A joint venture is very similar to a partnership. In fact, some States treat joint ventures the same as partnerships with regard to partnership statutes such as the Uniform Partnership Act. The main difference between a partnership and a joint venture is that a joint venture usually relates to the pursuit of a single transaction or enterprise even though this may require several years to accomplish. A partnership is generally a continuing or ongoing business or activity. Most Courts hold that joint ventures are subject to the same principles of law as partnerships. The duties owed by joint venturers to each are the same as those that partners owe to each other. For example, partners have a duty of loyalty to one another, and joint venturers would also have the same duty. If a joint venture is entered into to acquire and develop a certain tract of land, but some of the venturers secretly purchase and develop land in their own names to compete with the joint venture, the other joint venturers may be liable for damages for the breach of this duty of loyalty.
General Form of Joint-Venture Agreement Agreement made on the (date), between (Name of Party Alpha) of (street address, city, state, zip code), referred to herein as Alpha, and (Name of Party Beta), of (street address, city, state, zip code), referred to herein as Beta. Whereas, the parties desire to conduct a business operation together; and Whereas, each party is willing to invest money to finance the conduct of the operation; and Whereas, Alpha and Beta have agreed that the most desirable form of business for conducting the operation is a Joint Venture; Now, therefore, for and in consideration of the mutual covenants contained in this Agreement, and other good and valuable consideration, the parties agree as follows: 1. Scope and Description By this Agreement, the parties hereby create a Joint Venture to (description of business) for profit. The Joint Venture shall be conducted under the name of (name of Joint Venture) from a place of business at (street address, city, state, zip code). 2. Contributions Alpha is to contribute $__________________ to the Joint Venture. Beta is to contribute personal property described as follows: (describe personal property), having an agreed value of $__________________, and his time and skill as a (occupation) for the duration of the Joint Venture, to insure its success. Contributions of money and property shall be made on or before (date). Failure of either party to complete the contribution on a timely basis shall result in termination of this Agreement. 3. Conduct of Venture Beta shall be responsible for management of the Joint Venture and shall devote all his time to such management. However, he shall be responsive to the policies established and agreed on by both parties. Beta shall have the authority, without the need to consult Alpha, to (describe extent of authority). Such authority may be increased or decreased from time to time on mutual agreement of the parties. Beta shall be liable to the Joint Venture for any losses or liabilities incurred by his negligent conduct or by willful acts that are detrimental to the venture if he knew or should have known that such acts would be detrimental. 4. Title to Property All legal title to property acquired by the Joint Venture, whether real or personal, shall be taken in the name of Beta, as trustee for the parties, and shall be held for their interest. The interest of each party in such property shall be proportionate to his or her share of the profits of the venture. 5. Division of Profits The net profits earned by the Joint Venture, calculated at the end of each fiscal year, shall be divided among the parties as follows: Alpha shall receive ______% and Beta shall receive ______%. The parties shall receive no other remuneration from the Joint Venture. The net profits will be calculated by first deducting all operating expenses from gross income of the Joint Venture. 6. Apportionment of Losses The parties shall bear any net loss sustained by the venture in any fiscal year as follows: Alpha shall bear ______% of such loss, and Beta shall bear ______% of such loss. Any assessment against a party for a loss shall be payable to the Joint Venture not later than (number) days after the close of the fiscal year. 7. Records and Accounting A. Beta shall maintain or cause to be maintained a complete set of records, statements, and accounts concerning the total operation of the Joint Venture, in which books shall be entered, fully and accurately, each transaction pertaining to the Venture. All the books will be open at all times for inspection and examination by Alpha or his agent. B. The fiscal year of the Joint Venture shall commence on (date) and close on (date) of each year of operation. All accounting based on fiscal year figures shall be completed within (number) days after the close of the fiscal year. 8. Insurance and Surety Bonds A. The Joint Venture shall obtain insurance to cover the following items and types of losses: (describe items and types of losses to be insured against). The premiums shall be recognized business expenses of the Joint Venture. B. The parties shall each post bond in the amount of $____________ for the protection of assets, and the premiums shall be recognized business expenses of the Joint Venture. 9. A
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