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What to do about an accidental partnership

While there would be no litigation without conflict, a partnership dispute started in a different place. Partnership disputes begin with two parties who want to carry out something together.

Accidental partnerships are an area of business litigation that starts with an even more pure motive. Both parties trusted each other and counted on a common goal they wanted to accomplish. Somewhere along the way, the relationship may have turned from its original purpose, but there is still a foundation of trust.

Because of relationships like partnerships, business litigation can be about more than pounding your fist on the table until you get what you want. Business litigation can help both parties get back to terms that will allow them to accomplish the goals they had in the first place.

We created a what?

While a partnership may not have been the original plan, there are circumstances where two parties are working together in such a way that they look like they are business partners. When that is the case, a legal partnership can be formed without realizing the consequences.

If you're in an unintentional partnership, part of the negotiation will include what to do about the partnership going forward. Is it time to formalize the arrangement so that both parties can continue working toward the original goal but with revised terms? Is there another type of partnership that would be better?

Bring a willingness to negotiate

Once you've reached the litigation phase, there are certain things that you will have to compromise on. However, if both parties come into the negotiation with the understanding that there can be a middle ground, it can make negotiation easier.

During the negotiation, think about the ultimate goal what you might be willing to sacrifice in order to reach that goal. The terms might change quite a bit from the original plan, but if both parties are willing to work together, it's possible to reach a new agreement that still benefits everyone.

While a litigation situation is not anything that you wanted to deal with, it is possible to get to the other side of the negotiation with some (or all) of your goals intact. Just because the arrangement isn't going as both parties intended, doesn't mean that there can't be a resolution that can work for everyone.

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Chodos & Associates
1880 Century Park East
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Los Angeles, CA 90067

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