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Partnership Disputes: Usurpation of Business Opportunity


A corporation’s officers and directors owe certain duties to the company. Among other things, these trusted individuals are prohibited from using their position to take a valuable business opportunity for themselves. A corporation’s shareholders can bring a usurpation of business opportunity claims against an officer or director who violates their legal responsibilities.

While business partnerships can be a little more complicated, partners do owe certain responsibilities to each other. This raises an important question: What happens if a partner is accused of taking advantage of a business opportunity for themselves. Here, our West Palm Beach partnership dispute attorneys explain three things you should know about Florida law.

  1. Florida’s Partnership Law Regulates Business Partner Conduct

Under Florida law (Florida Statutes § 620.8404), business partners owe certain limited fiduciary duties to each other. Although the law makes it clear that a business partner is not a “trustee”, there is still a fundamental duty of loyalty. As stated in Florida’s partnership laws, a business partner’s duty of loyalty includes an obligation to “refrain from competing with the partnership in the conduct of the partnership business before the dissolution of the partnership.”

In effect, this means that partners are generally prohibited from competing directly with their own partnership—whether in a personal capacity or through another business entity. If there is a business opportunity available to the partnership, partners generally cannot simply take advantage of that opportunity for themselves, thereby cutting their business partners out of the arrangement. 

  1. The Terms of the Partnership Agreement Still Matter

Your partnership agreement always matters. It governs much of the relationship between you and your business partners. Florida courts are clear: You cannot use a partnership agreement to simply waive the duty of loyalty required by our state’s partnership laws. That being said, business partners can expressly identify specific types of conduct/activities that do not constitute competition against the partnership or violate the duty of loyalty. 

  1. A Lawyer Will Protect Your Rights in a Dispute

Every partnership dispute is unique. Partnership disputes centered on an alleged violation of the duty of loyalty can be especially complex. It is not always clear what constitutes an improper competition against the partnership. If you and your business partners are involved in a disagreement over the alleged usurping of a business opportunity or inappropriate competition against the partnership, you should consult with an experienced lawyer. A partnership attorney who is familiar with Florida laws, your partnership agreement, and the specific facts of your case will help you determine the best course of action.

Schedule a Confidential Consultation With a Partnership Law Attorney

At Pike & Lustig, LLP, our Florida business lawyers have considerable experience handling a wide range of partnership cases. If you are locked on a dispute over the usurpation of a business opportunity or any related matter, we are available to help. Give us a call today to set up your completely confidential initial consultation. We represent business partners in West Palm Beach, Miami, and throughout all of Southeastern Florida.



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