A joint venture agreement is used between two businesses temporarily working on a project together. This type of agreement outlines the partners’ expectations and protects the partners’ individual businesses, as well as the working relationship between the parties.
Joint ventures do not create a separate business entity and are generally joined into when parties are engaged in a joint project. They are limited in time and scope, and the parties involved in the joint venture do not always do business together. These ventures oftentimes have an expiration date that allows the parties discretion in renewing or refusing to renew the agreement.
Joint venture agreements are helpful in that the different parties to a joint venture project put forth and have different skills, assets, and can supply these in different quantities. Further, with joint ventures, the parties work together to the extent agreed upon in the agreement so it is important to have a clear and concise written agreement describing the agreed upon term of expiration and other terms and conditions.