When your business partner breaches a contract

When you enter into a business partnership agreement with someone, chances are, you do so because you believe in the other person and trust he or she will keep your business’s best interests in mind. Regrettably, however, business partnerships frequently turn sour. In some cases, partnership disagreements can lead to civil litigation.

If, for example, your business partner breaches a contract that exists between the two of you, you may wonder what your options are. You may, too, wonder whether terminating the partnership may be an option, and, if so, whether doing so is in your best interest. So, what options might you have available to you when your business partner breaches a contract?

Holding your partner liable for the breach

If your business partner’s contract breach hurts your once-shared business’s interests, you may be able to attempt to hold your former partner liable in court. Ultimately, your options as far as holding your partner liable for the breach will vary based on the type of breach that occurred. However, you may be able to do so if he or she misappropriated assets or dissolved a partnership before a contractual term ended, among other scenarios.

Expelling your partner from the partnership

Depending on certain circumstances, you may, too, be able to expel your partner from the partnership following a contract breach. However, to do so, your partnership agreement must include language dictating you are allowed to take this type of recourse in the event of a breach.

Settling with your partner

If you have at least some degree of hope you and your partner may be able to work together again after a contract breach, you may want to consider negotiating a settlement. You may also want to take this step if you have concerns about the potential for a lengthy, expensive court battle.

When business partners breach contracts, their partners often take one of these courses of action. You may, however, have additional options available to you in addition to those outlined above.

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