Partnership business structures can be highly effective since they combine the expertise of multiple individuals. However, due to multiple people having authority over making significant decisions, these types of entities often face serious disputes and conflicts.
Are you finding yourself in murky waters after entering a partnership contract? Then this piece is for you.
In this piece, we will examine how dispute resolution lawyers Perth can assist you in mitigating conflicts in business partnerships. Join us as we delve further.
Before discussing how to settle disputes between business partners, let us understand what this is.
Business partnerships are carried out by a couple of individuals with similar goals in mind, such as churning profit.
The Partnership Act 1895 (WA) governs such legal agreements between individuals.
Whether a business is bound by the legalities of the partnership will depend on the intentions of the partners. Some rules (although not exhaustive) that apply include:
Unless strict action is necessary, the conflict can be resolved via negotiation, arbitration or mediation. However, if a dispute arises, it is essential to obtain contact with reliable lawyer for civil matter.
An important factor in successful resolution is having a meticulously crafted formal partnership agreement in place. This document outlines all the probable ways in which conflicts can be resolved without escalating the situation further. Additionally, it dictates the roles and responsibilities of each partner and the regulations to be followed when one of them no longer serves the company.
It is drafted when the partnership is formed, especially before tensions arise. These documents provide clear guidelines on what to do if a partner wants to resign from their position.
But what if your partnership doesn’t have an existing contract in place regarding how to resolve conflicts?
In that case, you can undertake the following measures to mitigate the issues at hand without letting them grow any bigger and disrupt business operations:
It’s okay if you haven’t formed partnership agreements before getting into business. But when a dispute comes knocking at the door, start the process of drafting the best contract. Engaging in proper discussions with all the partners and working out the best outcome of the partner agreements must be your priority. Do it before the dispute escalates and makes you run to court.
You cannot underestimate the power of face-to-face discussions in resolving partner disputes. Approach your partner and try to reach a common ground to put an end to the issue.
Engaging a professional lawyer can be beneficial in mitigating partnership conflicts. Their role can be diverse in the process, from formalizing the partnership agreement to offering legal guidance to properly handle the issue. Alternatively, they can even send a “letter of claim”. In case the dispute doesn’t get resolved and reaches the court, the best lawyers can represent you and ensure that you receive everything that you are entitled to from the partnership business.
If negotiation doesn’t work and the dispute persists, partnerships can opt for one of the following conflict resolution mechanisms:
It involves an unbiased third party called the mediator who promotes dialogues between the disputing partners trying to reach a satisfactory solution. They do not provide the verdict but promote conversation so that the partners can continue their relationship even after the dispute.
In this process, the arbitrator takes a look at the evidence and the statements made by each side to conclude. This is more formal than mediation but offers more flexibility than the court proceedings.
Ending notes
Partnership disputes are on the rise in Australia. To guide you through such tough situations, civil lawyers in Perth emerge as a ray of hope. With their expertise and knowledge by your side, you can overcome any commercial obstacle that comes your way. So contact them today to get valuable advice on how to resolve your dispute.