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Possible to be sued for contacting clients?

Discussion in 'BlackHat Lounge' started by tristangemus, Jan 20, 2013.

  1. tristangemus

    tristangemus Regular Member

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    I've been working with a client who outsources his work to me. We have no legal contracts, etc. he just paid me through PayPal to do work for these clients. We've recently stopped doing business and I have a small list of clients who I wish to contact. Can he take any legal action if I contact these clients? I mean, they are free game if you ask me since I did not sign anything about not contacting his clients or revealing them. However, I am no lawyer. Let me know your opinion!

    thanks,
    Tristan.
     
  2. B. Friendly

    B. Friendly BANNED BANNED

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    Answer is no. There is no law, and since you didn't have a contract, you have no reason to not contact them. Happens all the time in business. It's called "cutting out the middleman".
     
  3. writer@<3

    writer@<3 Newbie

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    If you signed an NDA with your previous client, then yes, you can be sued. No NDA, no problem. I recently dealt with a similar issue, but it was a matter of not being paid. Oh - also, if you did sign an NDA, then it is only effective from the date of signing, so say, for example, you worked for the ex client for a month, then signed it, everything you learned from before you signed it is open and you can't get in trouble for - UNLESS it specifically states in the NDA that it includes from the date of hire. It also depends in which country you are doing business. That can change everything. Your best bet is to ask at avvo dot com. Hope this helps :)

    Please keep in mind: I am not a lawyer and this is not legal advice. Although I've been in similar situations and am trying to help, take this advice at your own risk.
     
  4. WHATITDO

    WHATITDO Newbie

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    The law of agency is an area of commercial law dealing with a set of contractual, quasi-contractual and non-contractual relationships that involve a person, called the agent, that is authorized to act on behalf of another (called the principal) to create a legal relationship with a third party.[1] Succinctly, it may be referred to as the relationship between a principal and an agent whereby the principal, expressly or implicitly, authorizes the agent to work under his control and on his behalf. The agent is, thus, required to negotiate on behalf of the principal or bring him and third parties into contractual relationship. This branch of law separates and regulates the relationships between:
    Agents and principals;
    Agents and the third parties with whom they deal on their principals' behalf; and
    Principals and the third parties when the agents purport to deal on their behalf.
    The common law principle in operation is usually represented in the Latin phrase, qui facit per alium, facit per se, i.e. the one who acts through another, acts in his or her own interests and it is a parallel concept to vicarious liability and strict liability in which one person is held liable in criminal law or tort for the acts or omissions of another.
    In India, section 182 of the Contract Act 1872 defines Agent as "a person employed to do any act for another or to represent another in dealings with third persons".[2]




    The duty of loyalty, which is a subset of unfair competition, has been characterized as "a general category of torts recognized by Minnesota courts to protect commercial interests."14 The duties of loyalty and unfair competition do not necessarily have specific elements.15 However, employees still have a "common law duty not to ‘wrongfully use confidential information or trade secrets obtained from an employer.'"16


    The employee's duty of loyalty precludes him from soliciting a former or current employer's customers prior to resignation and from failing to give sufficient notice of an intention to resign.17 However, "[t]here is no precise line between acts by an employee which constitute prohibited ‘solicitation' and acts which constitute permissible ‘preparation.'"18 "Because of the competing interests, the actionable wrong is a matter of degree ... . Whether an employee's actions constituted a breach of her duty of loyalty is a question of fact to be determined based on all the circumstances of the case."19 "What is required is a balancing of the employer's legitimate interest in having its business advanced by an employee, and the employee's legitimate interest in bettering him or herself in a new business and providing for his or her continuing livelihood."20


    It is clear that an employee breaches his fiduciary duty by disclosing confidential information and by competing with his employer. In Eaton Corp. v. Giere,21 an employee left to attempt to sell a transaxle that he was developing to Toro, a Minnesota corporation that makes lawn mowers. The employee was found to have violated both his common law duty of confidentiality and his duty of loyalty by approaching Toro, corresponding with Toro, and meeting with its representatives while he was employed by Eaton.





    I'm not a lawyer and this isn't legal advice.

    The problem I've always faced when poaching clients is the employer/client relationship bond was always stronger than my relationship with the client. If your boss was always in the background, and clients only had dealings with you and in the end rather do business with you than him... That would be called the american dream my friend.

    Again this is not legal advice lol
     
  5. rettaibi

    rettaibi Regular Member

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    Didn't read it but it looks legal tho :p
     
    Last edited: Jan 20, 2013
  6. tristangemus

    tristangemus Regular Member

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    Thanks for all the help everyone. I was pretty sure I was in the clear now I'm positive. Looking forward to my new clients :).
     
  7. WHATITDO

    WHATITDO Newbie

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    lol =D
     
  8. B. Friendly

    B. Friendly BANNED BANNED

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    It was all completely irrelevant. OP was contracted, and was not an "employee". Each job was an "arm's length transaction". OP was no more obligated to his "employer" than the owner of the Quickie Mart owes loyalty to the guy who just bought a 6-pack and some Juicy Fruit gum.

    Beyond that, any laws quoted from the People's Socialist Republic of Minnesota are almost impossible to enforce in Minnesota, much less anywhere else.
     
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  9. smirker

    smirker Junior Member

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    You're in the clear! If you had an NDA, not so much. I've almost been sued because a previous client THOUGHT I violated their NDA and contacted their clients - however it was mere coincidence. (We had similar lead gen tactics)