Hindsight is a beautiful thing. If you knew all those years ago that your relationship with your business partner would turn sour, you would have chosen to go it alone. Of all the disputes you can face when you own a company, one with your business partner may be the most challenging. If anyone else brought litigation against you, there would be two of you to face it. Now you are one on one, with the person you trusted and relied on.
Partnerships are like any relationship. They do not always work out as expected. When you enter into one, you need to plan for the worst and include clauses in the contract on how you can end your relationship.
What is wrong with going to court over a partnership dispute?
A courtroom battle is unlikely to make for a happy ending. While you may win financially, you are likely to have lost a friend. Whoever loses may never accept they were wrong and could carry that grudge for life or return to court to try and have the decision overturned.
What alternatives are there to litigation?
A far better solution in many cases is to choose mediation or arbitration:
- Mediation means you and your partner sit around a table with your attorneys and try to work things out. You do not have to agree, but you need to agree to disagree. Then you can look for a compromise that allows you both to walk away with your pride, finances, and, hopefully, your friendship intact.
- Arbitration involves deferring judgment to a higher authority. Sometimes things happen, and you are not sure why they happened or what the best solution is. Employing an expert third party to decide for you allows you and your partner to move on.
Both mediation and arbitration can save you time and money – both of which can be in short supply when you own a business.