We both signed a promissory note to borrow the funds from a relative to start the business. We both are 50/50 responsible for the debt. His part in the business is to share his knowledge and operate the business using his knowlege; however, he failed to do so. The promissory note stated that we make the first payment a few months later. Since the business was operating for a few months and all expenses were paid from the borrowed funds, there was no income coming in. So we never made the first payment to my relative, even up until now, the first payment was not made. I know I am responsible for my share of the debt, can I sue my business partner for failing to come up with his share and failing to perform in the business? We already dissolve the partnership.
Anyone can sue anyone for anything, and while it sounds like you'd have a good case against your partner for breach of your partnership agreement, of they've got no money, you might be throwing good money, or at least good time, after bad.
If your relative sues both of you for breach of the promissory note, you can cross-complain against your partner for "indemnity," but again, you can't get blood from a stone.
I'm assuming your partnership agreement is oral --if there's a written agreement, that may provide other remedies (such as maybe attorney's fees to the prevailing party in any dispute) and conditions, so see a litigator for help.
If the promissory note was signed by your partner, then your relative can sue him directly. Most promissory notes make joint obligors (borrowers) jointly liable for the entire debt. Either partner can sue the other for contribution, ie: to reimburse 1/2 of any sums actually paid on the note. If your partner failed to perform in the business as agreed you can sue him for "wrongful dissociation and/or breach of contract, but if the business doesn't have a profit history then damages will be difficult to prove.
Yes.
1. You can make a claim against the business partner for failure to perform. One problem you may have is that you have not specified exactly what your partner failed to do.
2. You can make a claim against your business partnere if you are sued on the promissory note as well.
You should seek local counsel on this matter.
BW
