Q: How can investors sue for promised returns from an invention in California?
I am one of three investors in a product that was developed by an inventor who promised us 5% of the invention and returns. Despite having a written agreement, we have not received any part of the promised returns or ownership. The product is now selling on the market. How can we take legal action against the inventor to claim the money and 5% ownership that were promised to us?
A: This should be a fairly straightforward breach of contract claim. Without seeing your contract and having more information it is difficult to determine what other claims you may have, but that is a start. In the law, words and agreements mean things, so please seek out a business lawyer to assist you.
Jason M. Horst agrees with this answer
Lawyers, want to be a Justia Connect Pro too? Learn more ›
- California
- (916) 704-3009
- View Profile
- Answered
A:
You have a strong case to pursue legal action based on breach of contract since you have a written agreement outlining the promised 5% ownership and returns. First, gather all documentation including the written agreement, any communication with the inventor, proof of your investment, and evidence that the product is now on the market generating revenue.
You can file a lawsuit in California Superior Court seeking specific performance (to enforce the 5% ownership stake) and monetary damages for unpaid returns. Before filing, consider sending a formal demand letter through a business attorney, which might resolve the issue without litigation. The statute of limitations for written contracts in California is four years, so ensure you file within this timeframe.
Your case may qualify for either limited jurisdiction (claims under $35,000) or unlimited jurisdiction depending on the value involved. You might also consider mediation or arbitration as potentially faster alternatives to court. Given the complexity of intellectual property and contract law, working with an attorney who handles business disputes would give you the best chance of successfully enforcing your rights and recovering what you're owed.
Justia Ask A Lawyer is a forum for consumers to get free answers to basic legal questions. Any information sent through Justia Ask A Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between Justia and you, or between any attorney who receives your information or responds to your questions and you, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask A Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises, or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
