48+ Sample Joint Agreement Templates

What is a Joint Agreement?

A joint contract and agreement is a business document that outlines the agreement between two or more parties about their business venture. This highlights the terms and conditions each party has agreed to achieve each of their goals. The joint venture agreement also states what both parties will give to the joint venture, the management of tasks, and terms. A joint agreement is one of the things business partners consider once dealing with joint venture deals. With this, they will have a clear understanding and vision of what goes on the business transaction. This will also give the parties involved protection once the other party failed to do their end of the bargain. So, if you want to expand your business by creating a larger market, or developing new products with the help from well-known and established companies, drafting a joining agreement is necessary.

According to a report from Statista, Skechers has 354 joint venture stores worldwide in the year 2019.

Statista also stated that the United States has 8 percent of joint ventures of companies from the Netherlands in 2016.

In another report from Statista, the United States has a total of 133, 004 joint venture passenger car production in 2012.

The Essential Elements of a Joint Agreement

Joint agreements are used when two or more parties agreed to come into terms for a business project or to accomplish common goals and objectives. This type of business contract contains essential information that presents the agreement of the parties involved. To understand the essential elements that will compose a joint agreement, here are some specifications.

The Parties Involved. The first essential element that a joint agreement should have is the full information of the parties involved. Stating the people or organization getting into a partnership is necessary to make the joint contract valid. So, it is imperative to put their details and descriptions.The Goals and Objectives. Another essential component in a joint agreement is the goals and objectives. This refers to the things both parties want to accomplish once the business transaction ends. Basically, this is the main reason why the joint agreement is created in the first place.The Contributions. The next element for a joint agreement is the contributions of the parties involved. This can be cash, assets, resources, and the likes. Contributions are necessary because this is to ensure that each party puts value to the joint agreement.The Roles and Responsibilities. Another important element that should be present in a joint agreement is the roles and responsibilities of each party. This refers to the function of the parties involved to make the joint venture successful. So, list down the parties’ individual tasks in the joint agreement.The Confidentiality Agreement. In every business contract, it is imperative to have a confidentiality agreement. So, for the joint agreement, this should also be present. Layout in the agreement the grounds of sharing information with outside parties.

How to Write a Formal Joint Agreement

A joint agreement is an important business document that outlines the agreement between two or more parties to accomplish specific goals and objectives. Writing a joint agreement is one of the vital steps in engaging in a joint venture. That is why it is essential to make sure that the deal contains accurate and well-defined information. A joint agreement is not that difficult to prepare, but it surely takes time and effort. Hence, you can always make use of a ready-made joint agreement template that you can find online. This article has some professionally written sample templates that you can customize and download anytime. Nevertheless, below are tips on how to prepare a formal joint agreement for your joint business venture. Here’s how.

Step 1: Write an Introduction

Start drafting a formal joint agreement with an introduction. This section of the deal is necessary because it provides the readers with a clear background of the deal. The introductory part of the joint agreement contains a series of “whereas” statements. This section should also introduce people or companies involved in the contract. For instance, this section may state, “This Joint Agreement made and entered into as of this, insert the date of the agreement, by and between, insert parties involved.” It is also essential to include descriptions of each party. Once you have identified the involved parties, you may now write “whereas” and “therefore” statements.

Step 2: Define Important Information

Once you have already written an introductory section for the joint ownership agreement, the next thing you need to do is to define specific terms. In most joint venture agreements, the terms that need to be defined are debt, liabilities, initial contribution, intellectual property, etc. However, only provide important definitions of words that have complex meanings, but make sure that each term is relevant and has an excellent role in the joint agreement. Doing this is essential because this will establish clarity and accuracy on the joint business agreement.

Step 3: State the Objectives of the Agreement

After describing essential terms on the joint agreement, it is now time to state its objectives. Basically, these objectives are the main focus of the parties involved. The agreement must have the goals that both parties want to accomplish to provide a clear scope of its purpose. It will also help both parties clearly understand their expectations. This section of the joint agreement may read as “Party A enters into this agreement to maximize their real estate property market.” and the likes. To ensure that the goals and objectives of both parties are clearly defined, you may use bullet points on listing them out.

Step 4: Layout the Contributions of eachParty

Now that the goals and objectives of both parties are clear, the next thing you need to do is lay out what each party will contribute to the joint venture. The contributions of each party are essential to have a binding agreement. In doing so, both parties must discuss and agree on each of their participation before writing them down in the joint development agreement. Each contribution may differ from the nature, strengths, and weaknesses of the business. Nevertheless, it is essential to clearly state whatever each party has agreed to contribute of value to the joint venture in the contract.

Step 5: Explain the Sharing of Profit, Loss, and Liabilities

Once the contributions are made, it is now time to explain and discuss in the joint agreement the profit-sharing, losses, and liabilities within the parties involved. In some cases, the sharing of profits and losses and obligations may not be equal. This may depend on how much contribution did each party make. For example, if Party A contributed a large amount of money to the joint venture, and Party B contributed about 30 percent, Party A would take a large amount of profit. At the same time, Party B will only take 35 percent of the profit. This is also the same as the losses, Party A will take significant responsibility for the damages, while Party B will only take responsibility for the 30 percent of the losses. In terms of liabilities, it will be taken at the party who offered the service. Nonetheless, it is essential to discuss this section with all the parties involved to ensure that everyone is on the same page.

Step 6: Provide a Dispute Resolution Clause

There is always a big possibility that disputes may happen anytime soon in the joint venture. That is why it is necessary for the parties involved to discuss how to resolve possible conflicts. This is necessary so that small misunderstandings will not result in an unsuccessful joint venture and litigation. And as much as possible, bringing despite into court should be the last option. There are different ways of resolving conflict, and one of the conventional approaches is through mediation. In some cases, parties in conflict use settlement agreements to discuss, manage and resolve disputes. Whatever set of mechanisms you may think of, as long as everyone in the joint agreement agreed and understood it.

Once every essential information is present in the joint agreement, you may proceed with getting it checked by a business lawyer before getting it signed. Doing this is necessary because it ensures that the joint agreement is valid and legally binding. If it is good to go, make the parties involved read the whole deal and make them sign the agreement.

FAQs

Are joint venture agreements legally binding contracts?

Like any other business contracts, joint venture agreements are legally binding contracts that uphold the agreed terms and conditions of the parties involved. Joint agreements may take legal processes once the breach of contract happens.

What are the types of joint ventures?

There are different types of joint ventures. However, choosing one depends on what the business or organization wants to achieve. The common types of joint ventures are limited co-operation, separate joint venture business, and business partnerships. In deciding what joint venture your business should do, it is important to consider the high possibilities of risks once the joint venture goes wrong.

Are joint ventures beneficial in business?

The majority of businesses and organizations have used joint ventures with various advantages. But, in some cases, joint ventures don’t succeed. That is why when entering a joint venture, it is always important to make careful considerations. Proper planning and research are necessary when making changes in the business.

Planning the expansion of your business scope in a busy business industry can take a lot of resources, time, and money. Some businesses and organizations consider partnering with other businesses with the same goals and objectives as them. But, despite having the same goals to achieve, it is necessary for joint venture partners to discuss specific terms to protect their part in case of disputes. That is why it is essential to have a written joint agreement. So, if you are up for a partnership, you should consider preparing this type of business agreement.