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  • Daniel Rodriguez

Common reasons for business partnership disputes

Most often than not, having a partner in a business means having an additional source of ideas, capital and resources. However, this also means an increase in potential conflict between partners. Fortunately, there are various ways to resolve partnership disputes. But before doing so, it is essential to understand the root cause of the conflict because this will guide parties on how they can amicably sort out the issue.

The sources of clashes

There are many causes behind disputes between business partners. Most of them arise out of a contractual relationship. Some of these reasons include the following:

  1. Differences in goals and priorities for the business

  2. Overlapping authority

  3. Uneven workload distribution

  4. A breach of fiduciary duty

  5. Fraudulent activity

  6. Misappropriation of funds, assets and resources

  7. Contract violation

  8. Partnership abandonment

Causes like a breach of fiduciary duty further branch out to more specific reasons for disputes, such as failure to perform obligations and negligence.

Some dispute causes are lighter, which partners can internally discuss and settle. However, some have heavier consequences for the business and require serious attention.

Moving forward: Settling the conflict

While some partners resolve disagreements within themselves, others may have difficulty settling and would have to sort the issue out through another dispute resolution method. Usually, these disputes arise from a contractual relationship, so reviewing the contract and related documents is important.

Whether the discussion is internal or done through mediation or litigation, it is advisable to consult with a neutral and experienced attorney to develop the best strategy. This will help lay down each partner’s rights and responsibilities and protect the business’s interest.

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