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What if a business dispute leads to litigation with my partner?

Going into business with another person is kind of like entering into a marriage. Two people may find themselves with common dreams and goals for a corporate enterprise and feel that they complement each other in terms of acumen and drive. However, like some married couples throughout New Jersey, not all business partnerships are matches made in heaven.

When business partners begin to challenge each other about important business-related decisions, difficult conflicts can arise. In some cases the conflicts can become so great that business litigation is initiated and the dissolution of partnerships becomes a possibility. One way to limit the potential for business partnership fallout is to enter into a partnership agreement at the outset of the business.

A partnership agreement is like any other agreement in that it establishes the parameters under which the business will operate and the role the partners will have with regard to its operations. A partnership agreement may specify that each partner has an equal right to decision-making about the enterprise or it may grant a particular partner more authority in certain areas of the business's happenings. It may also stipulate whether a partner has the right to initiate litigation against a fellow partner or if a different remedy is the proper avenue for airing partnership disputes.

If partners do not have a partnership agreement in place and the relationship dissolves, the business dispute between the individuals will be governed by New Jersey law. Attorneys who work in the business law field can assess their clients' needs with regard to potential litigation with their business partners. Those attorneys can also, however, help their clients make partnership agreements early on in the partners' relationships to establish business practices and to avoid costly business litigation from occurring at a later date.

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