Developed initial version of website in belief contract would get signed. They backed out. Is the site mine?

Question

The title is probably my best summary. It is similar to this other unfortunate scenario, but I ask here because of a few differences. So here are the mains:

Two months ago I sent an email to a guy on upwork who was looking to hire out a programming job I was uniquely qualified for. In my email I linked him to my proof of qualifications.
I received a phone call from him where the first words he said were "Where the fuck have you bean!? I've been looking for you for months." He went on to tell me how he was loosing faith in his project because he'd already interviewed over 30 developers who didn't fit the bill. Then said he got "goose bumps" when reading through my blog posts because I showed that I'd basically already done in a prior project what he was trying to do (albeit for a different application in a different industry). At some point I said "If I were to be the one to do this job for yo.." when he abruptly cut me off to say "No no. There is no if. This job is yours." I was feeling pretty good.
Over the next two months him and I discussed the project with his partner - the sole financier of the project. Communication wise:
- They shared with me: very general block diagrams of how the system would work, examples of websites they wanted to emulate (which were gross), and a CSV of people they wanted to advertise to obtained from public government records. They never provided code of any form to me.
- I shared: outlines of a better system, better 3rd party providers to integrate with, and educated them on machine learning.
- I learned that the financier, who is involved in a hedge fund, is litigious - he would gloat about various ways he'd made money including a story about making $50k by buying pre-foreclosed real estate who's mortgage he knew was improperly recorded so he could sue the city/bank to nullify it.
- These communications spanned about 30 hours.
We negotiated through several revisions of a written contract that ultimately was not signed. The last revision I requested was that I would retain rights to all works until receipt of final payment, at which point I would transfer over all rights.
Both partners told me multiple times that they wanted to hurry up and get this contract signed so that I could get paid/start.
Communication from them slowed last month... I was told that the financier fell ill.
Two weeks ago I told them that I would immediately begin working on the project "full time" in anticipation of finalizing the contract. It was clear they received my message because the financier responded saying he would call me the following day. He didn't call me, but I did develop a working version of the software. It is live on a domain name I own. All the visuals, design elements, and code were created by me. I figured branding could easily be swapped.
I updated the financier that I'd created a first version and was going to have beta testers using it this week. Then he sent me this:

So my questions are:

If this guy sues me, what could he win?
The initial idea for this site was theirs but I am the one to manifest that idea into a usable thing using hard won know-how and assets. Is it completely mine to monetize?

His abrupt change of heart has left me with about 80 hours of non-compensated work as well as server and 3rd party service costs. So about $7k in currently wasted effort. If it is okay for me to sell this, should I first offer it to him? Or should I not speak to them anymore?

did you sign anything? Did you recieve any payment or promise of payment? Which jurisdiction are you in, or are you and the other one in different states? — Trish, Jul 22 '20 at 21:21
I didn't sign anything. I did not receive payment or use any of their paid memberships to 3rd party services. They repeated on several occasions how they wanted to get me paid. I am located in the midwest and they are located in Florida — caseyj, Jul 22 '20 at 21:30
This absolutely still could have happened had we kept the conversation on upwork. — caseyj, Jul 23 '20 at 00:14
Bad employers happen; but through Upwork, you would have a contract with them, and they would have realized that, too. — BlueDogRanch, Jul 23 '20 at 04:05
Suspicious mind here: have you shown them the website you have developed already? Is it possible that they have simply ripped off the work you have done? You might want to keep an eye on them and/or search for any markers in your JS to see if it pops up somewhere else. Also send them a letter stating your position that all the code developed is your own and requiring them to delete any copies they may have. — Paul Johnson, Jul 23 '20 at 06:29
@PaulJohnson good thought but fortunately no - they have not seen what I've made :) — caseyj, Jul 23 '20 at 13:32

score 8 · Accepted Answer · answered Jul 22 '20 at 23:48

8

All your work is yours. They've made it very clear it wasn't a work for hire, so it's yours.

They can't copyright any of their ideas. You can't copyright an idea. Only specific creative elements authored by them and present in your work could be covered by copyright. You didn't use their block diagrams. I don't see how references to other sites to look at would constitute a creative element they authored.

That said, you probably want to talk to a lawyer and get a written legal opinion that you can rely on.

answered Jul 22 '20 at 23:48

David Schwartz

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no? Work for hire is not yours. They could argue this was work for hire. not that they would be guaranteed a win, but enough to force a lawsuit – Trish Jul 23 '20 at 00:11
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Hey David, just wanted to say thank you for your input :) I would upvote (yours and others) but I actually don't have enough rep to do so :/ – caseyj Jul 23 '20 at 00:18
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@Trish - David's point is that the customer maintains that they never hired him to do the work. They take the position that it was all just talk about possibly entering into an agreement to hire him. If they want to now assert that they did hire him they should demonstrate that by paying him. Of course anything can become a law suit. – George White Jul 23 '20 at 00:21
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@Trish They specifically said they didn't hire him to do any work. If they later want to argue that he infringed on their copyright because it was a work for hire, he will argue that they induced that infringement and so can't complain about it. – David Schwartz Jul 23 '20 at 18:02

score 7 · Answer 2 · answered Jul 22 '20 at 22:53

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With competent legal advice you might get them to sign a waiver that they relinquish any claim to your work. There may be an argument that you had a verbal/email contract that your relied on (magic words). The list of names might be the only thing that is theirs.

On the other hand, I learned many years ago that there is no contract wording between you and someone untrustworthy that will prevent all future grief.

answered Jul 22 '20 at 22:53

George White

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there is no contract wording between you and someone untrustworthy that will prevent all future grief. very well said – caseyj Jul 23 '20 at 00:05

Dale M · Answer 3 · 2020-07-28T20:28:35.597

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Experience is cheap at any price

The web site is not theirs but it’s not clearly yours either because of the sketch design by your not client. Take it down from public view, don’t try to sell it and get on with something new.

While legally, you may be within your rights, it seems, given the litigious nature of your “client”, you may have to fight for them in court. Your position is not so clear cut that you would succeed on a motion to dismiss so you’d have to go the whole nine yards. You’ll spend way more than 2 weeks on that, so as a commercial proposition it just isn’t worth it.

edited Jul 28 '20 at 20:28

answered Jul 22 '20 at 21:32

Dale M

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and in the future: NO WORK without a contract. – Trish Jul 22 '20 at 21:34
Woah, that's like a punch in the face.What would it take to clearly demonstrate it is mine? And I take it you're definitely not recommending to try sell it to them/seek repayment of any form? PS thanks for you message! – caseyj Jul 22 '20 at 21:45
Also, what statute of limitations would there be on him making a claim for it? – caseyj Jul 22 '20 at 21:47
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There was no "sketch design" but block diagrams which only express an idea/invention/algorithm neither of which is copyrightable nor already patented (on the face of it). – Greendrake Jul 23 '20 at 02:10

Developed initial version of website in belief contract would get signed. They backed out. Is the site mine?

3 Answers3

Experience is cheap at any price