Renegotiating Contracts After a Business Partnership Dissolves

The recent Heinz/Kraft decision to separate is a reminder of how quickly terms you once relied on—like delivery schedules, payment timelines, or exclusivity rights—can become outdated or even unworkable.

For growth-stage businesses, this kind of disruption can threaten cash flow, production schedules, and customer relationships. That’s why it’s important to treat a partnership dissolution as a trigger to review and, if needed, renegotiate your contracts. Doing so gives you a chance to strengthen your terms and protect yourself from future uncertainty.

What a Dissolution Means for Your Contracts

In law, “dissolution” has a specific meaning: ending a legal entity or partnership. In business, it’s often used loosely to mean restructuring, splitting, or ending a joint venture.

When a major partnership dissolves, the agreements tied to it may no longer reflect reality. A supplier contract that worked when two companies operated together may create delays or higher costs if they now run separately. Payment terms may change, delivery windows may stretch, or one partner may no longer be able to honor its obligations.

These changes don’t always happen right away, but if you don’t revisit your contracts, you may end up locked into terms that no longer serve your business.

Clauses to Revisit or Add

When reviewing contracts after a merger dissolution or partnership breakup, pay close attention to:

• Payment terms. Can you shorten payment cycles to protect cash flow?
• Delivery schedules. Do your timelines still make sense given the new structure?
• Exclusivity or non-compete clauses. Are you unnecessarily tied to a partner who no longer adds value?
• Exit or renegotiation clauses. Do your contracts give you an escape route if your partner’s situation changes again?

Updating or renegotiating these areas now can prevent disputes later.

Questions SMBs Should Be Asking About Partnership Dissolutions

Before making changes, ask yourself and your team:

• Do our current contracts still make sense? If not, where are the weak spots?
• Should we renegotiate payment or delivery terms? If so, what is most urgent?
• What protections do we lack? Could adding exit or renegotiation clauses help us in the future?
• How would a dispute play out if the other party can’t meet its obligations—are we covered legally? Have we checked for dispute resolution clauses (mediation vs. litigation, governing law, venue, etc.)?

What to Do Next

1. Audit your contracts. Flag any that are tied to the dissolved partnership.
2. Prioritize renegotiations. Start with agreements most critical to your cash flow and operations.
3. Add protections. Work in clauses that give you flexibility if a partner changes or dissolves again.
4. If you want, you may use Rocket Lawyer’s Copilot to draft updated clauses, then connect with a Legal Pro to tailor them for your business.

By proactively reviewing and renegotiating contracts after a partnership ends, you protect your business today and set yourself up for more stability tomorrow.