Partnership disputes and the importance of listening

On Behalf of | Dec 11, 2020 | business litigation

When California business owners face a dispute with their business partner, usually the last thing they want to do is take the dispute to court. In some cases, litigation is necessary to find a fair resolution; however, it is usually expensive, time-consuming and exhausting while drawing your attention away from your company. On the other hand, declining to consult an attorney can result in your business being taken away from you, or worse.

If you, as a business owner, strive to keep any sort of partnership disputes out of court – as well as preserve your business partnership – then try to ensure that you and your partners are prepared to sit down together and figure out a solution. While undoubtedly uncomfortable, it is far less expensive and destructive than litigation.

LISTENING IS ESSENTIAL TO RESOLVE A PARTNERSHIP DISPUTE

Business owners should schedule a time to meet with their business partners and have an honest and open discussion about the dispute. At this meeting, business owners should:

  • Designate time for each partner to discuss their perspective;
  • Address the issues and concerns regarding the dispute; and
  • Concentrate only on the present issues before considering a solution.

This allows business partners to discuss the conflict in-depth, and negotiate in-house before taking any form of legal action. It is often highly beneficial for business owners to address a meeting such as this in the dispute-resolution clause of their partnership agreement, such as a mediation provision. This informal process allows a third-party (such as a retired judge or expert in the field of the business) to helps the parties resolve the dispute before it escalates.

NOTE: KEEP EMOTIONS OUT OF THE CONVERSATION

It can be difficult to keep emotions out of these kinds of disputes, especially since many business partners commonly have an established friendship outside of the business.

However, it is critical to set emotions aside and focus only on the business relationship and the business itself. Letting emotions cloud your judgment can impede your ability to understand – which, in turn, can prevent business partners from reaching a solution.