By Jacob C. DeRue (October 7, 2026)

Introduction

A partnership dispute is a disagreement between business partners over finances, management, ownership, or the direction of the company. Even the strongest business relationships can break down, and when these disputes escalate, they can threaten the business itself.

In short: Under the Virginia Uniform Partnership Act, partners owe each other fiduciary duties of loyalty and care, have a right to inspect partnership books and records, and may resolve disputes through negotiation, a lawsuit, an accounting, a buyout, or judicial dissolution. Strict deadlines apply, including a five-year limitations period for partnership accounting claims.

What Law Governs a Partnership in Virginia?

Virginia general partnerships are governed by the Virginia Uniform Partnership Act, Va. Code § 50-73.79 et seq. The partnership agreement governs how partners deal with one another and with the partnership, and the Act fills in any gaps. If neither addresses an issue, courts apply general principles of law and fairness.

There are limits to what a partnership agreement can do. It cannot unreasonably restrict a partner’s right to see the books and records, and it cannot eliminate the obligation of good faith and fair dealing, though it may set reasonable standards for measuring it. The practical takeaway: your partnership agreement matters, because many disputes turn on what it says about management, capital contributions, withdrawal, buyouts, and dispute resolution.[i]

What Fiduciary Duties Do Partners Owe Each Other?

Under the Virginia Uniform Partnership Act, partners owe each other two fiduciary duties: the duty of loyalty and the duty of care. As fiduciaries, partners must act in the best interests of the partnership and their fellow partners.

The Duty of Loyalty. A partner’s duty of loyalty requires the partner to:

1. Account to the partnership for any property, profit, or benefit obtained from the partnership business or from using partnership property, including a partnership opportunity taken for personal gain;
2. Refrain from dealing with the partnership on behalf of themselves or anyone else whose interests conflict with the partnership’s; and
3. Refrain from competing with the partnership in its business before the partnership dissolves.

The Duty of Care. A partner must avoid grossly negligent or reckless conduct, intentional misconduct, or knowingly breaking the law. An honest business mistake is usually not, by itself, a breach.

Good Faith and Fair Dealing. Partners must act honestly and fairly in carrying out their duties and exercising their rights, though conduct that also furthers a partner’s own interest is not, by itself, a breach.

Common fiduciary breaches include diverting business opportunities, self-dealing, and secretly competing with the partnership. Virginia courts have long held that a fiduciary, such as a partner or joint venturer, may not acquire an interest adverse to an associate in the subject of the relationship; if they do, a court may require them to convey a proper interest in the property or account for the profits.[ii]

Can a Partner Access the Partnership’s Books and Records?

Disputes often begin with a partner who feels shut out of the finances, and reviewing the books and records is often the first step in evaluating a claim. A partnership must let partners, and their agents and attorneys, inspect and copy its books and records during ordinary business hours; former partners have access to records from their time as partners. Partners are also entitled to information reasonably necessary to exercise their rights and duties without having to ask, and to other information on request unless the request is unreasonable or improper. Because disputes often begin with a partner who feels shut out of the finances, reviewing the books and records is often the first step in evaluating a claim.

Legal Options for Resolving a Partnership Dispute in Virginia

1. Negotiation and Alternative Dispute Resolution

The fastest and least expensive solution is often a negotiated restructuring, buyout, or wind-down. Many partnership agreements also require mediation or arbitration, so review your agreement before taking any other action.

2. A Lawsuit for Breach of Fiduciary Duty or Other Partner Claims

A partner may sue the partnership or another partner to enforce rights under the partnership agreement or the Act, including rights relating to fiduciary duties, books and records, a buyout, and dissolution, and may seek money damages, a court order, or a full review of the partnership’s finances. The partnership may also sue a partner for breaching the agreement or a duty owed to the partnership. Procedure matters, however: Virginia courts have historically held that a partner generally may not sue co-partners for damages arising from partnership transactions until the business has been wound up and the accounts settled.[iii]

3. A Partnership Accounting

An accounting is a court-supervised review that determines what each party owes and requires payment. When a partnership is wound up, creditors, including partners who lent money to the business, are paid first, and the remaining accounts are settled among the partners. Virginia law also permits an accounting against anyone in a position of trust who has received more than a fair share, and courts have applied that rule in partnership disputes.[iv]

4. Leaving the Partnership and Partner Buyouts

A partner may withdraw (the Act calls this “dissociation”) by giving the partnership notice. The consequences depend on the circumstances:

• In an “at-will” partnership, one not formed for a definite term or particular undertaking, a partner’s withdrawal automatically dissolves the partnership and requires that its business be wound up.
• If the partnership continues, it must buy out the departing partner’s interest, generally at what the partner would have received had the business been sold on the date of departure, using the higher of liquidation value or going-concern value without that partner, plus interest.
• If the withdrawal is wrongful, such as one that violates the partnership agreement, the resulting damages and other amounts owed may be deducted from the buyout price.

Strict deadlines apply. If no buyout agreement is reached within 120 days after a written demand, the partnership must pay its estimate of the price plus interest, less offsets. A partner who wants a court to set the price generally must sue within 120 days after an offer to pay, or within one year after the written demand if no payment or offer was made.

A partner may also be expelled in certain circumstances. For example, a court may expel a partner whose wrongful conduct adversely and materially affected the business, or who willfully or persistently committed a material breach of the partnership agreement or a fiduciary duty.[v]

5. Judicial Dissolution of a Partnership

When a partnership cannot continue, a partner may ask a court to dissolve it. Under Va. Code § 50-73.117(5), a court may dissolve a partnership if it finds that:

1. The partnership’s economic purpose is likely to be unreasonably frustrated;
2. Another partner’s conduct makes it not reasonably practicable to continue the business with that partner; or
3. It is otherwise not reasonably practicable to continue the business in accordance with the partnership agreement.

The Supreme Court of Virginia calls these the “economic purpose,” “partner conduct,” and “business operations” tests, and any one is sufficient. After dissolution, a court may, for good cause, supervise the winding up.[vi]

How Long Do You Have to File a Partnership Claim in Virginia?

In Virginia, a partner generally has five years to file an action to settle the partnership’s accounts under Va. Code § 8.01-246(A)(3). The Supreme Court of Virginia has held that this period generally begins to run not when the partnership dissolves, but when the winding up of its affairs is complete.[vii] Other deadlines, such as the buyout deadlines above, can be much shorter.

Conclusion

Partnership disputes are personal and financial, and they can put years of work and investment at risk. The right strategy depends on your partnership agreement, the conduct at issue, and your goals, and early advice can preserve claims, protect deadlines, and strengthen your negotiating position. If you are facing a business partner dispute, consult an experienced attorney before taking steps that could affect your rights.

Jacob DeRue represents business owners and partners in partnership disputes throughout Virginia and the District of Columbia. To discuss your situation, contact Jacob DeRue at Willcox & Savage, P.C. at (703) 506-6256, jderue@wilsav.com, or through the Contact Page.

The information in this blog post may not reflect the current law in your jurisdiction. No information in this blog post should be interpreted as legal advice, and this blog post is not intended to be a substitute for legal counsel.

About the Author

Jacob DeRue is an associate attorney in the Business and Commercial Litigation practice group at Willcox & Savage, P.C., in McLean, Virginia. He represents businesses, contractors, subcontractors, business owners, and individuals in commercial disputes across Virginia, the District of Columbia, and the Eastern and Western Districts of Virginia, including breach of contract and fiduciary duty claims, business torts, partnership and ownership disputes, non-compete enforcement, payment claims, and employment matters.

Willcox & Savage, P.C. represents individuals and corporations throughout the Mid-Atlantic region, including Alexandria, Annandale, Arlington County, Ashburn, Burke, Centreville, Chantilly, Clifton, District of Columbia, Dulles, Fairfax County, Falls Church, Great Falls, Herndon, Leesburg, Loudoun County, Manassas, Manassas Park, McLean, Middleburg, Montgomery County, Oakton, Prince George’s County, Prince William County, Reston, South Riding, Springfield, Sterling, Tysons Corner, Vienna, Winchester, and Woodbridge.

Contact the Author

Jacob C. DeRue
Willcox & Savage, P.C.
8201 Greensboro Drive, Suite 1001
McLean, Virginia 22102
Telephone: (703) 550-6256
Email: jderue@wilsav.com

---

[i] Va. Code Ann. §§ 50-73.81, 50-73.82; PGI, Inc. v. Rathe Prods., Inc., 265 Va. 334 (2003).

[ii] Va. Code Ann. § 50-73.102; Horne v. Holley, 167 Va. 234 (1936).

[iii] Va. Code Ann. § 50-73.103; Dulles Corner Props. II Ltd. P’ship v. Smith, 246 Va. 153 (1993).

[iv] Va. Code Ann. §§ 8.01-31, 50-73.123; Mertz v. Sullivan, 82 Va. App. 762 (2024).

[v] Va. Code Ann. §§ 50-73.79, 50-73.109, 50-73.112, 50-73.117; Mertz v. Sullivan, 82 Va. App. 762 (2024).

[vi] Va. Code Ann. §§ 50-73.117, 50-73.119; Russell Realty Assocs. v. Russell, 283 Va. 797 (2012).

[vii] Va. Code Ann. § 8.01-246; Roark v. Hicks, 234 Va. 470 (1987).