Introduction
Everyone is aware of the fact that conducting business equipped with all the technologies and machinery is a challenging task as every company has their field of specialization in different sectors. Therefore, in order to overcome any activity which requires a specific performance for conducting a task, two or more than two business combines to accomplish a particular task in a defined manner which is known as Joint Venture. Thus, through the help of this article, we will inform the reader about the meaning, importance, and techniques of drafting the Joint Venture Agreement.
What is the meaning of a Joint Venture Agreement?
The exact meaning or definition of a Joint Venture Agreement is not defined anywhere, but its importance can be formulated from its own term, which defines its nature. In other words, Joint Venture Agreement is an Agreement formulated between two or more parties to conduct or perform any specific task by using or allowing to utilize its resources in a particular or defined manner. Generally, this Agreement is used by business organizations to ascertain rights and obligations between them.
What is the importance of having a Joint Venture Agreement?
The Joint Venture Agreements are considered as one of the most substantial pieces of evidence for terms and obligations as set out on the contracting parties. Despite this there is various importance for executing Joint Venture Agreement which is enumerated below with the help of our Commercial Contract Lawyer:
- It is a written Agreement between the two or more business organizations.
- The use of any Trademark, Patents, Rights and Resources of any party is limited to a particular extent.
- Provides ease in terms of setting out roles and responsibilities for each other.
- Liabilities of contracting parties are defined in a specified manner so that no ambiguity can arise at a later stage.
- Limits roles and responsibilities of all the contracting parties so no dispute regarding working and nature of work can be raised.
- Protects the contracting parties in case any of the contracting commit’s violation of the terms as set out under the Joint Venture Agreement.
- Protection to tangible and intangible assets are being provided through this agreement.
- Protection of Confidential Information is provided between the parties.
- Protection against the action of any third party is provided.
- Provisions concerning the Auditing of Accounts and Distribution of Profits are clear.
What are the Techniques for Drafting Joint Venture Agreement?
Our Commercial Contract Lawyer states the techniques which are useful in the drafting of Joint Venture Agreement. For better understanding, the said techniques with the relevant clause that is to be included in the Joint Venture Agreement are mentioned hereinbelow:
TECHNIQUES
- KNOW REQUIREMENTS OF YOUR CLIENT
For drafting the Joint Venture Agreement, it is important to understand your client\’s requirements so that a better agreement can be formulated.
- UNDERSTAND BUSINESS MODULE
For drafting Joint Venture Agreement, it is essential for the drafters to understand the business module of the Client because we all know that this agreement cannot be the same in nature as other agreements and depends upon the module of business.
- COLLECT ALL THE INFORMATION FROM THE CLIENT
For drafting Joint Venture Agreement, it is important to collect all the information and other related documents from the client so that a good agreement can be drafted that will match the client\’s expectations.
- AVOID USING OLD OR PRE-EXISTING DRAFTS
Generally, most of the draftsmen tries to rely upon old or pre existing drafts for the Joint Venture, but they may avoid doing so as every facts and circumstances of each case are different from the other, and by doing so, you may lend your client in trouble because in most of the cases there are chances that provisions of the old or previous drafts are left behind which may cause heavy loses to the client.
- REASONABLE FORESEEABILITY
The drafting technicians must possess the ability and skills of reasonable foreseeability so that any future disputes arising from the agreement may be avoided in advance.
- INCLUSIONS OF ALL THE RELEVANT PROVISIONS
While drafting Joint Venture Agreement, the drafters shall include all the related provisions relating to Penalties, Termination, Indemnity, Confidentiality, Entire Understanding, Notices, Waiver, and Governing Law for the Dispute.
CLAUSES FOR JOINT VENTURE AGREEMENT
- DETAILS OF THE CONTRACTING PARTIES
The Details of the Contracting parties shall be specified in this clause which will, later on, define the role of each contracting parties.
- DEFINITIONS
This clause will define the definition of the terms used under the Joint Venture Agreement, which will help in resolving the ambiguity at the later stage.
- SCOPE OF UNDERSTANDING
This clause will define the nature and scope of understanding made between the contracting parties. Moreover, this clause is essential to understand the relationship between the contracting parties.
- OBLIGATIONS OF THE CONTRACTING PARTIES
This clause will define the different obligations for each contracting party. The obligations about each party will depend on the terms as agreed between them.
- JOINT OBLIGATIONS OF THE PARTIES
This clause will create a joint obligations between the contracting parties. It is pertinent to mention here that this clause shall contain the balance obligations so that no dispute can arise at a later stage by either party.
- MANAGEMENT OF THE JOINT VENTURE
This clause will define the management of the Joint Venture which will specify that how the regulations of the relation will be conducted between the contracting parties.
- COMPENSATION AND TERMS OF PAYMENT
This clause will define the payment terms as agreed between the contracting parties in relation to the profit distribution. Moreover, a separate clause in relation to the compensation must be mentioned in the agreement so that an adequate amount may be awarded if any of the contracting parties breaches the terms and conditions of the contract.
- ACCOUNTS AND RECORD KEEPING
This clause will provide the rights to the contracting parties about keeping check upon the accounts and books of the contracting parties. Moreover, this clause will show the level of trust between the parties, and they may operate by opening a joint bank account based upon the parties\’ relationship.
- GOVERNING LAW
This clause will define the jurisdiction of the law governing dispute and other methods related to Dispute Resolution.
- INDEMNITY
This clause will provide indemnity to the contracting parties in case of breach or loss due to any third party\’s actions.
- ENTIRE UNDERSTANDING
This clause will signify that all the parties to the agreement has an entire understanding and will not adhere to any other document executed between them before the execution of the present Joint Venture Agreement.
- SEVERABILITY CLAUSE
This clause will provide if any of the terms existing in the agreement become void or ineffective due to any reasons, then other terms of the agreement will remain valid.
HOW CAN WE ASSIST YOU?
Nour Attorneys Law Firm tends to provide you with one of the best Legal Document Drafting Services. Our team of Commercial Contracts lawyers possesses expertise in drafting and reviewing Joint Venture Agreements. Moreover, our law firm has expertise in drafting Legal Contracts and Documents in such a manner that the interest of our client is protected for a longer period of time.
If you want to have one of the best Joint Venture Agreements, then feel free to contact us and avail the benefits of our Legal Documents Drafting Services which are being provided by our team of highly qualified and experienced Commercial Contract Lawyers
