentJBuilder Thirdparty ToolsJBuilder UpgradeJBuilder Installation InterBase Newsgroups----------------InterBaseInterBase Bug DiscussionInterBase GeneralInterBase IBConsoleInterBase OpenSourceInterBase ReplicationInterBase SQLInterBase ThirdpartyInterBase Installation Miscellaneous Borland Newsgroups----------------AppCenterAppServerEnteraVisiBroker  You cannot post new topics in this forum You cannot reply to topics in this forum You cannot edit your posts in this forum You cannot delete your posts in this forum You cannot vote in polls in this forum Powered by phpBB © 2001, 2006 phpBB Group SEO toolkit © 2004-2006 webmedic.