3 potential grounds for suing a business partner

On Behalf of | Feb 29, 2024 | Business Disputes |

People want their relationships with their business partners to remain positive and profitable. Unfortunately, some partnerships eventually sour. One partner may feel frustrated by the other’s job performance or seeming lack of commitment to the business.

The partners may find themselves disagreeing about what the future holds for their organization. Occasionally, partnership issues may spiral out of control to a point where someone has grounds for suing a business partner. A lawsuit may be the only way to resolve an issue and/or protect a business. The three scenarios below are among the most common situations that lead to litigation between business partners.

A breach of fiduciary duty

Business partners owe something to one another because they have agreed to cooperatively run a business together. They also have a duty to the business that they formed. Executives and owners typically have a fiduciary duty to act in the best interests of a company. If someone put their own selfish desires ahead of what was best for the business, the situation may provide grounds for a partnership lawsuit.

Failure to perform

Perhaps one partner promised to leave their job and work full-time to develop the company. However, they never transitioned away from their employment, and the organization never received their full-time attention. Maybe one partner promised to invest a certain amount of money but has fallen behind on their investment schedule. Claims about the failure of an individual to perform contractual obligations could be grounds for suing a business partner.


Sometimes, one partner doesn’t just fail to put the company first. They actively commit crimes against the company by stealing from the business that they own. Perhaps they overcharge clients and pocket the extra capital. Maybe they have taken physical resources from the company that are quite valuable. If one partner discovers evidence that the other has embezzled from their shared business, the financial misconduct of their partner could provide them with the necessary justification for a lawsuit.

A lawsuit against a business partner can potentially compensate one party and their business for the misconduct or poor professional performance of a party who should have prioritized the organization’s success. Knowing when business litigation may be necessary can potentially help people to protect the investment they have made in an organization.