In New Jersey partnerships, disputes can lead to the potential loss of money, the loss of customers and wasted years. It is generally in the best interest of business partners to attempt to resolve any disputes in a reasonable and amicable fashion. It may be possible to have agreements in place that help prevent such issues to begin with.
Disputes can arise for many reasons, most commonly because of misalignment of the goals or management styles of the partners. Sometimes, people who enter into partnerships are afraid to assert their positions during the business's honeymoon phase, later realizing that their partner's approach is untenable to them or to the business's clients. Failing to plan well when considering partnership formation can lead to many problems, including future disputes.
Prospective partners may wish to consider a few things when they are contemplating forming a partnership. First, partners should not begin working until they have a strong agreement in place. Although some people try to rely on downloadable forms containing boilerplate language, these are seldom a good idea in the long run. Many businesses might be better off by writing an agreement that is specific to their business and their goals. Partners should also avoid using a win-lose approach with their peers. The only people who stand to lose in a protracted dispute are the customers or clients of the partnership.
Partnership disputes can be costly and can potentially be destructive to a business. People who are considering forming a partnership should take care when selecting their prospective partner. They should also be very careful to consider all contingencies and draft a legally sound and complete agreement to which all partners will adhere. A business law attorney can be of assistance in the preparation of such an agreement that addresses the specific needs of a client.
Source: Forbes, "How To Avoid A Partnership Dispute", Shane Robinson, November 14, 2014