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What is an accounting cause of action?

On Behalf of | Sep 4, 2023 | Business Law, Civil Litigation

When dealing with business disputes, it might be wise for you to seek options that can help preserve whatever you can. These conflicts can put you in traumatic situations and damage long-term relationships with business partners. Fortunately, some options can help settle these issues without expensive legal repercussions, such as an accounting cause of action.

An accounting is a right of action where you and your partners file requests to settle dispute-related claims and liabilities equitably. This route is applicable in countless legal disputes involving claims settlement. Ideally, this option can balance the parties’ equities, serve justice and end disputes.

However, this option might only be applicable based on specific factors, such as the existence of fiduciary or confidential duties between parties and complex transactions carried out over time. Because of these requirements, this option is usually possible for partnership disputes in business.

This process can also involve accounting defined by law, including detailed documentation of relevant business transactions. These records go beyond receipts and cover contributions, assets and liabilities. Since this option uses business records as the basis, it can be a straightforward solution when settling partnership disagreements.

Determining if an accounting cause of action is appropriate

In some cases, you and your partners can immediately tell if an accounting cause of action is a possible option. Still, choosing this route can depend on the circumstances and the nature of the partnership disputes. Sometimes, extensive litigation is necessary, considering other contributing factors to the conflict.

If you are facing problems with your business partners, seeking reliable legal counsel is essential. Doing so can help determine a positive course of action based on the situation. Also, it can help you navigate through procedures and address issues as they arise.