My Small Business Partner Breached Our Partnership Agreement
It is obviously bad news when a business partner breaches your partnership agreement. Luckily, there are several legal remedies when this unfortunate situation happens to you. If you have done business together with one or more other people, you have created a partnership agreement and this agreement is enforceable whether it is in writing or not. It is much better and much easier to take legal action if your agreement is in writing and contains clauses for how breaches will be cured. These procedures may also be provided in the operating agreement or the articles of incorporation. When you do not have specifics in writing about curing a breach of agreement, then you are subject to your state’s breach of contract laws.
Is There A Misunderstanding?
It is possible that a simple conversation with the offending partner may lead to a resolution in the breach. Beginning the process of curing the breach in this way will help your case significantly if you sue the breaching partner at a later date. Discussing the breach with your partner has the potential to save your business from a costly and potentially damaging court case.
Your Partner Refuses to Cure the Breach?
Many times, legal action is the only recourse for solving the unfortunate circumstance your are faced with when your partner refuses to negotiate or help to solve the issue. In this instance, you may nullify your agreement or contract by suing them. You will typically need to sue in the same jurisdiction where you signed or made the partnership agreement.
Dissolution May Be The Answer
You will have to dissolve your corporation if your partner decides they no longer want to continue with your partnership. Not to worry, you are not closing up shop because of this dissolution. You simply need to draft a new partnership agreement with any remaining partners and a new articles of incorporation. It is possible that your partner will be willing to avoid a lawsuit by dissolving the partnership, especially if there is no money involved.
Your case is important to us at Baggett Law and you can contact us with any questions you may have or for representation in a breach of partnership or contract suit at BaggettLaw.com or by calling us at (904) 396-1100.
