Can I sue a partner in my company if they agreed to invest, but then pull out of the deal?

UPDATED: Oct 1, 2022

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Can I sue a partner in my company if they agreed to invest, but then pull out of the deal?


My 2 former partners and I set up an LLC in Idaho, and one of the partners
agreed to invest 400,000 we have a signed operating agreement stating so. They
have now simply pulled out of the company for purely selfish reasons, and I need
to know if there are grounds for a lawsuit.

Truly appreciate your help.

Andreas Jaeger

Asked on October 11, 2017 under Business Law, Idaho


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

You write that you have a "signed operating agreement stating" that the partner will invest $400,000. An operating agreement can function like a contract, and contracts are enforceable in court: you may therefore be able to sue your partner based on "breach of contract" (violating the terms of the contract) to force them to invest. Much depends on the exact terms of the agreement, since contracts are enforced as per their plain terms; bring the agreement to an attorney to review with you; the lawyer can confirm whether you can sue on this basis and, if so, can initiate the lawsuit for you.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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