Joint Venture
5. Regulation
Authors: Staff Legal Eagle
Firm / Chambers:
Last updated: 10 Aug 2015
- Despite the fact that joint ventures are common in Australia there is still no specific regulatory framework applying to these legal relationships. The legal rules remain open for debate and it can be difficult to determine the rights and responsibilities of joint venture participants. There is no settled definition of a joint venture under common law (judge made law).
- Although there is no discrete body of regulation for joint ventures the legal relationship between the joint venture participants is governed strictly by the rules of contract law.
- Key terms and conditions of a joint venture are usually set out in a formal written agreement. However it is important to understand that under the rules of contract law a joint venture can be established through:
- conduct;
- verbal communication; or
- by written agreement.
- Some joint ventures are incorporated. They key documents for an incorporated joint venture are a shareholders agreement and the company constitution.
- The courts consider the appropriate rights and obligations that flow from a joint venture relationship on an ongoing basis. This is generally in response to the cases that come before them. The common law rules can therefore change over time as the courts identify and clarify the rights and obligations involved.
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