This paper is going to be devoted to considering a problem which two business partners faced as well as thinking over the possible ways to resolve this problem. It is known that disputes between the two parties can be solved in three ways – through litigation, arbitration or mediation. And the purpose of this paper is to make a conclusion whether it will be better for the parties to choose one of these ways of dispute resolution.
The situation under discussion consists in the following. The two business partners – Sue and Tom – have owned a business for five years. Their business consists in purchasing and renovating homes and apartment buildings. During the course of the five years of their business partnership Tom and Sue have owned seven properties. Some time ago they received a proposal to purchase another property and just then their lack of understanding started. The reason for that was the fact that Sue was absolutely for the purchase, while Tom hesitated considering the price of the building to be too high.
Eventually, Tom asked for some time to consider the proposal and promised to tell Sue his decision on a precise date. Although, when he was supposed to inform Sue of his decision he was out of town on vacation. Sue decided to purchase the property in her own name. When Tom returned from vacation, he told Sue he agreed to buy this property. Sue informed him of her having already bought it, but in her name. And as a result Tom asked her to put the property in joint name so the partnership could own it. When Sue refused Tom decided to take proceedings and to invite some third party to help the partners resolve this dispute.
The situation is common and very often business partners have this kind of misunderstanding for the reason of one being more decisive and one being more careful. This is simply explained by psychology and the fact that all people are different in their behaviors and events perception. What is not clear from the situation is the issue connected with the formal partnership agreement between Tom and Sue. It is known now, when a lot of businesses fail for the reason of inability of the partners to find the solution which could satisfy both of the parties the question of partnership agreement arises. If the parties do not have a proper and preconceived agreement they often are unable to find common language later.
On the other hand, Tom was wrong when he did not provide Sue with his opinion as he promised – on the certain date. His leaving for a vacation could have shown Sue his disinterest in this exact purchase. Tom showed his worth as a not very responsible person who cannot keep his promises even in business. This issue can justify Sue’s actions because she simply did not want to lose profit because of her partner’s irresponsibility or uncertainty. Similar situations are described in Sharon Horowitz’s, PhD, principal of the consulting firm, CenterNorth, paper called “It Takes Two to Tango” – only commitment and devotion to business can result in success of the venture and help the partners avoid various confrontations.
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