5 Things to Keep in Mind When a Business Partnership Dispute Arises

Partnerships can be a great business format to share the burden of leadership. Still, like all business entities, partnerships come with their own set of downsides—particularly when you and your partners are in the midst of a dispute. If you’re having a disagreement with your partner(s), you can and should avoid litigation except as a last resort. Here are a few tips to keep in mind for a lawsuit-free dispute.

1) Your partnership agreement may have the answers.

Your company should have a written document, whether it’s an operating agreement or a partnership agreement, to clearly define each partner’s role in the business. The agreement should include a wide range of stipulations, including each partner’s rights and responsibilities; how much control each partner has over the business; how you will make major decisions together; and compensation.

Your written agreement should also address worst-case scenarios, like what you should do in the event of a conflict. When a dispute does arise, you can consult your agreement to see how you should proceed. If you don’t have a partnership agreement in place, it’s never too late to bring one into the mix. It’s absolutely essential for heading off conflict among your business partners.

2) Your partner is not your opponent.

It’s important to consider how you frame business disputes in your mind. Are you keeping up your end an argument because you want to “win,” or because you really care about the subject of your dispute? Sometimes a shift in your mentality is the best answer. Don’t take business disputes personally, and instead focus on the best ways to truly deliver value to your investors and customers.

3) You can try outside-the-box solutions.

Sometimes you need to try an unusual solution to get the best results. For example, many businesses and workplaces have implemented “active listening” sessions to help each party better understand the other party’s position. During the exercise, each person must quietly listen to the other person, without speaking or reacting, for about 3 to 5 minutes. These sessions can help to cool tempers, add perspective to each party’s opinion, and ensure that everyone’s voice is heard.

4) There are plenty of alternatives to litigation.

When a dispute can’t be resolved amongst yourselves, you may want to consider a form of alternative dispute resolution like mediation. Mediation involves a neutral third party who is trained to resolve disputes quickly, cleanly, and creatively. When your goal is to find an amicable solution that works for everyone, mediation is both a professional solution and an effective one. Your mediator may end up helping you strike a compromise that benefits each party.

5) Professional help is available.

When you’re not sure exactly what solution will work best for your business, you should consult with a lawyer who will take the time to understand your needs. The knowledgeable attorneys at Cove Law have plenty of experience drafting contracts and agreements, making strategic decisions to resolve disputes, and representing parties in litigation if the need should arise. Contact us to get more insight into your partnership dispute and find a workable solution.

Share this on...Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Email this to someone

Written by Andrew Cove

Cove Law has significant experience defending federal investigations and formal actions by the Federal Trade Commission, the Consumer Finance Protection Board and the U.S. Department of Justice, as well as similar matters on the state level by the respective state Attorney General’s Offices and other local agencies.