How Do I Resolve a Partnership Dispute?

Operating a business as a partnership requires cooperation between co-owners to ensure that the best decisions are made for the organization. Unfortunately, sometimes disputes arise among partners. When partners disagree, it is important to resolve the conflict as quickly and amicably as possible to keep things running smoothly and to avoid doing long-term damage to an important relationship.

An experienced Irvine, CA business dispute lawyer at Brown & Charbonneau, LLP can provide you with assistance in resolving your disputes. Whether through interpreting a partnership agreement, representing you in mediation or representing you in litigation, our attorneys will provide the advice you need to overcome your disagreements in a way that is right for your organization.

How to Resolve a Partnership Dispute

The first step in resolving a partnership dispute is to try to come to a compromise. Both of the partners should provide information on their position on the issue, with each coming to the discussion with an open mind. The goal is not always to win or to get your way, but to do what is right for the organization. In fact, partners have a fiduciary duty to put the long-term health of the company first.

If no compromise is reached through open discussion, you should refer to the partnership agreement as well as any other documents you created when establishing your company. The partnership agreement should, ideally, delegate responsibility and provide details on how best to resolve a partnership dispute if a disagreement arises.

Having a comprehensive agreement in place is essential to avoiding conflicts that can damage the foundation of your business and an Irvine business law attorney should help you to create your agreement when you first start operating your business.

When a dispute arises, refer to the agreement. Does it delegate responsibility for a particular decision or for a particular area of the business to either partner? Does it contain details about how disputes should be resolved or about whose choices prevail on specific aspects of business management? If the agreement, or other documents such as employment contracts, addresses the situation then you must follow it.

Your business plan created when you first began operating your company may also shed light on how the dispute should be resolved. Are there goals or steps outlined in the plan that relate to the dispute in question? If so, you can discuss with your partner how best to meet those goals through a compromise solution.

If you are not able to determine what decision should be made through negotiations on your own or through reviewing your partnership agreement, the next step to take is to consider mediation. A trained third party mediator can help you to negotiate more openly and effectively so that you can come to an amicable compromise.

Mediation can be a better solution than trying to litigate the issue because mediation is a cooperative process. Your Irvine business law attorney can help you to find a mediator and can advise you throughout the negotiations.

Finally, if mediation and compromise are not effective, your last resort may be litigation. Litigation may take the form of a contractual claim related to business documents, or you may take legal action for fraud, breach of fiduciary duty or coercion depending upon the circumstances. Litigation should always be a last resort.

Brown & Charbonneau, LLP can provide you with the guidance you need in resolving your partnership disputes. Call today to learn more.