Joint Venture Agreements:

The “joint venture” is a relationship between two or more parties, who agree to undertake some enterprise for a profit, but where their individual identity as separate parties remains. In this regard, it is distinguished from the “partnership” where partners take a share in the profits of the common enterprise. In the joint venture, each party will bring to the arrangement their own specific skills, talents, resources, abilities and facilities. The joint venture is a common concept found in property and environmental law as it is often determined that this kind of commercial arrangement is appropriate for property developers.

The joint venture agreement is determined according to the real characteristics of a contractual relationship between the parties; just because something is called a joint venture does not mean that a court will find it to be a joint venture. Conversely, just because something is called a partnership does not mean that any future court will hold that is it in fact a partnership. For more information about partnerships, see our section titled “Partnership Agreement” in our “Business and Commercial Law” title. The joint venture agreement can sometimes be referred by other terms and references, such as:

• Collaboration agreement or collaboration contact;
• Co-operation agreement or co-operation contract;
• Alliance agreement or alliance contract; and
• Limited partnership agreement or limited partnership contract.

Where an individual or a business wishes to enter into some kind of relationship with another individual or business for the purpose of developing land, a joint venture agreement solicitor will be able to take instruction as to the needs and objectives of the client before providing legal advice on the type of agreement that may be best in the circumstances. The legal advice may suggest that the joint venture is the more appropriate vehicle through which to pursue a development project. On the other hand, the legal advice may suggest that a partnership or some other business arrangement may better meet the needs of the client.

Drafting the joint venture agreement will also be undertaken under instruction after the legal advice has been provided and the client decides what path he wishes to pursue. Drafting the joint venture agreement is an important and delicate task, especially given that the definitive criteria of the joint venture must be met else a future court determines that the relationship between the parties is something other than what the client wanted. The joint venture agreement lawyer will need to assess the nature of the proposed development project, the assets that the parties are bringing to the agreement, and then prepare a draft joint venture agreement on this basis.

In the event that a joint venture agreement dispute arises between the parties, the joint venture litigation solicitor will likewise need to assess the facts of the case against the contract document (or documents). This will be essential before potential defences are considered and any cross-claims against the other side can be suggested. Litigation in the joint venture practice area can be costly and can drag on for a very long time. Litigation is sometimes the only solution to a dispute between purported joint venturers, however it is always advisable to seek a negotiated settlement of any dispute before a matter is taken to court.

If you would wish to discuss any of the matters outlined above in further detail, you can contact our firm by telephone on (02) 9233 4048 or send an email to info@navado.com.au to book a meeting with one of our solicitors. 

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