Business Disputes - Joint Venture

Joint ventures are created by a contract between two parties and are set up for limited periods of time or for a limited purpose or both.

Defining the Relationship of a Joint Venture

When a contract is created, the document will often say that the relationship created is a joint venture and not a partnership. The reason for this distinction being made is that partners owe fiduciary duties to each other. A fiduciary has a duty of undivided loyalty to the other contracting party and to put the interests of the other contracting party ahead of their own. The goal in defining the relationship of a joint venture and not a partnership is to avoid fiduciary duties. However, it should be noted that joint venturers could still owe each other fiduciary duties depending on the circumstances. While partners are automatically fiduciaries of each other, joint venturers can also have fiduciary duties imposed on them.