contract-law
Are the roles specified in a Founders Agreement (contract) legally binding?
<p>I am in the process of producing a Founders Agreement for myself and my team working on a startup.
I've read in many places that specifying the roles of each founder (CEO, CTO, etc.) is highly recommended, and it's in fact mandatory in a template I'm using.</p>
<p>My question is this: does the specification of these roles have any legal implications?
Does having the role of the CEO assigned to you in the contract, for example, give you certain legally binding responsibilities/limitations, or are these roles just symbolic?</p>
<p>Thanks!</p>

<blockquote>
<p>Are the roles specified in a Founders Agreement (contract) legally binding?</p>
</blockquote>
<p>Yes, like pretty much everything that is provided in a contract. Information about roles is useful for ascertaining the rights and duties to which parties/partners <em>knowingly and willfully</em> agreed.</p>
<blockquote>
<p>Does having the role of the CEO assigned to you in the contract, for example, give you certain legally binding responsibilities/limitations, or are these roles just symbolic?</p>
</blockquote>
<p>It is too risky to assume that something in a contract is symbolic. An assumption of that sort is indicative that one might not fully understand what the contract entails (and consequently the vulnerabilities inherent thereto).</p>
<p>Although some labels and acronyms of roles are self-explanatory as to hierarchy and scope, it is in the parties' best interest to ensure that the contract is detailed enough to preempt conflicting interpretations (ambiguities). For instance, the Technology and Information departments are likely to overlap (the extent to which that happens depends on the type of entity being founded), whence it makes sense to include sufficient information in the contract so that a reasonable person can ascertain from the Founders Agreement what issues correspond to a CTO and which ones to a CIO.</p>
<blockquote>
<p>it's in fact mandatory in a template I'm using.</p>
</blockquote>
<p>Besides unlikely, it is unclear whether statutory law in your jurisdiction requires you to use <em>that</em> template. Templates are inevitably generic and might be inadequate for reflecting the parties' intent. Trying to fit a template is likely to distract the parties from the intent they would otherwise memorialize with the clarity and specificity they need.</p>

<p>&quot;Does having the role of the CEO assigned to you in the contract, for example, give you certain legally binding responsibilities/limitations, or are these roles just symbolic?&quot;</p>
<p>This looks to be a false dichotomy. The roles are definitely not symbolic. But there's no enumerated list of exact responsibilities. For instance, your agreement may define a Chief Legal Officer role, which is unusual. That would imply the CEO is not primary responsible for those matters. This shows that specific circumstances matter.</p>
<p>Next up, it's important to note that these agreements matter most, when there's a conflict. At that point, it might be necessary to look at what the agreement says, but that interpretation will be done in the light of the conflict that needs to be resolved. The question is less likely to be &quot;what roles did the CEO have?&quot;, but more &quot;who's responsible for the purchasing role?&quot;.</p>
