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What are significant causes of partnership disputes in Irvine, CA?

Most of the corporations and companies in California are formed through partnerships. These relationships are born when two or more professionals with the same vision and goals team up and start a business. Forming a partnership can be simple, as it does not require a lot of formal paperwork.

There are numerous advantages associated with a partnership, with the most significant one being the sharing of duties and responsibilities. It is also easy for two or more people to raise capital or funds to start or maintain a business. However, it is also common for partners to clash over various business matters. Read on to learn about some of the major partnership disputes.

Breach of contracts

Breach of contract claims is among the leading causes of partnership disputes. It occurs when one of the members of a partnership violates the terms laid out in the contractual agreement.

The major factors that contribute to a breach of contract include disputes over rights, responsibilities and business management in general. When forming a partnership, the parties need to have remedies prepared for a breach. This will help avoid any future disputes or make it easy to defend or pursue a lawsuit over an alleged contractual infringement.

Breach of fiduciary duties

For a partnership to succeed, the involved parties need to be loyal, open-minded, sincere and act in the utmost good faith. A breach of fiduciary occurs when one of the parties acts unjustly and hurts the rest of the members financially.

Fiduciary duties in California are not enforceable, but a breach of fiduciary duties can be tied to a criminal act. When pursuing a lawsuit, the plaintiff must prove that a fiduciary relationship existed and that the breach caused damage to them. They can sue for compensatory damages or punitive damages.


Fraud in a partnership occurs when one of the members misappropriates assets. This can include:

  • Falsifying cash receipts or invoices
  • Payroll fraud schemes
  • Fraudulent transfer
  • Embezzlements
  • Misappropriation of trade secrets  
  • False booking keeping.

This leads to losses and debts. Fraud also leads to a breach of contractual agreements and fiduciary duties. Therefore, partners must set comprehensive measures for safeguarding the business’s most important assets, including intellectual property.

Unfair distribution of workloads

When two or more parties form a partnership, it can be easier to distribute roles and duties. Some members may have the role of providing for firms, while others may be entitled to managing the businesses. The partners should fairly divide the duties, as disputes may arise when some members believe that the workload has not been shared fairly.

Disputes between partnerships occur often. An experienced lawyer can ensure that they are resolved in a way that all parties find fair.