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Los Angeles Business Organizations Law Blog

Signature or handshake: Which contract is best for you?

You probably make business agreements on a daily basis without a contract. When you order food at a restaurant, drop off your dry cleaning or get a haircut, you don't feel the need to negotiate terms. Even if you buy or sell a car to a family member or ask a good friend to help with a home repair, it may never occur to you that a signature on paper is necessary.

Perhaps you have conducted your small business this way too. The familiar, trusting method of reaching an agreement and sealing it with a handshake may seem sufficient for your clients. However, what happens if something goes wrong?

The 1-star truth behind negative reviews

When you have a rare evening free from work, you certainly want to make the most of it. If you decide to try a new restaurant or see a movie, like many California consumers, you may check various websites for reviews and ratings. After all, your time and money are precious, and you don't want to waste either on a bad experience.

Trusting in online reviews is widespread. People can post their opinions of hotels, home improvement contractors, items they buy online, even their college professors. However, you may have been shocked to read a scathing review of your own business, and the details of the post make you believe it was not authentic.

What does it take to make a partnership work?

Many different factors make up a business relationship. Partners must have similar skills, the ability to communicate and a common business goal to have a chance at success. Even with these things in play, the partnership may not work.

If you decided to go into business with a partner, the chances are good that the partnership started as a friendship. You and your partner likely had mutual interests and a certain degree of respect for each other as business associates. When it works well, your business may thrive. When it isn't working, you and your partner may make each other miserable.

3 questions to ask during a business partnership dispute

Before entering into your business partnership, you likely asked yourself and your potential partner numerous questions. These questions undoubtedly allowed you to gain a better idea of whether the partnership would feasibly work and whether your business ideals aligned. Once you covered all the areas you felt pertained to the situation, you likely moved forward with your business partnership in a confident manner.

Of course, even strong beginnings can turn into unfortunate endings. As a result, you may have recently found yourself at odds with your business partner. Partnership disputes occur relatively often in the business world, and you may wonder the best way to handle your particular predicament. When assessing the problem, you may want to ask yourself and your partner these questions:

Legal action may remedy breaches of fiduciary duty

Business relationships can often act as fruitful enterprises for many individuals. Because businesses typically have many parties involved at various levels of power and responsibility, you and other individuals associated with the company likely have to place your trust in the abilities and actions of other higher-up parties. In many cases, these higher-up individuals make business decisions for the benefit of the company.

Unfortunately, as a company shareholder, you may find yourself feeling at times that board members have not taken your best interests into account. As a result, you may begin questioning the nature of the business relationship.

Help! I'm facing a business-related dispute.

Forming a business in California is similar to forming a marriage. It is intended from the very beginning to be a long-term relationship. The partners essentially agree to connect their futures and personal goals together and stay faithful in the business relationship. However, you may find yourself in need of a business divorce if you have been in business with a partner for a while but have gotten into a dispute and now need to go your own way.

Business litigation may help end partnership disputes

When you first started your business, you likely had ideas that you and your business partner would rule the company and gain desired success. Unfortunately, you may have fallen victim to going into business with someone who later revealed differing ideals and goals. As a result, you may wish to end your partnership in order to pursue the dreams you had in mind.

After deciding to move in such a direction, you may need to take various steps before a separation finalizes.

Navigating the process of dissolving business partnerships

Are you currently facing issues regarding a need to sever a long-standing business relationship? If so, remember, you are not alone, as many other California business people have faced similar situations in the past.

If your reasons for determining your business alliance needs to end have to do with a breach of contract, or, your business partner's failure to operate in good faith, it is understandable you may feel upset and worried about how best to handle the situation while, at the same time, moving toward a new and successful future on your own.

The fear factor in business litigation

Hindsight is of course always 20-20. You may very well realize now what steps you could have taken to avoid a dispute about business ownership.

In a small business, however, it's easy to overlook all of the scenarios you may need to plan for. For example, if you had to do it over again, you could have had a clearer clause about options for one partner or shareholder to buy out the other or others when certain contingencies occur.

But now that you are in a dispute, what type of approach is most likely to help you get it resolved most effectively?

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