How to Terminate a Joint Venture Due to a Breach of Contract


A joint venture is an agreement between two or more people or businesses. The parties combine interests, efforts, ideas or assets for a series of transactions or a single project. Joint ventures can last as long as the parties want, with updates of the agreement possible. Successful short-term agreements clearly spell out the responsibilities of all the partners. That increases the chances of a successful venture -- and also creates options for terminating the agreement for breach of contract.

Read the joint venture agreement for clear examples of nonperformance or breach of contract by one or more of the parties. For example, a joint venture agreement requiring a partner to contribute 50 percent of monthly operating expenses is breached if the partner fails to do so. Or a partner may violate a non-compete clause in the agreement by entering into a similar arrangement with another company. Compare actions by the partner or partners against stipulations in the contract to confirm a breach of contract.

Gather evidence to support the breach of contract. One example: letters written requesting the partner contribute cash to the joint venture as called for in the contract.

Read the joint venture agreement for predetermined termination conditions. Terminating the joint venture agreement means the partnership comes to an end. That means winding down the business opportunity. Joint venture agreements usually stipulate how assets, contracts and other matters are handled after a termination of the agreement.

Consult with an attorney experienced in joint venture agreements. Point out the possible breach of contact and ask the attorney to provide a legal opinion.

Instruct your attorney to send a letter to the partner alleging breach of contract and a termination of the joint venture agreement. Terminate the agreement if the partner agrees with the breach and does not contest it. If the partner contests the termination, instruct your attorney to file a lawsuit alleging breach of contract.

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