Successful business partnerships in New York require careful planning from the outset. When people decide to go into business with others, they should recognize that they will need to be able to work together to ensure the success of their enterprise. Even when partners are carefully chosen, disputes might sometimes arise. Knowing how to resolve business disputes is key to ensuring that the venture’s operations will not be negatively affected.
Drafting a thorough management agreement
When a partnership is being contemplated, it is a good idea for the parties to draft a thorough management or partnership agreement that includes provisions for how business disputes will be handled if and when they arise. For example, the agreement might call for mediation or allow one partner to have the final say about specific matters. Having a partnership agreement in place might help the business work through differences effectively without causing harm to its operations.
Methods for resolving disputes
There are a few ways to resolve disputes when they arise. The first step for settling partnership disputes is for the partners to negotiate with each other to try to find a middle ground. If negotiation does not help the partners to agree to a compromise, the business might then opt for mediation. In mediation, a neutral third party who is trained in facilitating dispute resolutions can meet with both partners and try to facilitate an agreement that works for both. Finally, if mediation does not work, one partner can file a civil lawsuit to try to force a buyout of the other partner’s interest.
Anticipating potential partnership disputes is important whenever people decide to go into business together. Creating a comprehensive agreement can provide a structure for how disputes will be resolved in the event they arise.