Has a business partner failed to fulfill their obligations?

Business partners generally share responsibilities and also the proceeds if their companies prove successful. Partners starting companies together often draft thorough agreements outlining their expectations for one another and their plans for the company.

If both partners fulfill their obligations, they may be able to develop a thriving organization. Sadly, some people overextend themselves when preparing to start a partnership. Others may not review the terms of the agreement closely and may then fail to fulfill their responsibilities. A partner frustrated by another’s lack of follow-through may need to take legal action.

What does the contract require?

Sometimes, disputes about a partner’s performance stem from unspoken expectations. Typically, partners can only enforce terms that they agreed upon in writing. Therefore, a review of the initial partnership agreement and business formation documents can help validate the belief that a partner has failed to fulfill their responsibilities.

If they have not committed an adequate amount of time to the company, if they fail to provide financial investments or if they don’t meet performance expectations, then the other partner may have reason to take legal action. In some cases, providing formal notice of their default or omissions can lead to a partner fulfilling their responsibilities.

Other times, the other partner may need to invoke a buy-sell agreement included in their initial contract with one another. It may be possible to arrange for a buyout so that the underperforming partner exits the organization with appropriate compensation. Other times, litigation could potentially compel a partner to fulfill their responsibilities if they are in breach of their contract.

Frustrated partners not getting the support and resources they need may need help taking action to protect themselves and the company that they started. Pursuing business litigation can force a partner into contractual compliance or can end a non-functional business partnership.