With any type of business partnership, there are going to be disagreements. It’s a natural part of a partnership, but sometimes these disagreements are not always resolved and can fester. This is actually more common today than you may think.
Today, about 80% of business partnerships end with the partners going separate ways, especially when there’s a dispute that can’t be resolved. Many issues that arise aren’t just disagreements. Things like misunderstandings, miscommunication, and different expectations can lead to a dispute that might just end a partnership. So, what happens if these disagreements turn into a dispute and how can you navigate the dispute?
Read Your Partnership Agreement
If a dispute does arise, one of the first things you should do is refer to your partnership agreement. Your partnership agreement should address several things, including contributions, distributions, ownership, decision making, critical developments, dissolution, and have a section on dispute resolution. This section should tell you how to handle the dispute and what the resolution process will look like. Every partnership agreement will be different, which means the way you handle a dispute will depend on what is in your agreement. This could be anything from mediation to an arbitration settling the issue.
Use Your Partnership Agreement to Solve the Dispute
Once you’ve read your dispute resolution section in your partnership agreement, the next best step is to discuss things with your partner and decide the best way to resolve your dispute. If you can’t work out your differences with your partner, then it may be time to have a third party get involved. A third party is neutral to the issue at hand and can follow exactly what is in your partnership agreement to help get you and your partner to a resolution.
Before looking at litigation, consider a mediation service for the job. They can be cheaper and just as effective at resolving your disagreement. However, that may not be the best option for your partnership. If you believe legal action will better help the disagreement for your partnership, then take that route instead.
Keep Yourself Protected
With all this talk about a dispute, you may be asking yourself: how can I stay protected during the partnership dispute process? One of the best ways to protect yourself is to have a partnership agreement established before you enter into a partnership. Make sure the dispute resolution section is clear so that you and your partner know exactly what to do when a dispute comes up. And if legal action is taken, ensure that you have strong representation to protect you during the dispute.
If you do require legal representation for a partnership dispute, the Law Office of C. Gregory Coburn is one of the best in Ocean City, Maryland. We can help resolve any disagreement in your business partnership with our expert services. For more information, contact us today!