What to consider before suing a business partner

On Behalf of | Oct 20, 2021 | Business Disputes |

You’d never thought the moment would come, but now you find yourself thinking about suing your partner. Taking legal action can help solve the disputes you have with them, and sometimes it is necessary to do so. However, suing your partner is not a decision you can take lightly. To know whether it is convenient for you to file a lawsuit against your business partner, there are some factors that you must consider, as well as other options to solve the dispute.

When suing makes sense

What you are going through is normal. Many partners go through legal disputes. However, not all fights need to end up in lawsuits, which is why you must first identify if you have a valid reason to sue. There are different reasons a partner could sue another, such as:

  • When a partner broke their fiduciary duties (worked for the competition, misused or stole the business profits, etc.)
  • When a partner broke the partnership agreement
  • When a partner violated the company’s intellectual property rights
  • When a partner acted against the business interests for their own gain
  • When partner engaged in conduct that could affect the business
  • When partner abandons the business

Partners can also sue each other when they cannot agree on anything and their antagonism could ruin the business.

Important considerations

You may have a valid reason to sue, but many things come into play during litigation. To make the best decision, you must not only focus on what your partner did but on what could happen if you decide to act. For example, you must consider:

  • Your likelihood of success (does your partner has something that they can use against you in court? do you have a way to prove your statements?)
  • What do you want out of it (do you want to recover damages? do you want to get your partner out of the business?)

Think about your objective and consider if filing a lawsuit is the only way to solve the dispute. Remember that mediation and a settlement offer are also a possibility.

Making the best decision

If you have strong grounds for a suit, you can hold your business partner responsible by taking your case to court. Filing a lawsuit is sometimes necessary to save your business from failure, so you must not feel guilty if you decide to take legal action for this reason. Your business is your life project, and you can stop your partner if they are damaging it in any way.