Who can use this Joint Venture Agreement?
Any two companies or organisations that want to join forces to bid for and carry out engineering or construction projects together should find this joint venture agreement for construction template useful.
For a shorter, simpler bidding agreement which might later become a full-scale joint venture, see our document B138
What is this agreement for?
This Joint Venture Agreement for construction sets out the basis on which the joint venture parties will cooperate. It covers the general duties, the management structure, the principles for joint bidding the tenders, sharing work under contracts that are rewarded to the joint venture, as well financial arrangements and liability issues.
This is an unincorporated joint venture so that each JV partner receives and becomes liable for tax on its share of profits.
What are the main issues?
Formation and name. The parties establish the unincorporated joint venture and set out the general the broad objectives. The agreement will also deal with the duration of the JV.
Duties. The JV partners will agree to accept responsibility for their own share of the work, although with both of them signing up as main contractor on in the contract awarded, they will be jointly and severally liable to the employer if anything goes wrong. But they will then share liability between them as set out in JV agreement.
Tenders and contracts. There will be a procedure for bringing tenders to the management board and for contract awards and then the running of those contracts. The resources to be brought to each contract will be decided by the management board. Also, a project director normally be appointed to run each joint venture project.
.Management. There will be a management board with representatives from each party who will evaluate projects, decide on tenders and contracts as well as meeting regularly to review progress and deal with issues. There will usually be equal voting rights for all participants at management meetings. The chairman may or may not have a casting vote.
Financial. The need for working capital and the way in which payments from clients will be handled and distributed will be laid down. Regular management accounts will be prepared.
What detailed terms does the contract contain?
The main points cover:
There will be schedules detailing the authority of the project director, contributions in kind to the joint venture made by the parties and initial working capital requirements.
You need this document if you represent a limited company wanting to enter into a joint venture with another company in order to bid for projects jointly.
For more information see our Explanatory Notes which you will receive when you download the document from our website.
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When I download the document, can I change it and/or use it more than once?
Yes, all ContractStore’s templates are in MS Word and you can use the contract on more than one project. For more information, watch the video on this page of our website or see our FAQs
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Contract Author – Giles Dixon
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