Partnership Disputes And Mandatory Arbitration: What Business Owners Need To Know

Business partners can end up in a conflict for a wide range of different reasons. If a dispute does arise, you need to carefully review your partnership agreement. The agreement provides the sources of your rights and responsibilities.

In many cases, partnership agreements include forced arbitration provisions. In Florida, forced arbitration clauses are generally enforceable. In this blog post, our West Palm Beach partnership dispute attorneys explain the key things to know about partnership agreements and forced arbitration provisions.

Florida Law: Mandatory Arbitration Agreements are Usually Enforceable 

A mandatory arbitration clause is a contract provision that compels parties to use the arbitration process to resolve any disputes that arise under the agreement. In other words, if your partnership agreement has a forced arbitration clause, you are restricted from filing a lawsuit in a partnership dispute.

Florida courts put a strong emphasis on upholding the bargained-for terms of a contract, including mandatory arbitration. If there is a compulsory arbitration clause in a partnership agreement, the court will likely enforce that provision on the grounds that it was voluntarily agreed upon by the parties. To challenge a mandatory arbitration provision, a petitioner generally needs to prove that the contract provision (partnership agreement) was in some way deceptive or defective. 

You may be wondering: What will happen if you try to file a lawsuit instead of going through business arbitration? Most often, the counterparty in the partnership dispute will “invoke” the arbitration clause. By doing so, they are asking the Florida court to dismiss the case. Assuming no issues, the court can rule it has no authority to hear the case. Unless there is good cause to challenge the arbitration provision, it is generally best to simply prepare for the arbitration process. 

A Skilled Commercial Arbitration Lawyer Will Protect Your Rights

The American Bar Association (ABA) describes arbitration as a private process that is “similar to a trial in that the parties make opening statements and present evidence to the arbitrator.” Many business partners opt for mandatory arbitration because the dispute resolution process is faster and more cost effective than a full trial.

If you are locked in a partnership dispute and you are preparing for arbitration (mandatory or voluntary), it is critical that you consult with an experienced Florida business arbitration attorney. These cases are complicated and there are specialized rules and procedures that govern the arbitration process. A lawyer will protect your interests and help you find the best solution.

Call Our Palm Beach County, FL Partnership Lawyer for Legal Advice and Support

At Pike & Lustig, LLP, our Florida business law attorneys are standing by, ready to protect your rights and help you find the best solutions. We have deep experience in partnership law and arbitration proceedings. Call us today for a confidential initial appointment with a lawyer. With a main office in West Palm Beach, we represent businesses and businesspeople throughout Palm Beach County, including in Boca Raton, Boynton Beach, Wellington, Jupiter, and Greenacres.

Resource:

americanbar.org/groups/dispute_resolution/resources/DisputeResolutionProcesses/arbitration/