How to make joint ventures work

By James Morris 2021-04-12T05:00:00

What are the elements of a successful JV, and what contractual omissions can lead to failure?

Joint ventures between contractors are common, especially on very large infrastructure projects such as Crossrail. The perceived commercial benefits include the ability to share risk and increase bargaining power. Sometimes it is essential to form a JV to demonstrate the skills and/or experience required to win the work. Or local law may require the use of local labour, and joining forces with a local contractor is a way to meet that requirement.

Despite their popularity, JVs do not always succeed. Indeed, they often fail. Why does that happen, and what can be done to reduce the risk of failure? JV partners face important choices at the outset, and during the partnership, which they need to consider carefully, to maximise the prospects of success.

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