5 Key Situations Your Partnership Agreement can Help Avoid

Partnership-AgreementEvery business needs a partnership agreement to define your relationships as partners, outline your roles, and prevent disputes! Your agreement can be as brief or as thorough as you want, but as attorneys, we always advise our clients to err on the side of caution. It’s better to be safe than sorry, after all. We’ve outlined a few common scenarios that can cause conflict within a company—and how you can prevent them proactively in your partnership agreement.

Freeloading Partners

Maybe one partner only expected to contribute some money and equipment, leaving all of the hard work to you. Were you clear about your expectations in advance? Your partnership agreement should clearly define each partner’s role, along with responsibilities towards the business, such as money, time, effort, and division of labor.


While you may believe that you have a shared vision for your business, you never know how a big decision could cause a rift in your happy partnership. It is inevitable that you will disagree on something. Your agreement should outline how you will make decisions, both big and small, when you cannot agree.

Exit Strategy

What happens when a partner gets sick, retires, goes bankrupt or passes away? You may not expect any of these things to happen, but they are commonplace and should not take you by surprise. Be sure to decide how your business will handle situations where one of you leaves the partnership, including transfer of ownership and buyout options.

Trade Secrets

Every business has its own trade secrets, including business practices and client lists.[1] One unfortunate scenario is your partner leaving leave to set up a new company, taking your customers. Just to be safe, consider adding a non-compete clause to your partnership agreement. [2] The clause can prevent your partner from directly competing with your business within a limited scope of time and space.

Dispute Resolution

If it’s possible to settle your differences amicably, be sure to take steps to avoid the time, expense, and stress of litigation. Your agreement can include a dispute resolution clause to help you handle conflicts. The clause can require the dissenting parties to sit down with a neutral mediator you’ve chosen in advance to avoid litigation, or if confidentiality is a high priority, mandate binding arbitration.

For professional assistance in crafting a comprehensive partnership agreement, contact the law office of Muir & Associates. Our experienced business attorneys will get to your know your business to ensure the agreement is completely tailored to your needs.

Miami Business Lawyer here in J.Muir and Associates is the best lawyer in Miami FL.

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Author Bio

Jane Muir

Jane Muir is a Shareholder and Managing Partner of J. Muir & Associates, a Miami business law firm she founded in 2018. With more than 13 years of experience in business, she is dedicated to representing clients in a wide range of legal areas, including business litigation, contracts, corporate formation, insolvency, nonprofits, partnership disputes, and other business law matters.

Jane received her Juris Doctor from the University of Miami School of Law and is a member of the Dade County Bar Association and Coral Gables Bar Association. She has received numerous accolades for her work, including being named among the “20 Under 40” in 2016 by Brickell Magazine. Super Lawyers named her a Rising Star from 2014–2019 and selected her for the Super Lawyers status.

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