Orange County Partnership Dispute Lawyer
The dynamic world of business can be complex and unpredictable, even for the most savvy entrepreneur, mid-level manager, and C-suite executive. This is because businesses are powered by a diverse set of employees, who each have their own thoughts and outputs that influence operations. Sometimes, these interactions among employees result in conflict that can temporarily stop operations or even permanently end a business without a resolution.
While these disputes can occur among the pool of entry-level talent, they also can be found among top business partners. Understanding more about partnership disputes can help Orange County, CA business leaders better plan for conflict and how to incorporate legal counsel to reach a faster solution.
What Is a Partnership Dispute?
A partnership dispute is when two or more individuals who are legally bound to a business partnership are facing disagreements on company-related issues. If left unresolved, there can be tremendous consequences for the organization that both individuals are responsible for. It can also create a divide among significant leaders in the organization and strain what should be a harmonious relationship that keeps operations running smoothly.
What Are the Most Common Causes of Partnership Disputes?
While there can be an infinite number of reasons why business partners are not getting along, some of the most common causes that result in partnership litigation include:
- Conflicting Business Visions: Details of the business world change rapidly over the years, and an original vision that partners may have agreed upon when forming the organization can change just as fast. For example, one partner may raise a concern and suggest a rapid expansion of operations to combat a perceived threat in the market. This may worry another partner, who would prefer to advance under a more conservative growth model. Because both partners believe that their opinions should be executed to save the livelihood of their business, the differences create a dispute.
- Financial Disagreements: We all know that money creates conflict in the household, and the same holds true for business partners. Investments in growth, profit-sharing, and other high-stakes financial decisions can cause anxiety among business partners when there is disagreement. While all business partners have an interest in protecting the bottom line, there are often different perceptions of what decisions will result in favorable profitability.
- Roles and Responsibilities: Everyone has differing opinions on what the term partnership can mean. One business partner might see this as an equal split of workload and responsibility, while another business partner might feel like they have a better vision for the company and, therefore, are more comfortable handling extra work. Conflict between these perceptions can cause tension in the relationship, especially in business decision-making.
- Contractual Misunderstandings: Contracts are designed for clarity, yet it’s impossible to know what someone’s impression of certain clauses or terms can be without having an open discussion. In instances where these discussions don’t take place, conflict can later arise when a business event triggers a need to act based on the terms of a contract, and the business partners have very different understandings of what that action needs to be.
Disputed Business Partnerships FAQs
Q: How Do You Resolve a Partnership Dispute?
A: Without a plan in place, resolving a partnership dispute can be like navigating a minefield with no direction. Open communication is often the first step to advancing toward a resolution. This can help both parties try to get to the root of the disagreement. If that fails, engaging legal counsel or a non-biased mediator can help assess the situation and offer fair and balanced guidance. Having the original partnership agreement in place will be the foundational resource for navigating the dispute.
Q: How Do You Handle Disputes in a 50-50 Partnership?
A: Both parties have equal influence in a 50-50 partnership, so preventing either party from pushing through their own agenda is critical. Coming to the table with mutual respect and a genuine interest in resolving the dispute for the health of the company will go a long way to bring both sides together. Within the formal discussion, it may be the first time that they are hearing the opposing view. Taking time to have a break to process any new information and see if it alters your original position can be a simple action to speed along a dispute resolution.
Q: Can You Sue One Partner in a Partnership?
A: If there has been an established breach of contract, that partner has the legal authority to sue the other. This is especially true when the individual’s actions caused direct harm to the business. Any evidence of fraud or a violation of their fiduciary duty can also warrant legal action. While there is precedent to advance with partnership litigation, it is typically advised that all alternative resolution methods are exhausted before involving the courts.
Q: What Are Partnership Litigation Attorneys?
A: Litigation attorneys are legal professionals who have a deep understanding of every law that governs a business partnership. They understand the nuances of business contracts and provide counsel when there is suspected fraud or violations to prove. Their knowledge ensures that all partners operate within the confines of business law and that no one is acting against the interest of the business. Aside from being called on when a dispute arises, partnership litigation attorneys could also be valuable when a business is forming and is in need of a legal review of contract drafts before they are finalized.
Q: What Steps Can Be Taken to Prevent Partnership Disputes?
A: Clear communication from day one is going to be the most helpful attribute of the business relationship. Drafting the partnership agreement with the support of a CA lawyer can help clarify the different roles and responsibilities. It can also be helpful to schedule a regularly occurring partner meeting to make sure that, as the business advances, so does your alignment. You also want to create a safe space to air any concerns before they bubble up and are left unresolved.
Contact Thaler Law for Your Business Partnership Dispute Case Today
If you are facing challenges with your business partnership and need legal counsel to investigate, connect with the litigation team at Thaler Law today. We don’t believe that anyone should navigate these challenges alone, and we always maintain an open-door policy for any business partner who is feeling isolated and needs legal support. We look forward to helping your business thrive for many years to come.