Is a non-disclosure agreement binding if one one side has signed and the business relationship is never entered into?: I recently signed and faxed a non-disclosure agreement in order to become an independent sales rep for a company. Before a Sales Rep agreement was signed, they decided we were not a good match at the last moment. I have yet to receive back the NDA with their signature. I did not receive any proprietary information from them - just marketing material. How do I go about cancelling the NDA? In other words, how do I prevent them from signing it, sending it back, and calling it binding?
David’s answer:
In many circumstances -- and this may be one of them -- a contract that you signed can be enforced against you -- even if you don't have a signature from the other side. The bargain in a non-disclosure agreement is: I will provide you information if you agree not to disclose it. It sounds like the Company relied on the NDA that you signed in sending you information, some of which the Company may deem proprietary. You did not describe the information in detail, but if the the "marketing material" included a sales rep manual, the Company probably considers that proprietary.
But so long as you don't use or disclose the information, the NDA should not be a burden to you. You haven't identified your specific concern with being bound by the Agreement. But you'd be well-advised to consult a business attorney before affiliating with a competing outfit. I'd recommend an attorney with experience litigating trade secret, unfair competition and business tort matters.
Business Lawsuit:
Hello Deb,
I have a wholesale business of key chain fobs that have different characters on them. There is another company (my competitor) who is selling Disney key chain fobs. They would not sell it to me because I am their comparator. They are selling to 20 other company who buys millions of dollars worth of key chains per month. (also their competitor, but very bigger) My brother have a retail store and can buy the key chain fobs from one of those 20 companies. He gets about 10% discount when he buys from those companies. I can buy those key fobs from my brother and sell them online on my website and make about .20cent profit.
Now, someone has done this before but did not buy from retail store, they bought directly from one of the 20 wholesale companies. The person who owns the rights to manufacture the Disney key fobs called them and threaten them not to sell his stuff or else he will sue them. I mean, Can they really do that? because they did not steal the key chain fobs. They bought from another company who has them but at little discount price.
It's like going to walmart and buying 10 huffy bikes on sale price and then sell it on your website at a regular walmart price. and then huffy company calls you up and say they will sue me if i sell their product? Can they really sue me for that? or it's just a stupid threat?
Can I do something about that threat if they do threat me?
Thanks,
Dave
David’s answer:
Any threats by the manufacturer would be as credible as a Disney fairy tale. Under the "first sale doctrine," a legitimate purchaser can resell an item without liability for trademark infringement or unfair competition. But that is not the only issue. If you resell these items on a website, you must be careful that you don't infringe Disney's copyright and trademark rights. Depending on how one uses protected material, one could be liable for infringement for using the characters' names and images in a website name or on a web page.
As for the potential threats, unless they actually interferred with your business or contracts with others, the threats alone could not be the basis for suing anyone. But if they sued you without a basis, once you beat that lawsuit, you could sue for malicious prosecution.
Can I pursue this claim without any statue of limitation?: I was a partner of another company headquartered at the time in Pasadena, CA. I was terminated by the partners in 2005. At the time of my termination, I was considering on filing a wrongful termination suit, but decided not to because it would take me away from my next business venture. My former company, however, did owe me at the time $700K which we never settled on. The last correspondence my attorney at the time (who I later fired) received a letter from their attorney saying that I had used personal expenses on the company and that they were adding up what I supposedly did and would get back to me. The assumption was at the time, that whatever they said I spent on company resources, would be deducted from the $700K they owed me. Well, I never heard back from their attorney and I never pursued it, for a host a reasons. The company is still in operation and the word on the street is that they are thinking about selling to another larger firm.
David’s answer: There may still be time, but you'd better hurry. Your lawsuit for breach of a written partnership agreement and/or for an accounting must be filed within four years of the breach or dispute. Get to a business litigator pronto!