We are often asked to advise us on the most important issues to consider when a party considers termating a joint venture. In most cases, the activities of the joint venture will continue and one party will simply acquire the entire joint venture and act alone, on the basis that the interests of both parties are likely to be served if the transaction is dissolved and the assets are liquidated or a sale is imposed on the parties. It is therefore from this point of view that we have drawn up the following list of the first ten reflections. Key factors naturally vary depending on the structure of the joint venture. In the oil and gas sector, for example, contractual joint ventures are commonplace, so considerations will differ from the considerations set out below. Important considerations when terminating a joint venture The three main possibilities for organizing joint ventures are: a joint venture in the field of real estate raises interesting questions that lie at the interface of real estate law, contract law and company law. In the rest of this presentation, I will address some of the problems that may arise in practice and how they could be solved. The Joint Undertaking Agreement must include clear measures to manage the termination of the Joint Undertaking. For example, if the undertaking terminates due to the failure of one party, the joint venture agreement should enable the defaulting party to remedy that situation.
In practice, in order to convince a court to impose an oral shareholders` agreement, it will be useful to prove one of the two things. The first is that either party was commercially undifferentiated. A court will be much more likely to find that there is a legally enforceable oral agreement when either party is unable to do business than when the agreement was reached between experienced real estate professionals. The second is that, if the parties have acted in accordance with it for some time after the oral agreement, the courts will be more likely to consider them enforceable. That second consideration is obviously relevant to the question whether, despite the absence of such an agreement, a party is prevented from denying it or whether it holds assets in constructive trust for the purposes of the joint venture. However, it is also a question of ex post conduct from which the Court may infer that the parties wanted their informal agreement to be binding from the outset. Given the risk of litigation, shareholder agreements often contain provisions that the dispute must be referred to an expert or arbitrator for decision. While this would likely lead to a much quicker and less costly solution, which would result from the opening of legal proceedings, it is not uncommon for a party to be dissatisfied with the decision made and may try to overturn the decision of the expert or arbitrator. . .
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