No one enters a business partnership expecting it to end in legal conflict. Partnerships are built on trust and mutual goals, but when disagreements arise, they can escalate into lawsuits. Whether your case involves contract breaches, fiduciary violations, or other disputes, Stone & Sallus is here to guide you through the complexities of partnership litigation.
How Do Business Partnership Lawsuits Happen?
Breach of Contract Claims
When one partner doesn’t live up to their contractual obligations it can cause disputes. Whether it’s not providing capital, services or other commitments, contract breaches are a common reason for partnership lawsuits.
Breach of Fiduciary Duty
Partners owe each other a duty of loyalty and care. If one partner acts in their self-interest or makes decisions that harm the partnership, it may constitute a breach of fiduciary duty, leading to legal action.
Committing Criminal Acts, Like Fraud
Fraudulent activities like embezzling funds or falsifying records not only harm the business but also erode trust. These acts often have severe legal consequences.
Tortious Interference
When a partner interferes with the business relationships or contracts of the partnership it can harm the company’s operations and reputation. Tortious interference claims often involve third party collaboration that undermines the business.
How to Resolve Partnership Disputes
Resolving disputes early saves time, money and the partnership itself. Here are some common ways:
- Negotiation: Open communication to find mutually agreeable solutions.
- Drafting Clear Agreements: Drafting strong partnership agreements upfront to define roles, responsibilities and conflict resolution.
- Legal Guidance: Working with experienced lawyers to mediate or prepare for court.
However, sometimes despite all efforts, a resolution may not be possible. When partners remain at an impasse and the business is no longer sustainable, it may be time to look at formal legal options such as litigation, buyouts, or even dissolution.
Legal Remedies in Business Partnership Lawsuits
- Litigation: When disputes cannot be resolved amicably, litigation becomes necessary. This involves filing a lawsuit and presenting evidence in court.
- Alternative Dispute Resolution (ADR): Not all disputes require a courtroom battle. Stone & Sallus can help you explore:
- Mediation: A neutral mediator facilitates discussions to help both parties reach a resolution.
- Arbitration: A faster, more private alternative to court where an arbitrator makes a binding decision.
- Buyout Agreements and Exit Strategies: Sometimes the best solution is for one partner to buy out the other. Drafting these agreements properly ensures a fair outcome and reduces future disputes.
- Judicial Dissolution of Partnership: If the partnership is no longer viable then legal dissolution may be the only option. This involves distributing assets and liabilities under court supervision.
Common Questions About Partnership Lawsuits
Can I Sue My Business Partner for Abandonment?
Yes. If a partner is walking away from their responsibilities and the business is suffering as a result, you have a case.
Can I Sue My Business Partner for Negligence?
Negligence occurs when a partner fails to perform their duties, causing harm to the business. This can be addressed through legal action.
Can I Sue My Business Partner for Using the Business’s Intellectual Property?
If a partner uses the business’s intellectual property without authorization, it may be a breach of trust or a violation of intellectual property laws.
Can I Sue My LLC Partner?
LLC partners are bound by specific operating agreements. If those terms are violated, legal action may be appropriate.
At Stone & Sallus, we know how stressful and expensive partnership disputes can be. Our team of business lawyers will work with you to address your specific situation. From negotiation and mediation to lawsuit and dissolution, we’ll defend your rights and get you the best result.
Let Stone & Sallus guide you through the complexities of business partnership lawsuits. Contact us today for a consultation.
