While you may consider yourself a good business partner, you never know what kind of situation in which you might find yourself. Partnership disputes can arise for many different reasons, so preparing for the worst-case scenario is essential. This article will discuss three ways you can deal with a partnership dispute if it arises.
Have a written agreement
People often lament not having an umbrella when it rains – the wise prepare in advance for the downpour. The most crucial step to avoid a dispute is having a written agreement before trouble starts. A well-drafted written partnership agreement should include everything you need to understand each partner’s responsibilities and expectations clearly. The contract can allow the partners to reach an amicable solution when emotions rise and memories of what someone said might fade. The document should also provide a mechanism for resolving disputes that might arise.
Involve an attorney
When dealing with a business partnership, you should seek someone with an outside perspective. When you and your partner can’t come up with a solution on your own, you may want to hire an attorney to help you work out the details of the dispute. Make sure you select an attorney you trust because you will heavily rely on them for guidance. You will need to decide whether to hire your own attorney or whether the partnership will retain one. Ethics prevent an attorney from doing both.
If the attorney represents the partnership and not an individual partner, they can act as the mediator between the partners. The lawyer can help the partners arrive at an agreement with which both feel comfortable. The attorney can also provide the parties with an unbiased opinion on the situation, which can have great value as a mediator.
Take some time to discuss the problem while focusing on the solution
Time spent pointing out what someone else did wrong does not. The first consideration involves examining whether the business’ prospects for future success as a going concern. If so, your goal should be to analyze the situation and determine whether the parties can repair their relationship. A well-crafted partnership agreement would include a structure through which the partners can resolve their differences. Consider how the parties can work together on finding a solution before rushing to end the partnership. Though the partner may have different viewpoints, they may develop a strategy that provides mutual benefit allowing the business to continue. The process most likely will take time and effort but may lead to greater success than the partnership had previously obtained.
Disagreements in a partnership and generally in life are unfortunately inevitable. The partners may find the process of working through the dispute challenging, but an amicable solution often saves time, money, and emotional investment. A partnership agreement providing a roadmap for resolving disputes allows the partners have a greater likelihood of overcoming the trouble spots and continuing the partnership into the future.