When two parties have entered a partnership, both of them hold responsibilities to follow the agreement. This is why the breach of partnership agreement is necessary. Because, when one of the party hurts your business, then you can take legal action to fix it and this is also to make sure each party respects each other.
Breach of Partnership Agreement Definition
This is a document that details the responsibilities and rights of each party who are in a business relationship. Therefore, when someone breaches the agreement, then another one is allowed to do a legal action or vice versa.
The reason for making this breach of partnership document can be caused by various actions. The following things can be done when a party breaches the agreement.
- Expulsion – This is an act of kicking the partner from an agreement. However, in certain cases you cannot expel a beaching partner without dissolving the whole partnership. The charge of damage can be high when this expulsion is done in a bad term.
- Settlement – This can be an effective solution because it is less time-consuming and less costly with these legal matters. Both parties can agree with the new written agreement that can bind legally. In this way, the partnership can be restored with the newer agreement. Furthermore, you can take legal action when you reach a condition that is not in your favor.
- Damage liquidation – The breaching party should pay the cost of the damage when the contract stated there is a clause about the damage that should be liquidated to determine its costs the breaching party should pay. However, this should be broken down into reasonable causes.
- Breach liability – The breaching party could be sued when it leaves the contract before it ends. However, this can be done when there is a good reason.
What Types of Damage That Can Be Categorized Into Beach?
There are several classifications about a breach that needs to be understood by both parties.
- Consequential – This is a damage that is not stated in the agreement which is caused by the breach. This can be a loss of business opportunities and a bad reputation.
- Expectation – This is the amount of money that will be received from the breaching party. This protects the injured party which gets well compensation after getting injured.
- Compensatory – The compensatory damage is given to the injured party such as loss and injury. This is given as the result of a party’s negligence which includes physical therapy, medical treatments, increased living expenses and also transportation.
Having the breach of partnership agreement will help the party facing the future dispute and find a solution about the damage resulted. You can download our templates to make a professional breach of the partnership agreement. The templates are designed by professionals and it is editable too. You can get the best free template on this website. Search your desired templates and find tons of them!