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Comment by whatshisface | Hacker News Reader

>Clients had multi-year contracts in some cases.

I'm calling it now: B2B startups will soon have to sign poison pill contracts that specifically detail what happens if they're bought out. This might ruin the "buy them for their people and discard the business" method of hiring - or at least it will if the customers have any sense.

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I'm baffled if this wasn't already the case. Surely the entire point of signing a long-term contract (as opposed to just paying by the 'unit' used) is to protect against exactly this kind of outcome? I know it doesn't always happen, but it seems like most rapid "hire and shutter" moves hit either consumer-facing services or B2B stuff like analytics that isn't production critical.

I had assumed Twitter was going to be paying out a bunch of breach-of-contract penalties, because this is basically what contracts are for. Is there a standard way around this?

I don't know how it works in Silicon valley, but finance companies I have worked for have pretty much always required that source code be turned over if the vendor folds when doing business with small vendors.

Yes I worked for the company doing the .coop registry and ICANN had very strict rules about code escrow we had to follow.

It's amateur hour if your contracts do not already contain such clauses. For anything business critical that's the norm. Change of control clauses are super common and tend to trigger penalties, escrow arrangements, contract voidance and other niceties.

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