- In most cases, it works to your advantage to have the joint venture agreement in writing. If you enter into the agreement with an oral contract, it can be very difficult to prove the contract in court. If a lawsuit arises, you may not be able to prove anything. Contracts that involve more than $500 or any other property should generally be in writing. If the agreement is expected to last for more than a year, you should also enter into a written contract.
Terms and Responsibilities
- When entering into a contractual joint venture agreement, it is also critical to outline the terms and responsibilities of each party. If the details are not spelled out, the parties may not understand exactly what they are expected to do. This helps avoid any confusion over roles and moves the joint venture forward.
Payment and Termination
- In the contractual agreement, you should also include information such as payment arrangements and how the joint venture may ultimately be terminated. For example, if money will be collected, it should show exactly the percentages that will go to each party. The agreement should also outline the conditions that must be met before the joint venture agreement will be terminated. If the joint venture has a specific time limit, include it in the contract.
- The contract should also include information about how disputes will be resolved. For example, you may want to include information about going through arbitration if a dispute comes up. If you decide in advance how disputes will be settled, you can potentially save a large amount of money on legal costs by avoiding a lawsuit. Without these provisions, the members of a joint venture may run into problems and have no way of resolving them.