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Joint Venture Agreement Indemnification

Companies making a joint effort should understand the legal status of joint ventures in accordance with existing legislation and the impact of risk sharing on insurance coverage. It is wise for companies to organise their joint venture properly. These include the realization that there could be a defence of the joint venture on the basis of the participation of each party. When, in most countries, a contract is signed by more than one company or by a joint venture representing more than one company, companies assume the commercial risks associated with the contractual agreement and, more importantly from a professional liability perspective, the liability for the negligence of other joint ventures and their own. Some companies do little to anticipate the problems that a joint venture could cause by ignoring the fact that, if they assert themselves as a “team” and jointly sign a contract, they have created a joint venture. Whether companies try to use language as “in relation to” or “as part of the design team composed of”, the result is in almost all cases the same – responsibility of the other party without real authority or ability to control the actions of the other party. Each participant in the Joint Undertaking shall have the right to demand and expect from any other participant full, fair, open and honest disclosure of all matters concerning the relationship. . . .