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I don't know much about the law so terms may not be correct.

I am in a contract with a party (partyA) that is closing part of the business as it is losing money. The nature of the contract is I just get a small portion of income from the services they deliver using software I provide. That portion (%) is in the contract. PartyA needs to transition the service to existing customers as they would risk getting sued. They are turning contracts over to a general hosting provider.

So I am thinking OK we just end the contract. I have been informed that partyA plans to exercise an "18 month divestiture" clause and I am still bound to the to support even though I will get zero income. There is really nothing more than "18 month divestiture". The hosting company is not picking up my contract. I have been told data (data does not belong to me) and my software will be handed over to the new hosting company and they may chose to enforce support via this divestiture clause. The new hosting company will take over the contracts with existing customers. This is not a court forced divestiture or bankruptcy. This is voluntary closing of part of the business.

The company (LLC) is staying in business. I am having a real problem claiming divestiture and leaving the company in business. There is nothing in the contract that identifies hosting as a separate business. That component is (was) actually the main component of the company. The company in still enforcing other terms in the contract - for example I cannot sell to another local competing company.

Can I be forced to support software I am not getting paid for?

Can partyA even give my software to this new hosting company? My contract is with partyA for in house use of my software. They don't even have a license to distribute my software.

I did this under a guest account as partyA is aware of my regular account

  • Could you clarify whether there is an "18 month divestiture clause" in your contract and if so what it says? – Dan Sep 1 '16 at 21:25
  • That is literally what is says. – divestiture Sep 2 '16 at 2:26
  • Did you write the software for them? What was the nature of the contract? – Zizouz212 Sep 2 '16 at 5:10
  • @Paparazzi You're giving us very vague answers. What was the nature of the contract? Was it work for hire? Did you retain IP? Did you license it to them? – Zizouz212 Sep 2 '16 at 14:07
  • @Zizouz212 The nature of the contract is I just get (got) a small portion of income from the services they deliver using software I provide. No it was not a work for hire. – divestiture Sep 2 '16 at 22:12
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This question is very difficult to answer as it depends on lots of facts not provided - primarily on what the contract says (but also possibly on where you are and if you were an employee)

If PartyA does not own the software (ie they only have a license for it), unless there is an agreement they can transfer the license, they can't simply transfer it - and if they can transfer it, presumably the people who acquire a copy of it have to pay you the same percentage for your work.

Depending on the terms of your agreement, you may have to support the software without payment (assuming you have been paid anything for it)

If your agreement was written by someone competent, presumably you should be covered and speaking to them. If not, maybe there is nothing in your contract to provide support by way of "this request is not supported / this data is to corrupt to fix / latest security patch only allows software to run 5 minutes a month - here is a binary dump of your data, good day", and/or, yes, I'm supporting it - all support requests and work needs to be done between 4:30am and 5:00am on a Saturday evening.

  • USA TX and not an employee and never an employee. Never even paid for contract hourly. Only paid a fixed % of service income derived from using the software. It is a usage incense only and not transferrable. Not have ownership is specifically called out. The nature of the app is they expect near real time fix to any critical bug. But what is "support" is not defined. When I signed the contact I thought it was shot in the dark and in the peak it was $40K/month and full time effort. – divestiture Sep 3 '16 at 3:03

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