It’s not uncommon for business partners to have disagreements even if they generally get along well. California law provides a number of ways in which such disputes can be resolved in a timely, affordable and amicable manner. In some cases, it may be possible to find common ground without the need to go through mediation, arbitration or litigation.
Talk to your partner
Resolving business disputes through informal conversations is generally the fastest, easiest and least expensive way to do so. In fact, you don’t necessarily have to meet with your partner in person to have a conversation. Instead, you can exchange emails, have a live chat online or use other forms of technology to talk from wherever you happen to be. Private talks may be best for partners who want to speak without feeling as if their words will be used against them or for partners who aren’t afraid of compromising without being prodded to do so.
When to bring in outside parties
It may be best to opt for mediation or arbitration if private talks are doing little more than frustrating the parties involved. For instance, if your partner insists that your operating agreement must be read a certain way, it’s unlikely that you’ll be able to change that person’s mind without help.
Potential outcomes
There are a number of potential outcomes in a partnership dispute. For instance, your partner may agree to your demands to split profits in a more equitable manner or to other requests that you may have. However, if your partner is unwilling to meet your demands, it may be necessary for you or your partner to divest from the business. In an extreme case, a judge may order the business to close.
Resolving a business dispute as quickly as possible is preferable for the current and future health of a company. If a dispute lingers, employees or vendors may wonder if they have jobs or if they will get paid. Furthermore, customers may decide that the brand is too toxic to continue doing business with.