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4.4-18  Joint Ventures

New October 8, 2010

A joint venture, also referred to as a joint adventure or a joint enterprise, exists where two or more persons combine their property, money, efforts, skill or knowledge in furtherance of a particular transaction [or course of transactions] and share in the profits or losses from the venture. [Although a profit motive is often recognized as one factor suggesting the existence of a joint venture, the absence of a profit motive is not fatal to the existence of a joint venture.] The contributions of the various participants need not be equal. 

The relations and obligations of a joint venture in general are those which govern a partnership. A joint venture is a partnership that is limited to an agreement to join together for a particular transaction [or course of transactions]. 

Generally, there must be a contractual relationship between the participants. The relationship between contracting parties cannot amount to a joint venture unless the parties so intend. It is not necessary that there be an express written or oral contract to form a joint venture, for the conduct of the parties and other circumstances will often justify the inference that such an agreement existed. The relevant criteria to determine whether or not the parties intended a joint venture include:

  1. an express or implied agreement to carry on a joint enterprise;
  2. a manifestation of that intent by the parties;
  3. a joint proprietary interest, as demonstrated by the contribution of property, finances, effort, skill or knowledge by each party;
  4. some degree of joint control over the enterprise; and
  5. a provision for the parties to share in both the profits and losses of the enterprise. 

While none of these elements alone is sufficient, and while every element may not necessarily be present in every case, there must be a community of interest and a right to joint control in order to constitute a joint venture. 

You must determine whether the association of <name> and [and <name>] in <description of alleged enterprise> constituted a joint venture. 

If you find that there was a joint venture and that <name> [and <name>] (was/were) (a party/parties) in that joint venture, then I instruct you that:

[Each party to a joint venture is liable for the debts and obligations of the venture.] [and/or] [Each party to a joint venture is liable for the (wrongful acts/negligence) of any other party to the joint venture, which is committed within the scope, or in furtherance, of the business of the joint venture.] 

Authority 

Doe v. Yale University, 252 Conn. 641, 672-76 (2000); Travis v. St. John, 176 Conn. 69, 72-73 (1978); Dolan v. Dolan, 107 Conn. 342, 349-50 (1928); 46 Am. Jur. 2d, Joint Ventures, §§ 1, 8, 10, 34, 35 (2006).

Notes

There is no Connecticut authority expressly establishing that parties to a joint venture have liability for the debts of the venture and the torts of other parties to the venture committed while acting within the scope or in furtherance of the business of the venture. The liability instructions are based on the acknowledged parallel between the relations and obligations of joint adventurers and general partners. Dolan v. Dolan, supra, 107 Conn. 349-50; Doe v. Yale University, supra, 252 Conn. 672-76. With respect to general partners, the Uniform Partnership Act makes general partners jointly and severally liable for the obligations of the partnership (General Statutes § 34-327) and for the actionable wrongful conduct of any partner acting in the ordinary course of business of the partnership or with authority of the partnership. (General Statutes § 34-326). The general American rule is that these same liabilities attach to members of a joint venture. See 46 Am. Jur 2d, Joint Ventures, §§ 34, 35 (2006). 

Judges are cautioned that partnership liabilities are premised in part on the concept of agency, i.e. that each partner of a partnership is an agent of the partnership and the other partners when acting in furtherance of the partnership’s business. 46 Am. Jur. 2d, Joint Ventures, § 34. The Connecticut caselaw on joint ventures, however, recites a concept that, unlike partners, joint venturers are not agents of the venture. See Dolan v. Dolan, supra, 349; Doe v. Yale University, supra, 674. For this proposition, Doe cites only Dolan and Dolan cites only Keyes v. Nims, 43 Cal. App. 1, 184 P. 695 (1919) where the Court of Appeals said without any citation of authority: “In a joint venture, no one of the parties thereto can bind the joint adventure.” Id., 9.  American Jurisprudence states to the contrary without any acknowledgment of the “no agency” concept. “In accordance with the general rule that each member of a joint venture is deemed to be the agent of the other when acting in furtherance of the common objective, coadventurers are agents of each other as to third parties as to all acts within the scope of the enterprise. . . .” 46 Am. Jur 2d, Joint Ventures, § 34 (2006). 

Each judge charging on the liability of a joint venturer for obligations of the venture or torts of co-adventurers should assess the viability and impact of the “no agency” concept under Connecticut law.
 


 

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