Partnership Disputes: What is the best to Settle?

Partnerships can prove to be truly successful business alliances. Working with a partner optimises your work capacity, enables diversification and aids risk management. Working with a friend also enhances your work experience and can prove to be a reliable support in a time of crisis.

However, this only holds true when the partnerships work out. In instances, when partners cannot work through their problems, the entire business suffers from its consequences and can eventually shut down completely. The infamous Saverin and Zuckerberg, Facebook conflict and JD Rockefeller and Maurice Clarke disagreement are all examples of famous business partnerships that ended in bitter results. Hence, it’s important to take business conflicts seriously and attempt their peaceful resolution.

Here are a few ways of resolving business disputes amicably:

Consulting a Lawyer

Partnership disagreements are similar to spousal disputes in many ways. When things go south, these conflicts tend to get ugly and uncomfortable. Hence, it’s crucial to engage the services of your corporate counsel at the first sign of trouble. A skilled business lawyer can help you look at the problem more objectively and advice on better ways of resolution.

Investigating the Problem

For most conflicting partners, it’s difficult to view the problem accurately. There is always more than one root cause of the argument. At times, these problems can span beyond differences in management of business operations to personal preferences and aversions. Graham’s Hierarchy of Disagreement can be an effective way to approach this conflict. If your argument is constrained to the top three levels of hierarchy, the resolution is relatively easier.

Reviewing the Agreement

Reviewing the partnership agreement with your legal counsel can help you understand the consequences of your conflict better. It’s also advisable to hold a meeting with the top management and investors to discuss the issue. People who are invested in your organisation are more motivated to make the partnership work and can push you towards resolution.


Alternative Dispute Resolution (ADR) are techniques of resolving business disputes in a way which is beneficial for both the conflicting parties. The different methods of ADR are:

  • Mediation: Can prove effective when both parties are on cordial terms and can communicate well with the help of a mediator.
  • Arbitration: Can be an operative tool for resolution when partners are not communicating well with each other.
  • Negotiation: Ideally suited when both partners are still on amicable terms with one another and can communicate effectively.

Each of these techniques has benefits of their own. Our legal experts can help you select the most appropriate process of ADR and act as your representative for the same.

Considering Dissolution

Although, this is the last resort but parting on amicable terms is much better for your business than resolving the arguments in court. A well-drafted partnership agreement usually has inclusive terms for exit specifically designed for such scenarios. Review the contract with your partner and your lawyer to end the dispute and move on with your dealings.

Resolving partnership disputes is a task that needs to be undertaken with extreme tact and diplomacy. An experienced law firm can guide your organisation through these boggy grounds and reach positive resolutions.