Partnership agreements govern business partnerships. What happens in the day-to-day of the partnership can be complex and challenging which is why business partners who find themselves in the middle of a disagreement should understand the different options that may be available for them to resolve their partnership dispute.
Options for resolving partnership disputes
There are several options for settling business disputes between partners including:
- Negotiation – it may be possible to negotiate a resolution to the dispute. Through negotiation, the partners may be able to reach a compromise and an agreeable settlement to their business-partner dispute.
- Partnership agreement – the partnership agreement can be used to specify how disputes will be resolved. The agreement may specify that the partners will need to try to mediate their dispute or may specify that one partner has final say over certain matters. It may also include a provision if one partner wants to buy out the other partner. Some pre-planning in a partnership agreement may help with disputes down the road.
- Mediation – business mediation can employ a third-party mediator to help the partners resolve their dispute. The mediator is typically trained to help the partners find a middle ground.
- Litigation – partners can litigate their business-partner dispute. Litigation may be necessary if the partnership agreement does not account for certain situations such as a buy out or liquidating the partnership business.
The best option for resolving a partnership dispute may depend on the advance planning for possible disputes and how disputes will be handled according to the partnership agreement.
Business law can help partners both set up a partnership agreement and also resolve disputes they come up in the partnership.