Model Joint Venture (Consortium) Agreement between Consultants
Each member of the joint venture is generally jointly responsible for the provision of services under the Master Service Agreement with the Customer and for any breach of this Agreement. (We talk about unregistered joint ventures in this article. The alternative, a registered joint venture where the consultants form a new joint venture management company, requires additional legal formalities not covered by the FIDIC agreement. When the consultants asked me if I could report them to a “standard” joint venture agreement, I always had to say no. Joint venture agreements are usually developed by lawyers for each project, and I am not aware of any pro forma contracts published by Australia or consultants. One of the objectives of such a model agreement is to make the members of the Joint Undertaking aware of what should be included in the agreement in order to reduce their individual risks and avoid conflicts between them. The members of the joint venture should at all times agree on joint efforts to change the scope of the services and other challenges until the end of the services. In the absence of an agreement, all members may be held liable for non-compliance with their obligations due to disagreements between the members of the joint venture. The joint venture agreement can be a useful guide for some common problems in unregistered joint ventures, especially for consultants with limited experience in this structure. Compatible with the 5th edition 2017 of the Model Customer/Consultant Service Contract (FIDIC White Paper). This document contains: Agreement, General Terms and Conditions and 9 examples of annexes with instructions to be completed. FIDIC has developed standard forms for two types of connections between service providers – this model joint venture agreement and a model sub-consulting agreement. Describes commitments, services, and rewards between different parties on a project-specific basis.
One of the objectives of a model agreement like this is to educate joint venture members about what should be included in the agreement in order to mitigate their individual risks and avoid disputes between them. FIDIC has developed standard forms for two types of connections between service providers – this model joint venture agreement and a model sub-consulting agreement. These two agreement templates are compatible with the fifth edition of FIDIC`s 2017 Client/Consultant Service Agreement Template (White Paper). FIDIC intends to issue guidance on the use of all these agreements. This model joint venture agreement will allow the parties to agree, on a project-specific basis, on their obligations, services and rewards within the joint venture created between them by the effects of this model joint venture agreement. It is not intended to create a legal entity or to be used to create a more permanent legal association that is not project-specific. The shares, capabilities and internal decision-making processes of the joint venture are clearly structured. One of the objectives of a model agreement like this is to educate joint venture members about what should be included in the agreement in order to mitigate their individual risks and avoid disputes between them. A second objective is to provide members with a manageable agreement that clearly establishes responsibilities and legal capacity to act. It aims to avoid disputes and blockages between MEPs. In countries where it is not appropriate to use the term “joint venture” for the type of project-specific association described above, the wording of the joint venture agreement may be amended accordingly.
It should be remembered that it is the members of the joint venture as a joint venture who will enter into a contract with the client, and therefore it is the members of the joint venture together as a joint venture who will be the “consultant” within the meaning of the “Model Client/Consultant Service Agreement” (the White Paper) or any other form of service agreement. If, for any reason, it is not appropriate for one of the potential members to be in a direct contractual relationship with the client, the use of the sub-consulting contract should be considered. Users must verify on a case-by-case basis the exact nature of this Agreement in light of applicable law, provided that the lowest level of the Alliance is provided. This model joint venture agreement does not create a legal entity, but is an agreement between the parties to join forces for a specific project. In case of doubt, it is advisable to seek legal advice. .