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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:
- an express or implied agreement to
carry on a joint enterprise;
-
a manifestation
of that intent by the parties;
- a joint proprietary interest, as
demonstrated by the contribution of property, finances, effort, skill or
knowledge by each party;
- some degree of joint control over the
enterprise; and
- 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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