Contract Glossary
Joint Venture Agreement
Definition
A joint venture agreement is a contract between two or more parties who agree to pool resources, share expertise, and collaborate on a specific project or business activity while remaining independent entities. Unlike a partnership, a joint venture is typically limited in scope and duration — it exists for a particular purpose and ends when that purpose is accomplished. The agreement defines each party's contributions, profit-sharing arrangements, management responsibilities, and exit terms.
In Practice
A real estate developer and a construction company form a joint venture to build a mixed-use development. The developer contributes the land and financing, while the construction company provides labor and project management. Their joint venture agreement specifies a 60/40 profit split, establishes a joint management committee, requires unanimous consent for expenditures over $50,000, and automatically dissolves upon sale of the last unit.
Example Clause
The Parties hereby form a joint venture (the 'Venture') for the sole purpose of developing, constructing, and selling the Property described in Exhibit A. Each Party's capital contribution, profit allocation, and management responsibilities shall be as set forth in Schedule 1. The Venture shall terminate upon the earlier of (a) completion and sale of all units, or (b) the fifth anniversary of this Agreement.
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Frequently asked questions about joint venture agreement
A joint venture is formed for a specific project or limited purpose and typically ends when that objective is met. A partnership is an ongoing business relationship with broader scope. Joint venture parties remain independent entities, while partners share general liability for all partnership activities. A joint venture agreement usually has a defined end date or completion trigger, while partnerships continue indefinitely unless dissolved.
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Create your contractThis content is for informational purposes only and does not constitute legal advice. For contracts with significant financial or legal implications, review by a qualified attorney is recommended.