I mostly agree. If we're talking about employees, California is a Right-To-Work state, so an employment contract is effectively bupkis. In my experience, this is very beneficial for both companies and employees.

Things get stickier if money has changed hands. In that case, you've probably got grounds for a civil suit at the very least, but beyond that, you take your licks and keep on going, which is what it sounds like the author has done.

Cofounders aren't just employees, though. They're also shareholders, as well as nominally members of the board. That confers a different set of legal responsibilities. I'm not a lawyer, though, so I'm not sure if being a corporate officer puts you in a different position regarding employment contracts than just being an employee.

Overall, I think we would agree that Ted's actions were highly unprofessional.

Once you've signed a contract, you're committed.

If you're going to bail, bail before ink hits paper. If you aren't sure about working with someone, make your reservations clear from the get-go.