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Did Your Business Partner Breach The Partnership Agreement? You Have Four Legal Options


A partnership agreement is the foundation of the legal relationship between business partners. While there are partnership laws in Florida, the partnership agreement serves as the basis for each partner’s rights and responsibilities. A breach of partnership agreement can cause serious harm to the non-breaching party. This raises an important question: What can you do if your business partner breaches the partnership agreement in Florida? Here, our West Palm Beach partnership dispute  attorneys highlight the four main options that you have.

  1. Do Nothing 

While generally not the best choice, you always have the option to do nothing—or at least do nothing in any formal way. You could allow a breach of partnership agreement to go unchallenged. By doing so, you will generally lose out on your right to pursue your legal remedies. Doing nothing may make sense if the breach is immaterial (very minor) and you can deal with the matter informally. 

  1. Settlement Negotiations (Informal, Mediation, etc)

A breach of partnership agreement does not mean that you need to get into a protracted legal dispute. Still, you may need to act to protect your rights. You can enter into settlement negotiations with your business partner. Indeed, breach of partnership cases are often well-suited for settlement. The settlement negotiations can either be informal or more structured, such as in mediation. 

  1. File a Legal Claim (Arbitration or Lawsuit) 

You have the right to file a legal claim if the partnership agreement was breached in Florida. In some cases, you will need to file for arbitration to get a remedy. Arbitration may be required if your partnership agreement has a mandatory arbitration provision. As arbitration is essentially a faster, mini version of a trial, it is not uncommon for business partners to include an arbitration clause within their partnership agreement. If you are not bound by a forced arbitration clause, you have the right to file a lawsuit over the breach of the partnership agreement. As a general rule, it is best to try to work out a settlement before filing a lawsuit. Though, every case is different. 

  1. Seek Expulsion from the Partnership Business (Dissolution)

Finally, in cases of serious breaches, you have the right to seek the expulsion of your business partner from the partnership. Most often, this will mean that the business partnership will be dissolved and the parties will go their separate ways. Dissolution of the partnership may be the best available option if you need to take action to protect your legal rights and financial interests from a major breach of the partnership agreement. Examples include fraud, embezzlement, misuse of partnership assets, and breach of fiduciary duty.

Speak to a Partnership Dispute Attorney in Florida

At Pike & Lustig, LLP, our commercial law attorneys have extensive experience representing clients in partnership disputes. If your business partner breached the partnership agreement, we are here to protect your rights and help you find the best solution. Contact us today to set up a fully private appointment with a lawyer. From our legal offices in West Palm Beach, Miami, and Wellington, we handle breach of partnership agreement cases throughout South Florida.



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