Did Zuckerberg Sign Away 84% of Facebook?
Wunderkind Mark Zuckerberg (who dreamed up Facebook in hiscollege dorm room) is facing a lawsuit by Paul Ceglia, a man who claims that hehas a contractual right to an 84% stake in the company. The Wall Street Journal reported:
In his suit, Mr. Ceglia claims hesigned a contract with Mr. Zuckerberg on April 28, 2003, to develop and designa website, paying a $1,000 fee but getting a 50% stake in the product. Thecontract stipulated that Mr. Ceglia would get an additional 1% interest in thebusiness for every day after Jan. 1, 2004, until it was completed.
In a statement, a spokesman forclosely held Facebook said, “We believe this suit is completely frivolousand we will fight it vigorously.”
Mr. Ceglia didn’t return callsseeking comment. His lawyer, Paul A. Argentieri, also didn’t return a call forcomment.
It’s unclear how Mr. Ceglia mighthave become involved with Mr. Zuckerberg.
A copy of the contract seen by TheWall Street Journal says it is “for the purchase and design of a suitablewebsite for the project Seller [Mr. Zuckerberg] has already initiated that isdesigned to offer the students of Harvard university [sic] access to a wesite[sic] similar to a live functioning yearbook with the working title of ‘TheFace Book.'”
There is a factual question whether Zuckerberg ever signedthe purported contract. Copies of the document appear to bear his signature. Is it a forgery? In court, Zuckerberg’s attorney stated that she was “unsure”whether Zuckerberg signed the contract. In an interview with CBS’ Diane Sawyer, Zuckerberg said that he neversigned the contract:
Assuming, however, that the document did not say anythingabout how/when it became binding as a contract, the objective theory ofcontract formation certainly makes it is possible for Zuckerberg to manifest assent withoutactually signing the document.
That said, the whole discussion could become academic because,as Prof. Victor Goldberg (Columbia) told the WSJ, Ceglia might have a problemwith the 6-year statute of limitations for breach of contract.
UPDATE: Here’s the complaint, which contains a copy of the “work for hire” contract.
[Meredith R. Miller]