Termination of Joint Venture Agreement

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TERMINATION CLAUSE UNDER JOINT VENTURE AGREEMENT: AN ANALYSIS The dissolution and termination of a joint venture are governed by partnership law relating to dissolution and termination. In areas where the Uniform Partnership Act (Act) is applicable, dissolution and termination of a joint venture is governed by relevant provisions contained in Act. However if there is any written agreement made by joint venture parties to the contrary, then such written agreement would determine a joint venture’s dissolution. A joint venture can be terminated in the following situations: * if there is an agreement between joint venture parties to terminate a joint venture; * if it is apparent that a joint venture is not profitable * on death of a joint venture member if service offered by such joint venture member cannot be substituted by another person. * A joint venture can also be dissolved by judicial dissolution. Under the Act, a court can grant a judicial dissolution on the following grounds: * if a joint venture member is shown to be of unsound mind; * if there is disharmony and dissension among parties to a joint venture; * if a joint venture member becomes in any other way incapable of performing his/her part of a joint venture contract; * if a joint venture member has been guilty of any conduct that may in turn be prejudicial to a joint venture business; * if a joint venture member willfully or persistently commits a breach of a joint venture agreement; * if a joint venture business can only be carried on at a loss; and * on other circumstances that render a dissolution equitable. However, courts have observed that judicial dissolution of a joint venture corporation having two 50% stockholders is discretionary and it is to be decided according to the circumstances arising in the particular case. Generally, a joint venture
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