If your California business enters into a joint venture agreement with another firm, it’s imperative to have a dispute resolution plan. Doing so ensures that you can exit the alliance in as timely and smooth a manner as possible whether the problem was intentional or caused by forces outside of your control.
Put the right people in place
Ideally, the people who know the most about the issue will be the ones empowered to resolve it. For instance, if the dispute revolves around the terms of the joint venture, those who are experienced in contract law may be best suited to handle the issue. In addition, make sure that the negotiators have a friendly or cordial relationship with each other. Otherwise, it may be difficult to negotiate in good faith, which might render going to court an inevitable conclusion.
Seek outside opinions
Sometimes, it may not be possible to come to an agreement when neither side has trust in the other. In such a scenario, it may be best to hire an outside party to resolve the dispute. This person may act as either an arbiter or a mediator depending on whether you want that party to issue a ruling or simply work with each side to come to an agreement. Of course, it’s critical to vet the outside party to ensure that there are no indirect ties to either party involved in the dispute.
A joint venture dispute may be resolved in a number of ways such as rewriting a contract or changing the management team. It’s also possible that the venture will need to be dissolved either voluntarily or through a court order. Ideally, the case will remain out of court as formal legal action is often more expensive and time consuming.