What Are The Remedies For Breach Of A Partnership Agreement?
Partnerships are among the most common business entities in Florida. Whether you are part of a general partnership (GP), limited partnership (LP), limited liability partnership (LLP), or limited liability limited partnership (LLLP), you should have a professionally-written partnership agreement in place. Your partnership agreement is the basis of your rights and responsibilities.
This raises an important question: What remedies are available if a partner breaches the partnership agreement? The answer depends on several factors, including the nature of the breach and the terms of the agreement. Here, our Miami partnership dispute lawyers highlight the key things to understand about partnership agreement breaches in Florida.
A Partnership Agreement is a Binding Contract
A partnership agreement is a legal and business document that dictates how a company (GP, LP, LLP, or LLLP) should be run and the types of obligations that partners have to each other. Of course, at its core, a partnership agreement is simply a type of legal contract. Similar to any binding contract, the breaching party can be held liable for damages caused by their failure to live up to the terms of the partnership agreement. This is done through a breach of contract claim. Cornell Law School defines a breach of an agreement as a “violation of a contractual obligation.”
Know Your Three Main Remedies for Breach of a Partnership Agreement
As noted previously, a breach of partnership agreement case will depend largely on the specific terms of the contract and the specific nature of the violation. With that in mind, the non-breaching partner generally has three main options available for pursuing a remedy for this type of contract violation:
- Settlement Negotiations (Mediation): It may be best to find a mutually-workable solution to a breach of partnership agreement case. Through informal negotiation or formal mediation, you and your partner may be able to reach a settlement. When possible, a settlement can help to preserve the viability of the partnership.
- Legal Action (Litigation or Arbitration): You have the right to take legal action against the partner that breached the terms of the agreement. Depending on the circumstances, this may involve filing a lawsuit. Though, in some cases, partnership agreements contain legally binding arbitration provisions.
- Expulsion (Dissolution): A breach of the partnership agreement could mean that the business relationship needs to be terminated. The breaching party could potentially be expelled from the business and/or the business partnership may be dissolved. If you have any questions about partnership dissolution, an experienced attorney can help.
Speak to a Partnership Law Attorney in Southeast Florida
At Pike & Lustig, LLP, our Florida partnership lawyers are dedicated to providing high-end legal representation. If you have any questions about the remedies in a breach of partnership agreement case, we are more than happy to help. Call us now or connect with us through our confidential online contact form. Our law firm provides legal representation all over Southeastern Florida, including in Miami, Fort Lauderdale, Boca Raton, West Palm Beach, and Palm Beach Gardens.