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Typical Business Partnership Conflicts

In: Business


In a business, a partnership consists of two or more participants. Going into business with a partner can be advantageous, and it is very frequent among startups and professional service businesses. Unfortunately, a disagreement will almost certainly arise at some point. Even close friends and family members might get into business problems. Some disagreements are so severe that the partnership dissolves. They are most commonly referred to business partnership dispute.

When starting a new collaboration, it’s critical to do your homework. You should also consult with a knowledgeable Washington, DC business dispute lawyer to ensure that you have a well-drafted partnership agreement in place. In a partnership dispute, this is one of your finest defenses.

Partnership Disputes: Common Types

Here are some of the more prevalent business partnership disagreements:

Breach of Contract:

One of the most typical problems in a partnership is breach of contract. Between partners, you can have both verbal and written agreements, which is why having a professional draught your partnership agreement is so crucial.

Misuse of Trade Secrets:

Many organizations rely on confidential information to give them a competitive advantage. This can include confidential information about technology, formulas, and processes, among other things. Misuse of trade secrets occurs when someone uses this information without permission or after they have left.

Breach of Fiduciary Duty:

Partners rely on one another to uphold their promises to grow the business and prioritize the requirements of the company. A disagreement or business partnership dispute will arise if one of the partners violates their fiduciary duties.

Failure to Distribute Work Loads Fairly:

Partnerships might have quiet partners who simply provide finances, or they can have all partners active in the day-to-day operations. Failure to distribute the task equally could lead to a conflict between partners.

Disputes Over Resource Utilization:

Conflicts over the utilization of financial resources might emerge. Perhaps one of the partners wants to buy new equipment for the company, but the other partners don’t think it’s necessary.

Failure to Define Authority:

You must have a firm grasp on who has authority and for what. Failure to identify who is in charge of what will almost certainly result in a slew of disagreements as your company expands.

There is a plethora of additional forms of issues that may emerge and necessitate legal research. For example, there could be a disagreement about who is responsible for product liability claims or reimbursing a customer’s injury-related damages.

When a Partnership Dispute Arises, What Should You Do?

It’s critical to call an experienced business litigation attorney as soon as a problem begins. An attorney can look over your partnership documents and business partnership dispute to see whether you have any conflict resolution procedures in place and what your choices are. Your lawyer can also assist you in determining the various dispute resolution options open to you. Arbitration and mediation are examples of alternative dispute resolution (ADR).

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