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3 common causes of business partnership disputes

On Behalf of | Mar 6, 2024 | Business Litigation |

A business partnership can provide a lot of unique opportunities. It can take a lot of time to discuss the intricacies of a business partnership agreement. Parties may need to negotiate what’s expected from each other, what each party gains from the partnership, how operations are handled, bylaws and much more.

However, no matter how intricate a business partnership agreement is, there’s always the possibility of disputes. Here are a few:

Uneven workloads

A common cause of partnership disputes happens when a partner believes they are taking on more work than the other, which can lead to resentment if it’s not resolved. A partnership agreement may clarify what duties each partner is responsible for doing. If a partner feels they are doing too much, the terms of the legal contract may need to be altered. 

Breach of fiduciary duty

A partner has a fiduciary duty to act in a business’s best interest when they agree to a partnership. This means that the partner should put the business’s needs ahead of their own, act honestly and fair, perform their duties diligently, keep information private and other responsibilities. These duties may be different with each partnership agreement. Violating these duties could lead to severe damages. 

Communication difficulties

Another frequent issue within businesses is a lack of communication. Partners should freely communicate with each other to ensure smooth business operations. When partners have poor communication, there can be mistrust, misunderstandings, conflicts and lost opportunities. A partnership agreement may clearly spell out how communication is handled for a successful business. 

A business partnership agreement can include anticipatory clauses to avoid major conflicts. It may not be possible to anticipate every issue. It’s often important to understand every legal option when creating a business partnership or settling a dispute. 


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