Five Crucial Points to Remember During Partnership Disputes

Working with a business partner offers several advantages, including shared responsibilities and workload, diverse skills and expertise, increased capital, balanced decision-making, and shared risks. However, partnerships, like any other business, can sometimes face disputes. Partnership disputes occur due to various reasons, including financial disagreements, different goals and visions, communication issues, and personal differences. Partnership disputes, regardless of their cause, can rock the foundation of a business. A dispute can even tear a partnership apart. For these and many other reasons, it is vital that when partnership disputes arise, partners handle these disputes as effectively as possible. In this article, we discuss five crucial points to remember during partnership disputes.

1. Open and Honest Communication is the Key

Many partnership disputes occur or are exacerbated due to miscommunications or misunderstandings. It is crucial for partners involved in a dispute to have open and honest communication. All parties should openly and honestly talk about their concerns and views. Lack of communication can worsen the situation. Apart from sharing their concerns and perspectives, partners should actively listen to each other. Understanding the root cause of the issue or how to solve the matter requires not only speaking but also actively listening to the other person.

2. Discuss the Matter in Private

A common mistake partners make when disputes arise is discussing the matter in front of employees or clients. Publicly airing partnership disputes can damage the reputation of the business, making it seem unstable or disorganized. It can lead to clients and employees losing confidence in the stability and confidence of the business. Partnership disputes should be discussed in private. If there is nowhere private to discuss matters on the business premises, consider taking the discussion off the premises.

3. Manage Emotions

It is normal for business owners to feel passionate about their businesses. However, you need to manage your emotions and stick to the facts. High emotions can cloud judgment and escalate the dispute. Focus on what is best for the business and not your personal feelings. Do not make decisions based on personal feelings but rather on business interests.

4. Consider Seeking Outside Help

Sometimes, it may be necessary to call in a third party to help resolve a partnership dispute. Several types of third-party assistance can help resolve partnership disputes, including the following;

• Legal counsel: An attorney with experience handling partnership disputes can help partners understand their rights and obligations. They can help you negotiate and, if necessary, file a court case.
• Mediation: A mediator can facilitate communication between disputing partners and help them reach a mutually acceptable resolution. Mediators are trained to help disputing parties identify underlying issues, improve communication, and find common ground.
• Arbitration: An arbitrator or an arbitration panel can hear both arguments and make a binding decision to resolve the dispute.

5. Compromise is Key

When it comes to resolving partnership disputes, compromise is vital. However, while compromise is important, certain things cannot be compromised. Identify areas where compromise is possible and be willing to compromise. Unwillingness to compromise can prolong the dispute and potentially permanently damage the partnership.

Contact a Qualified Silicon Valley Business Lawyer

If you are in the midst of a partnership dispute, it may be wise to seek the help of a qualified business lawyer. Contact SAC Attorneys LLP to schedule a consultation with one of our qualified Silicon Valley business lawyers.