Term: Joint Venture

Two or more companies coming together to execute a project, with their relationship governed by a contract.

Although companies may work together on several projects over many years, they form discrete joint ventures for each such venture. In Proposal Land, each discrete venture would be for a contract or project.

Apparently there is significant ambiguity regarding under what conditions a Canadian court will treat a joint venture as something other than a partnership, which affects little things like liability. This may explain the leeriness of corporate lawyers regarding the use of “partnership” language in proposals.

Acronym? JV, pronounced by spelling it out.

2 Comments

  1. Jim Taylor

    The “leeriness” of lawyers derives from the legal terms of a “partnership” which, as I understand it, makes any one of the partners liable for the indiscretions of any or all other partners. The concept of behind a “limited liability corporation” is that one is only liable to the extent of one’s shares in that corporation — if you own 1%of the company, you can only be liable for 1% of its debts or penalties. (I write as an outside to the financial and corporate worlds.) But isn’t that distinction blurred by the inclusion of “jointly and severally” clauses?
    Jim T

    1. Isabel Gibson

      Jim – I am also outside this world but as I understand it, “joint & several” responsibility applies to partnerships, which makes them riskier than corporations on the face of it (for the participants) than a true JV – which isolates the risks of this project to this project.

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