What is a joint venture?
In short it is;
‘a business undertaking by two or more persons engaged in a single defined project’.
It’s also important to know that a JV does not have to be carried out through an individual company or other legal body. Even if you have never signed any formal paperwork for example, just being in active business together with another person else can be considered as having formed a legal partnership, with all the rights and responsibilities that involves.
While entering into a joint venture with one or more individuals or entirely separate business can be successful, sadly disputes do arise. And with any increase in the potential value of your joint venture, the potential for disagreement grows even higher.
So if you already involved in a JV dispute, or worry that you could be, and you want to understand your options properly, call our specialists for a free initial chat today. We offer FREE initial legal advice – so there’s no reason for you to continue to worry and suffer in silence.
We represent clients in business disputes both locally in Wiltshire, Hampshire, Dorset and Somerset – and throughout England and Wales – from our offices in Salisbury, Andover, Fordingbridge and Amesbury. And the head of our business dispute team, David Patterson, is a member of the Commercial Litigation Association (CLA) – the UK’s only group of expert commercial litigation and mediation professionals.
Tangled up in a joint venture dispute? There is no need to suffer in silence – for FREE initial legal advice simply call us now on FREEPHONE 0800 1404544 or Salisbury (01722) 422300.
How common are joint-venture disputes?
Recent figures show that, for example, in 2012 more than one in five joint ventures ended in a formal dispute between the partners. The average value of disputes also rose more than three-fold, to £17.7m. The average duration for a joint venture dispute was 12.9 months — up 33% on the previous year.
Common causes of joint venture disputes
There are many reasons why disciplines occur within a JV – some of the most common causes include:
• The failure of partners in the joint venture to stick to the terms of the JV agreement or comply with their obligations under agreement
• A external change imposed upon the joint venture by a third party
• A conflict of interests between the partners
• Claims against partners in the joint venture
• A deadlock. This can can be one of the most damaging disputes. Simply failing to agree on a common action or decision, can cause paralysis – and enormous damage to any business venture. If you think you have got a serious deadlock problem – don’t hesitate in getting specialist legal advice as soon as possible
Dealing with a JV dispute
Whilst we would never encourage parties to turn an initial misunderstanding or disagreement into long-running court battle, it is very important to get legal advice at an early stage on your options if there are signs of a major dispute or deadlock with your joint-venture partner.
Knowing the options available to you can help resolve disagreements for the escalate. And if not, our business litigation lawyers are all strong advocates of mediation as an extremely useful way of resolving JV disagreements at an early stage.
Don’t suffer in silence – call us for Free Initial Phone Advice
With all sorts of both civil and business disputes, we find that far too many people worry unnecessarily and sometimes worsen the dispute by not speaking to a solicitor at an early stage. There simply may not be a problem, or there may be a simple and straightforward answer to the problem.
And we always offer FREE initial phone advice – so call us for locally on  422 300 or on FREEPHONE 0800 1404544.
Two simple steps to help avoid a JV dispute
Sometimes, however, disagreements between business partners in a JV are simply unavoidable.
However in our experience there are two very simple steps that a remarkable number of businesses fail to take prior to entering a joint venture which together significantly reduce the chance of a bust up.
- Due diligence. Before entering into any form of joint venture arrangement with others, it’s absolutely essential that you do their homework to find more about them. Far too many people enter into JVs without really knowing enough about their new business partner.
- No Paperwork. A missing or inadequate joint-venture agreement can cause huge problems. In their enthusiasm to work together, far too many people, especially entrepreneurial types, focus on the possibilities and rush into business without properly thinking through how they are going to work together. Whether your forming a partnership or a limited company, you need to make sure you have a comprehensive agreement drafted by specialist solicitor – which can take a number of forms including a partnership agreement, shareholders agreement or dedicated joint-venture agreement.
Click here for our page on joint-venture agreements – which includes a useful checklist on the kind of things you need to discuss with your JV partner and consider putting into your written agreement.