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The consequences of breaching fiduciary duty

Texan residents who have a fiduciary relationship with a client will hold some form of fiduciary duty. This comes with some important rules and regulations that must be followed stringently, or the duty holder can face severe penalty.

FindLaw first defines fiduciary duty and what a breach of this duty looks like. Whenever one party is obligated to act beneficially toward another and is held legally responsible to do so, this is called fiduciary duty. Therefore, breaching fiduciary duty usually entails doing something that is not beneficial, or even detrimental, to the client. Potential breaches can include withholding information due to conflict of interest, acting out of self-interest, or acting in a way that directly conflicts with the client's interests.

What is a failure of disclosure?

Texan business owners have a duty to fulfill any contract that they sign into. Many actions can be considered a breach of contract, though. This includes any potential failure to disclose information, knowledge, or other key pieces that are crucial to fulfilling the contract.

Cornell Law School defines a failure to disclose as any situation in which a person or entity - such as a company - did not accurately or fully disclose all information that the other involved parties should have been aware of from the start. Factors that may be examined can include:

  • How important the disclosed information was
  • The extent that the person or entity knew information wasn't being disclosed
  • How many times this happened
  • If you or your company have a history of failing to disclose information

How can you solve a business dispute?

Texan business owners like you understand that unfortunately, a time may come in which there are disputes arising in your business that you need to deal with. Massey Law Firm, PLLC, is here to help guide you through this difficult time and reach a conclusion that suits your business well.

Fortunately, you don't need to worry about jumping into legal action right away. In fact, many different disputes among business partners, vendors, or employees can be resolved through simple negotiation. If possible, you may want to have a professional mediator on hand. They will provide a neutral third party that ensures everyone feels they're being treated fairly and without bias. They can help keep personal feelings out of the equation, leading to an end result that benefits everyone.

How to recognize and handle embezzlement

Texas business owners usually think they can trust their employees. If they realize the company finances are not balancing, however, people may find themselves in a difficult situation. Embezzlement can happen at even the smallest companies, so it is important for people to recognize the signs and understand what they should do.

If business owners suspect someone at the company is embezzling money, it is important to take action. FindLaw says that people should usually figure out which employees had access to the missing funds. They should generally interview each of these people and keep notes. It is a good idea to have a neutral person in the room to monitor each interview. Once business owners know who embezzled money, they should usually ask this person to leave his or her job. Many people may want to recover the money they lost. It is a good idea to speak to the business's insurance agent to understand if the company needs to file a claim.

Important elements for a partnership agreement

If you are looking to start a new business in Texas with one or more other people and plan to establish it as a partnership, you will want to know how to create a good contract that protects not just each of you individually but also your new business. Entering into a partnership in a business setting is in some ways like entering into a marital partnership. It requires that both parties openly discuss what can at times be difficult topics but if you do this, you and your business will be better off down the road.

As explained by Forbes, one of the things you and your partner should discuss and document in a contract is how one of you might someday leave the business. It is always possible that one person wants to be done before the other or maybe life situations such as a health issue might force this to happen. Including buy-out provisions or other clauses is therefore important.

What is a restraint of trade?

Texan business owners and entrepreneurs will have to deal with a number of hurdles as their business grows. Some may be easier to anticipate or handle than others, but they can all be a headache. For example, you might find yourself facing unfair situations that could actually restrict or damage your business.

Restraint of trade is one of these unfair practices. At its most basic definition, FindLaw states that restraint of trade refers to any activity that interferes with a business's ability to conduct everyday work as they usually would. As an example, if two businesses agree to fix a price that drives a third business out of the area, this is considered restraint of trade and is, in fact, an illegal practice.

Do I need to resolve my partnership dispute in court?

Running a successful business can be incredibly stressful, and if you have one or more business partners, there is a good chance for an eventual dispute. Disputes can arise from many charged issues, and may seem impossible to resolve. At this point, you may think that litigation is your only option, but is it?

Litigation can be a lengthy and expensive process. Additionally, a lawsuit between business partners may strain the relationship beyond repair. Fortunately, there are other resolution strategies that may end your dispute with less rancor and more overall benefits. What other tactics should Texas business owners consider before going to court?

Tips for strong business partnerships

The entreprenuerial spirit is at the cornerstone of many new business ventures in Texas. A new idea can involve a complete new product or maybe a new way of addressing a problem. Regardless of the type of business, it is not uncommon for people to pair up with others when creating a new company. However, also not uncommon is the failure of many business partnerships. Learning how to build a strong partnership is important for anyone choosing this option instead of going it alone.

Forbes explains that one of the first things someone looking for a business partner should do is identify their own strengths and weaknesses. This list could then be used to guide the process of finding a partner and that partner should have a very different set of strengths and weaknesses. When each partner brings a different set of skills or knowledge to the table, the overall package is stronger and there may be less chance that the two people will compete for control over a certain functional area of the business.

How do you handle a dispute with business partners?

Partnering with other people for business comes with both benefits and drawbacks. One of the biggest potential drawbacks is the possibility that you and your partners may not always see eye to eye on important things. These small disagreements may grow and can lead to an eventual dispute. Fortunately, Massey Law Firm is here to help guide you through these issues in a way that will keep your business safe.

Many different legal problems can arise because of disputes among business partners. Potential problems may include things like:

  • Fiduciary duty claims
  • Ownership interest
  • Issues related to voting
  • Violation of nondisclosure agreements
  • Breach of partnership agreements
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Massey Law Firm PLLC
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Houston, TX 77007

Phone: 346-800-6101
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