Also known as: joint adventures · joint adventurer · joint adventurers · joint venture
Written by attorneys — see sources below.
A business arrangement in which two or more parties combine their resources and efforts to pursue a specific commercial project for profit. The participants share control, risks, and returns while retaining separate legal identities outside the venture.
Jacobs Shipping formed a joint adventure with Jennings Forge to develop a new port facility. After incorporation, Jacobs Shipping exercised its statutory power to serve as manager of the joint adventure and directed daily operations on the project site.
Jackson Mutual appointed its vice president to serve as an officer of a joint adventure formed with Jung BioTech. The corporation purchased liability insurance covering the officer for claims arising from that service in the joint adventure.
Jeanette Jensen and Jason Jung entered a joint adventure to renovate and operate a commercial building. When the lease came up for renewal, Jason secretly obtained an extension for himself alone. The court held Jason breached his duty of loyalty to the joint adventure.
On April 10, 1902, Louisa M. Gerry leased the Hotel Bristol at the northwest corner of Forty-second Street and Fifth Avenue in New York City to Walter J. Salmon for a twenty-year term beginning May 1, 1902, and ending April 30, 1922. The lease required Salmon to convert the building into shops and offices at a cost of two hundred thousand dollars. All alterations became accretions to the land. While negotiating the lease with Gerry, Salmon entered into a joint venture agreement with Morton H. Meinhard. Meinhard agreed to pay half the funds needed to reconstruct, alter, manage, and operate the property. Salmon received sole power to manage, lease, underlet, and operate the building. Net profits were to be divided forty percent to Meinhard for the first five years and fifty percent thereafter. Losses were to be shared equally. The venture operated the reconstructed property at a loss in its early years and later at a profit. It generated substantial returns for both parties until the lease approached its end. In late 1921, Elbridge T. Gerry, who had acquired the reversion and owned adjoining lots on Fifth Avenue and Forty-second Street, approached Salmon alone after failing to interest other parties in a larger development plan. On January 25, 1922, Gerry executed a new lease to Midpoint Realty Company, a corporation owned and controlled by Salmon. The new lease covered the entire tract for twenty years with successive renewal options extending up to eighty years. It required demolition of existing buildings after seven years and construction of a new three-million-dollar building. Annual rents ranged from three hundred fifty thousand to four hundred seventy-five thousand dollars. Salmon personally guaranteed performance until the new building was completed and paid for. Salmon did not inform Meinhard of the negotiations or the new lease until February 1922. Upon learning of it, Meinhard demanded that the lease be held in trust for the venture and offered to share the guaranty obligations. Salmon refused, prompting this suit. A referee awarded Meinhard a twenty-five percent interest in the lease. On cross-appeals the Appellate Division modified the judgment to enlarge the interest to one-half of the entire lease. The defendants appealed. Separately, in 1917 Meinhard had assigned his entire interest in the joint venture agreement to his wife. She reassigned it to him before suit was commenced. Salmon continued to deal with Meinhard on the basis that the enterprise remained subsisting.
View caseJulia Jensen and Javier Jimenez lived together and pooled earnings to purchase several properties under an oral agreement to share ownership. Upon separation, Julia claimed an interest in the assets acquired through their joint adventure.
In October 1964, plaintiff and defendant entered into an oral agreement. While the parties lived together, they would combine their efforts and earnings. They would share equally any and all property accumulated as a result of their efforts, whether individual or combined. They further agreed to hold themselves out to the general public as husband and wife. Plaintiff would render her services as a companion, homemaker, housekeeper, and cook to defendant. Shortly thereafter, plaintiff agreed to give up her lucrative career as an entertainer and singer. She did so to devote her full time to defendant as a companion, homemaker, housekeeper, and cook. In return, defendant agreed to provide for all of plaintiff's financial support and needs for the rest of her life. The parties lived together from October 1964 through May 1970. During this period, as a result of their efforts and earnings, they acquired in defendant's name substantial real and personal property. This included motion picture rights worth over $1 million. In May 1970, defendant compelled plaintiff to leave his household. He continued to support plaintiff until November 1971 but thereafter refused to provide further support. Plaintiff brought this action asserting two causes of action. The first, for declaratory relief, asked the court to determine her contract and property rights. The second sought to impose a constructive trust upon one half of the property acquired during the course of the relationship. Defendant answered the complaint after an unsuccessful demurrer. Following extensive discovery and pretrial proceedings, the case came to trial. When the case was called for trial, plaintiff sought leave to file an amended complaint. The trial court treated defendant's motion to dismiss as one for judgment on the pleadings. This was augmented by a stipulation that defendant's marriage to Betty Marvin did not terminate until the filing of a final decree of divorce in January 1967. The court granted the motion and entered judgment for defendant. Plaintiff moved to set aside the judgment. She asked leave to amend her complaint to allege that she and defendant reaffirmed their agreement after the divorce became final. The trial court denied the motion. Plaintiff appealed from the judgment.
View caseJasmine Jordan and James Johnson formed a joint adventure to build a home and raise a family while sharing all income and expenses. After the relationship ended, Jasmine sued to enforce the agreement allocating property acquired during the venture.
In June 1960, while students at Grinnell College in Iowa, Victoria Hewitt became pregnant by Robert Hewitt. Robert told Victoria that they were husband and wife and would live as such without a formal ceremony, and that he would share his life, future, earnings, and property with her. The parties announced to their parents that they were married and held themselves out as husband and wife thereafter. Victoria devoted her efforts to Robert's professional education in pedodontia, obtaining financial assistance from her parents, and assisted in his career by placing her payroll checks into a common fund. Three children were born to the parties during their relationship, which lasted until 1975. By that time, Robert earned over $80,000 a year and had accumulated substantial property, some held jointly and some separately. Victoria initially filed a complaint for divorce, but at a hearing on Robert's motion to dismiss, she admitted that no marriage ceremony had taken place and that the parties had never obtained a marriage license. The trial court dismissed the complaint, finding no ceremonial or common law marriage existed, and directed Victoria to make her complaint more definite regarding the property. Victoria then filed an amended complaint alleging an express oral contract to share property, an implied contract from the parties' conduct, a constructive trust based on fraudulent assurances, and unjust enrichment from her detrimental reliance. The trial court dismissed the amended complaint, finding that Illinois law and public policy require such claims to be based on a valid marriage. The appellate court reversed, and the Supreme Court of Illinois granted leave to appeal.
View caseTwo companies formed a joint adventure to import goods and later faced allegations that mail and wire fraud occurred during the venture's operations. The court examined whether the joint adventure activities supplied the required pattern of racketeering.
In 1979, petitioner Sedima, a Belgian corporation, entered into a joint venture with respondent Imrex Co. to provide electronic components to a Belgian firm. The buyer was to order parts through Sedima. Imrex was to obtain the parts in this country and ship them to Europe. The agreement called for Sedima and Imrex to split the net proceeds. Imrex filled roughly $8 million in orders placed with it through Sedima. Sedima became convinced that Imrex was presenting inflated bills, cheating Sedima out of a portion of its proceeds by collecting for nonexistent expenses. In 1982, Sedima filed this action in the Federal District Court for the Eastern District of New York. The complaint set out common-law claims of unjust enrichment, conversion, and breach of contract, fiduciary duty, and a constructive trust. In addition, it asserted RICO claims under § 1964(c) against Imrex and two of its officers. Two counts alleged violations of § 1962(c), based on predicate acts of mail and wire fraud. A third count alleged a conspiracy to violate § 1962(c). Claiming injury of at least $175,000, the amount of the alleged overbilling, Sedima sought treble damages and attorney's fees. The District Court held that for an injury to be "by reason of a violation of section 1962," as required by § 1964(c), it must be somehow different in kind from the direct injury resulting from the predicate acts of racketeering activity. It found no allegation here of any injury apart from that which would result directly from the alleged predicate acts of mail fraud and wire fraud. Accordingly, it dismissed the RICO counts for failure to state a claim. A divided panel of the Court of Appeals for the Second Circuit affirmed. After a lengthy review of the legislative history, the Court of Appeals held that Sedima's complaint was defective in two ways. It failed to allege an injury "by reason of a violation of section 1962." It also failed to allege that the defendants had already been criminally convicted of the predicate acts of mail and wire fraud, or of a RICO violation. In light of the variety of approaches taken by the lower courts and the importance of the issues, the Supreme Court granted certiorari.
View caseA joint adventure is typically formed for a single project or limited purpose rather than an ongoing business. Participants owe fiduciary duties similar to partners but the relationship ends upon completion of the specific undertaking.
Yes. Corporate statutes expressly authorize a corporation to serve as a promoter, partner, member, associate, or manager of a joint adventure. This power allows the corporation to engage in the venture after formation.
The corporation may purchase insurance to protect an officer who serves at its request in a joint adventure. The policy covers liability asserted against the individual in that capacity regardless of whether the corporation itself could indemnify the officer.
Courts have sometimes analyzed property claims arising from unmarried couples living together under joint adventure or partnership principles when the parties pooled efforts and earnings pursuant to an agreement.