As a lawyer I have to acknowledge legal agreements are important; however, they are not determinative. Cruise was acquired by GM for $1B, so it goes without say

As a lawyer I have to acknowledge legal agreements are important; however, they are not determinative. Cruise was acquired by GM for $1B, so it goes without saying they had their t's crossed and i's dotted...again it is not necessarily enough. Besides written contacts (express), there are agreements created by the actions of the parties (implied). I don't have the facts beyond the article, but at the point an application is submitted to YC naming someone a co-founder, its going to be difficult to argue there isn't an implied contract in place for anything the company (or even proposed company) does moving forward. Yes legally a company that doesn't even exist can be bound by the representations of its agents. I wouldn't be to surprised to learn Cruise had a very strong case, which might have even included written resignations, stock transfers/assignments, etc... Again I don't know; nevertheless, one could see certainly see the practicality of just paying someone to go away even with a weak case so long as there is a modicum of truth to having started the company. There is nothing worse than a client who litigates out of principle instead of with their wallet. I having been discussing contracts a lot on HN as of late especially in regards to what people dub smart contracts and I can't stress it enough, breach of contract cases usually never end at summary judgment and can usually always go to trial because whether or not there was a breach is a question of fact reserved for judge or jury at trial.