Joint Venture
8. Your Rights and Obligations
Authors: Staff Legal Eagle
Firm / Chambers:
Last updated: 10 Aug 2015
- Your rights and obligations with respect to other participants in the joint venture are defined by the scope of your agreement.
- The terms of a joint venture agreement can create a fiduciary relationship between you and other joint venture participants. A ‘fiduciary relationship’ is a term used to describe an obligation to act in the best interests of another person or business. In a joint venture context this relationship would be reciprocal.
- Not every joint venture agreement will create a fiduciary relationship. It will depend on:
- the terms and conditions of your specific agreement;
- the nature of the relationship between participants;
- the level of trust, confidence and reliance underlying the relationship; and
- any additional relevant considerations.
- If you are found to be in a fiduciary relationship there are certain rights and obligations that flow from this. The extent of your fiduciary obligations towards other participants depends on the nature of your venture and the terms and conditions of the agreement. For example as a fiduciary in a joint venture relationship you may be required to:
- refrain from dealing with assets of the joint venture without the informed consent of all other participants; or
- refrain from obtaining an individual advantage for yourself or your own business that comes through your joint venture activities without the informed consent of all other participants.
- In addition to any fiduciary duties you will also be held to the terms and conditions of the joint venture agreement. If a party breaches a term or condition of the joint venture agreement or becomes insolvent the other joint venture participants will have remedies under contract law. For more information on contract law remedies see our topic on Contract Law.
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