Chicago Business Litigation Lawyer Blog
The elements required to establish a joint venture are broadly consistent across the search results. They include:
1. An express or implied agreement to carry on an enterprise (805 ILCS 206/202), (Ambuul v. Swanson, 162 Ill.App.3d 1065 (1987)), (Yokel v. Hite, 348 Ill.App.3d 703 (2004)).
2. A manifestation of intent by the parties to be associated as joint venturers (805 ILCS 206/202), (Ambuul v. Swanson, 162 Ill.App.3d 1065 (1987), (O’Brien v. Cacciatore, 227 Ill.App.3d 836 (1992)).
3. A joint interest as shown by the contribution of property, financial resources, effort, skill, or knowledge by each joint venturer (805 ILCS 206/202), (Ambuul v. Swanson, 162 Ill.App.3d 1065 (1987)), (Yokel v. Hite, 348 Ill.App.3d 703 (2004)).
4. Some degree of joint proprietorship or mutual right to exercise control over the enterprise (805 ILCS 206/202), (Ambuul v. Swanson, 162 Ill.App.3d 1065 (1987)).
5. Provision for the joint sharing of profits and losses (805 ILCS 206/202), (Ambuul v. Swanson, 162 Ill.App.3d 1065 (1987)), (O’Brien v. Cacciatore, 227 Ill.App.3d 836 (1992)).
It is important to note that all four criteria must be established or a joint venture does not exist (Fogt v. 1-800-Pack-Rat, LLC, 2017 IL App (1st) 150383 (2017)).
The obligation of a joint venturer to account to another member of the joint venture arises from the fiduciary nature of their relationship. The relationship between joint venturers, like that existing between partners, is fiduciary in character and imposes upon the participants an obligation of loyalty and good faith in their dealings with each other with respect to the enterprise (Ambuul v. Swanson, 162 Ill.App.3d 1065 (1987)). In the case of a sale of joint venture property by one joint adventurer, the other is entitled to an accounting on principal and interest profit, if any, received by the seller on the purchase money mortgage received when the joint venture property was liquidated (Burtell v. First Charter Service Corp., 83 Ill.App.3d 525 (1980)).
However, it’s important to note that whether or not a joint venture exists is a question for the trier of fact as they are in the best position to judge the credibility of the witnesses (Ambuul v. Swanson, 162 Ill.App.3d 1065 (1987)), (Thompson v. Hiter, 356 Ill.App.3d 574 (2005)), (Andrews v. Marriott Intern., Inc., 2016 IL App (1st) 122731 (2016)).
Seeking Legal Guidance on Joint Venture Accounting Disputes?
At Lubin Austermuehle, our dedicated team of attorneys is well-equipped with the knowledge and experience to handle complex accounting issues arising from joint ventures. Whether you’re facing discrepancies, contractual disagreements, or any legal challenges in your joint venture operations, we are here to provide you with the legal support you need. Trust us to navigate the intricacies of your case with precision and professionalism.
Contact Lubin Austermuehle today for a free consultation to discuss how we can assist you in ensuring the financial integrity and success of your joint venture partnerships. You can call us at 630-333-0333 or contact us online.