Model Joint Venture (Consortium) Agreement Between Consultants Second Edition 2017
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THE NEW FIDIC JOINT VENTURE AGREEMENT : FIDIC has developed model forms for two types of associations between service suppliers - this Model Joint Venture Agreement and a Model Sub-Consultancy Agreement.
These two model forms of agreement are compatible with the 2017 fifth edition of FIDIC’s “Client/Consultant Model Services Agreement“(the White Book). FIDIC intends to publish Guides on the use of all of these Agreements.
This model Joint Venture Agreement will allow the parties to agree, on a project-specific basis, their obligations, services and rewards within the Joint Venture created among them by the effect of this Model Joint Venture Agreement. It is not intended to create a legal entity or to be used to create a more permanent non-project specific legal association.
The Joint Venture´s action, capacities and internal decision making processes have been clearly structured.
One purpose of a model agreement such as this is to raise the awareness of the Members of the Joint Venture as to what should be in the Agreement to mitigate their individual risks and avoid disputes between themselves.
A second purpose is to provide the Members with a manageable agreement which establishes clear responsibilities and legal capacities to act. It is aimed at avoiding disputes and deadlocks between the Members.
In countries where it is inappropriate to use the description “Joint Venture” for the type of project-specific association described above, the wording in the Joint Venture Agreement can be changed accordingly.
It must be remembered that it is the Joint Venture Members as the Joint Venture who will be contracting with the Client, and therefore, it is the Joint Venture Members together, as the Joint Venture, who will be the “Consultant” as defined in the “Client/Consultant Model Services Agreement“ (the White Book), or any other form of Services Agreement.
Users should check on a case-by-case basis the precise nature of this Agreement in light of the governing law, assuming that the lowest level of alliance is intended. This Model Joint Venture Agreement does not create a legal entity, but is an agreement between parties to associate for a specific project. The individual Members need to agree the allocation among themselves of the obligations and liabilities within the Joint Venture. Towards the Client, each Member will typically be jointly and severally liable for the performance of Services under the main Services Agreement with the Client and for any breach of that agreement. At the same time the sharing of duties and liabilities requires the Joint Venture Members to coordinate their efforts in an effective and efficient manner.
Certain issues deserve detailed attention to ensure that, when the Joint Venture is appointed, each Member undertakes its agreed tasks and obligations.
In particular, the matter of insurances and guarantees requires early attention to ensure that the professional liability of the Joint Venture is fully covered.
Further guidance is available from FIDIC but, in all cases, it is recommended that legal advice be obtained.
When transfer of technology is an important part of a project, this should be set out in the written appointment and terms of the Services Agreement.
The transfer of technology should be specified in Appendix 3 [Allocation of the Obligations] in accordance with Clause 4 [Performance of the Services] as follows:
The emphasis of the main Services Agreement, e.g. the Client/Consultant Model Services Agreement (“White Book”) is on the fulfilment of obligations under that Services Agreement (“White Book”), rather than the assignment of different tasks to the Members.
This document can be ordered from Ms Patience Tsotetsi at Tel: 011 463 2022 or Email: email@example.com.