Partnership Dispute Attorneys in San Jose, California 

Partnerships are formed when two or more individuals come together to pursue a common business interest. Although partnerships can be beneficial, they also come with their own unique set of risks and challenges. 

It’s important to understand what causes these disputes and how to resolve them. Our business law attorneys at The Heritage Law Group help partners resolve disputes, protect their financial interests, and lessen the negative impact of disagreements on their business. We have offices in San Jose, California, and Houston, Texas, and we serve partners in surrounding areas in both states. Reach out today for guidance.   

Common Causes of Partnership Disputes  

Partnership disputes can occur for a variety of reasons, but some of the most common include the following:  

• Disagreements over financial matters, such as how profits and losses should be divided;  

• Disagreements over management decisions; and/or  

• Differences in opinion on strategy or goals.  

These disputes can be caused by a lack of communication between partners or by an imbalance in power between them. In some cases, one partner may have too much control over decision-making or may not be contributing equally to the partnership’s success. 

It’s crucial to understand what causes these disputes so that you can take proactive steps to prevent them from occurring between you and your partner. If you are already dealing with a partnership dispute, you need to understand your options for resolving it.  

Legal Claims in a Partnership Dispute  

When partnership disputes arise, it’s essential to understand what types of legal claims may be involved so that you can determine how best to proceed. Here are some common types of legal claims that could arise in partnership disputes:  

• Breach of contract. Breach of contract claims that one partner fails to meet his or her obligations under the agreement. 

• Breach of fiduciary duty. Breach of fiduciary duty claims that one partner mismanages funds or takes corporate opportunities away from other partners.  

• Tortious interference. Tortious interference claims that one partner attempts to disrupt another’s business relationships with third parties.  

Other potential legal claims include fraud, conversion (theft), negligence, defamation, and unfair competition.  

Resolving a Partnership Dispute  

As a business partner, you understand that disagreements are inevitable. There are several routes available for resolving partnership disputes, including mediation, arbitration, and dissolution.  

Mediation 

Mediation is often seen as the first step in resolving partnership disputes because it facilitates communication between partners and helps them work toward an amicable resolution. During mediation, an impartial third party—the mediator—acts as a facilitator between both parties and helps them find common ground by guiding conversations and promoting productive dialogue. The mediator does not make decisions on behalf of either party but instead assists both parties in reaching their own mutually beneficial resolution. 

Arbitration 

If mediation does not come up with a satisfactory outcome, then arbitration may be another useful tool for resolving partnership disputes. In arbitration proceedings, each partner presents their case before an arbitrator who makes rulings based on evidence from both sides and applicable laws or regulations. Arbitrations can be binding or non-binding, depending on the terms agreed upon by both parties prior to the start of the process. Binding arbitration means that once an award is issued by the arbitrator, it must be followed; if non-binding arbitration is chosen, then partners have more freedom to negotiate following the ruling. 

Dissolution 

In some cases, dissolution may be necessary when a dispute cannot be resolved through other means, such as mediation or arbitration. Dissolution involves dissolving the partnership legally and dividing assets among partners according to pre-established agreements such as those found in a partnership agreement or other legal documents governing the relationship between partners.   

Each case is unique, which is why what works in one dispute may not work in another.  

The Partnership Agreement 

The best way to prevent future disputes between partners is to have a well-drafted partnership agreement in place that outlines expectations regarding:  

• Roles and responsibilities 

• Management structures 

• Decision-making processes 

• Financial arrangements 

• Dispute resolution procedures 

Having these expectations clearly defined from the outset can assist greatly in avoiding misunderstandings that could lead to costly disputes that require formal resolution methods like mediation or arbitration –– or worse yet –– the dissolution of the partnership altogether.  

By taking this proactive approach, you can ensure that your business relationship remains mutually beneficial while protecting yourself from unnecessary disruption due to unforeseen conflicts down the line.