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Photo of attorneys E. Kelly Conway, Michael E. Gehring and Stephen G. Harvey

Two signs that your business partnership could end in litigation

On Behalf of | Apr 26, 2023 | Business Disputes

Sometimes, two people meet and hit it off immediately because they have common goals and interests. In other situations, you cannot seem to mesh with another person even when you have much in common.

You may have ways to extricate yourself from encounters with those you can’t seem to get along with in your personal life. Unfortunately, it isn’t so easy to walk away when this individual is your business partner. Here are two scenarios that often precipitate a business partnership dispute:

1. Violations of a partnership contract

Say you needed a partner to meet the rising demands of your customers or clients. At first, things went well, but your partner began to siphon company profits or make decisions without your input, going against the terms of your agreement. You asked them to stop and comply with the contract you both signed, but they still do whatever they please.

2. Disagreements that just won’t stop

Even the best working relationships can degrade over time, potentially compromising your operations. Constant disagreements are one of the first signs that your partnership (and thus your company) is in jeopardy. When such conflict continues unchecked, it sets the stage for hostility and cannot typically be resolved through discussions.

Should you expect litigation?

You and your partner have much at stake in your company. It is reasonable to believe that neither of you wants to give up your business dreams. You may be ready to concede on a few points, but can you be sure your partner will do the same?

You cannot always know if a business partnership dispute will lead to litigation. However, you can still be ready for the worst by anticipating and planning for the possibility. Knowledge of Pennsylvania business partnership rules and regulations can also help you prepare.