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Unwind/Liquidation Clauses

 

Another significant issue is whether one of the parties to the joint venture may elect to unwind and terminate the venture or whether both parties must mutually agree on a termination. Related questions involve whether one party would receive the opportunity to buy-out the other party's interest in the venture under agreed upon circumstances, and if so, for what price? What would happen to joint venture projects that were in progress at the time of the termination?

 

Joint ventures can be very rewarding for both parties to the venture, but the parties should agree to clear terms for the boundaries of the joint venture and the rights and responsibilities of the parties in the event of an unwind or termination of the arrangement.