Pitfalls in an International Joint Venture Contracts According to a
recent study: "Many organizations that are looking to establish global
Joint Venture contracts and agreements with foreign partners mistakenly
believe that the terms and conditions are about the same as domestic
contracts with in-country partners for the help www.jointwebventures.com.
Joint Venture contracts structured with in-country partners will not work
as templates for Global Joint Venture without significant modification."
The most important areas to protect through an international Joint
Venture agreement are security and confidentiality, legal compliance,
fees and payment terms, proprietary rights, auditing rights and dispute
resolution process. The greatest risks for International Joint
Venture come from some emerging countries that are early entrants into
Joint Venture, or those that have limited governmental support,
ineffective legal enforcement, immature infrastructure, limited or
nonexistent intellectual property protection or lack an understanding of
foreign laws. The most important areas to protect through an
international Joint Venture agreement are security and confidentiality,
legal compliance, fees and payment terms, proprietary rights, auditing
rights and dispute resolution process. The legal systems in some
countries might claim jurisdiction over any agreement regardless of which
system the agreement specifies, and that other legal systems might have
little respect for intellectual property rights. * How to
Draft Joint Venture Agreements and Contracts? Generally a Memorandum
of Understanding or a Letter of Intent is signed by the parties
highlighting the basis of the future joint venture agreement. A good
Joint Venture agreement is one which provides a comprehensive road map of
the duties and obligations of both the parties. It minimizes
complications when a dispute arises. However, many a time's people
neglect to pay attention while drafting an Joint Venture agreement.
A properly drafted Joint Venture Agreement saves a lot of problems later
on. Lawyers who understand the work culture and legal environment of both
the jurisdictions should be involved in drafting Joint Venture
Agreements. Before finalizing an Joint Venture Agreement, the terms
should be thoroughly discussed and negotiated to avoid any
misunderstanding at a later stage for the help www.joint-venture-
guide.com. Negotiations require an understanding of the cultural and
legal background of the parties. A Memorandum of Understanding and a
Joint Venture Agreement must be signed after consulting lawyers well
versed in international laws and multi-jurisdictional laws and
procedures. * Before signing an Joint Venture Agreement the
following must be properly addressed: * Applicable law.
* Force Majeure * Holding shares * Transfer of
shares * Board of Directors * General meeting. *
CEO/MD * Management Committee * Important decisions
with consent of partners * Dividend policy * Funding
* Access. * Change of control * Non-Compete
* Confidentiality * Indemnity * Assignment.
* Break of deadlock * Termination * Security and
confidentiality * Legal compliance * Fees and payment
terms * Proprietary rights * Auditing rights *
Events of Defaults and Addressing * Dispute Resolution
Mechanism * Time limits * Location of Arbitration
* Number of Arbitrators * Interim measures/Provisional
Remedies * Privacy Agreement * Non-compete Agreement
* Confidentiality Agreement * Rules Applicable *
Appeal & Enforcement * Be aware of local peculiarities *
Survival terms after the termination of the Joint Venture agreement.
The Joint Venture agreement should be subject to obtaining all necessary
governmental approvals and licenses within specified period.
Every Joint Venture agreement should be modified as applicable under
different circumstances. One brush should not paint all the painting.
International Joint Venture could be is a legal minefield and many
companies are not aware of the problems it causes. Related Articles -
Joint Ventures, Joint Partner, Venture, Joint Venture, Business.,
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