A New Jersey business partnership requires a certain level of trust. Yet, even the strongest business relationships have the potential to hit roadblocks. While simple disagreements between partners are bound to arise every now and then, sometimes, a partner’s actions constitute a contract breach.
Per SmallBusiness.Chron.com, partnership disputes are common in business, but having a carefully drafted partnership agreement may help you avoid them or navigate them when they do arise. What are some of the potential remedies you might have when a partnership dispute or contract breach arises?
Negotiating a settlement
Negotiating a settlement after a partnership dispute may have several benefits. It may help you avoid a lengthy and costly legal battle, for starters. It may also help you preserve some semblance of a working relationship, which may be important if you still plan to work together moving forward.
If you had the forethought to include a “liquidated damages” clause in your partnership agreement, it may benefit you when a contract breach arises. The clause may dictate a particular amount your partner is to pay you if he or she breaches part of your contract.
Pursuing litigation or expulsion
Depending on circumstances, you may decide to try to expel your partner from the partnership or file a suit against him or her following a partnership contract breach. If you have a partnership contract in place, it may already outline the circumstances under which you might expel or sue your partner due to a breach.
While these are some of the options you may have when a business partner breaches a contract, it is not an exhaustive summary of all possible options.