Legal Question in Business Law in Washington

Re: Contract Detail

There is no special requirement about what kind of paper is used for the contract. To be valid, it just needs to state the terms and be signed by both parties. You should not be so much concerned with whether a lawyer (or more important; a court) will recognize the contract as valid, and you should be much more concerned with whether the contract unambiguously provides for all the terms you need.

All of the terms you mentioned could reasonably appear in your contract. Whether they do appear in your contract or not is a matter of negotiation between you and the other party. The trap for the non-lawyer in preparing this contract is not that the court will say, "That kind of provision shouldn't be in there," but rather that the court will say, "We see that you have written 'x-y-z' but we agree with the other party that it means 'a-b-c'." Looking just at your first term, you must be sure to define long term and short term. Is "10% of profit" gross profit or net profit? Who pays cost of engineer?

There are also many things that should be in a contract that most people forget to think about. How will disputes be settled? If a court finds part of the contract to be invalid, do we keep the rest of the contract? If the other party terminates the project on 8 hours notice, what recourse do you have? How do you protect your title to the code?

If the other party is willing to write up the contract, I urge you to let them do so, and then have an attorney look it over for you and suggest amendments. If the other party will not write the contract, I urge you to have an attorney write it up for you, once you and the other party have agreed on the terms. It needn't "break the bank" and might save you a lot of money down the road.

Re: Contract Detail

If more people asked your question, there would be far fewer law books filled with cases where parties sue over how to interpret a contract in the wake of a breach, or alleged breach of the contract (to be more specific). Very simply put, if you are serious about entering a partnerhip or any other business arrangement, and at the same time you are starting a new business, here are some people you need to have relationships with:

An accountant, a bookkeeper, a business lawyer, and a financial consultant.

The bookkeeper will help make sure that the accountant and financial planner have the information they need to do their jobs which is to generally minimize your tax liability and maximize your ability to invest in your business and your retirement.

The lawyer is there to minimize your liability by drafting or reviewing contracts that you consider entering into. If you spend $1,000 on a few hours for a lawyer to put you in a solid position, compared with the tens of thousands the contract you discussed will likely bring you, it's a decision that virtually goes without saying.

The same goes for the other folks I've listed. These are all specialty occupations, and while they all cost you something, they free you up to do what you do best.

As for the rest of your questions, they are far too detailed for any lawyer to adequately answer here. The best suggestion that I have for you is to consult with an actual attorney. So long as they are licensed in the state where you will do business and are located, they can help you, although I would begin with locally located attorneys and spread my search outward from there.

Best of luck to you in your new endeavor!