Full question:
My business partner (relative) gifted a friend 7% of our fledgling business about 1 year ago just because she was a friend who was supportive of her. Our company is a LLC. We have made no money in the 2 years of operation. Now my partner/relative realizes she needs that percentage to maintain her majority control of the business as well as being able to obtain financial investors. My partner has told her friend she has rescinded the gift. Note her friend never received any benefit from the gift because the business has made none. However, her friend refuses to accept my partner has rescinded the gift. She threatens to take both of us to court which is ridiculous since the business has made nothing. Does my partner have the legal right to rescind this percentage gift or will it be necessary to go to court to have this done? Again, please keep in mind this is only a start up business and there is only debt and inventory that has gone nowhere.
- Category: Donations
- Subcategory: Gifts
- Date:
- State: New Jersey
Answer:
I cannot provide a legal opinion, but I can offer general information. To determine if a valid gift was made, three elements must be considered: delivery, donative intent, and acceptance by the recipient.
1. **Delivery**: A gift is delivered when the donor relinquishes control over it. This can be actual, implied, or symbolic. For example, handing over keys for a car symbolizes delivery.
2. **Donative intent**: This refers to the donor's intention to make a gift, which can be inferred from their words and actions. Courts also consider the relationship between the parties and the circumstances surrounding the gift.
3. **Acceptance**: The recipient must unconditionally agree to accept the gift at the time of delivery. A gift can be revoked before acceptance.
If your partner's friend did not accept the gift, your partner may have the right to rescind it. However, if the friend claims she accepted it, the situation may require legal resolution. Courts may also intervene if evidence shows the donor was coerced or misled.
It’s advisable to consult a local attorney who can evaluate the specific facts and documents related to your situation.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.