Joint ventures : a legal notion or a fluid concept?

Abstract

The joint venture is a popular business strategy; the propensity to set up joint ventures has increased considerably over the years. Businessmen often term their business projects as being joint ventures because they have a clear intention of embarking on a collaborative project. From a legal viewpoint, however, the joint venture concept is still somewhat nebulous. A 'joint venture' is not a legal term of art and there is no universally accepted legal definition as to what constitutes a joint venture. The joint venture concept which has emerged from commercial usage and the freedom of contract has been recognized in numerous court judgements which have attempted to define its constituent elements. This thesis will analyse the joint venture in the realms of jurisprudence, usages of trade and legislation in order to examine whether there exists an emerging body of universal legal requisites as to what constitutes a joint venture and whether this could in turn influence the eventual development of a legal institute (at domestic and international level) that would add legal certainty to a vast category of legal transactions that form an integral part of commercial life. The various court judgments interpreting the joint venture concept and the standardized model joint venture agreements that have emerged from commercial usage may be deemed to be circumstantial evidence pointing towards a more formal recognition of the joint venture as a legal concept. To date the joint venture has not reached the legal status of a clearly defined legal institute. It may be, however, that while a clearly defined legal institute would add legal certainty it would detract from the versatility of this legal form of collaboration which is deemed to be its main appealing feature.