Legal Jargon

A joint venture agreement is a legally binding contract between two or more parties who agree to work together on a specific commercial project or business objective. Rather than merging entirely, each party remains a separate entity but collaborates by pooling resources, expertise or capital to pursue shared goals.

The agreement sets out the terms of the collaboration, including each party’s contributions, rights and responsibilities, how profits and risks are shared, management and decision-making arrangements, and what happens if the venture ends or disputes arise. These agreements help provide certainty and protect each party’s interests, whether the venture operates under a simple contractual arrangement or through a jointly owned company or partnership. This helps avoid misunderstandings and protects everyone involved if circumstances change.

A deadlock provision is a clause in a contract, usually found in a shareholders’ agreement or joint venture agreement, that sets out what happens if the parties cannot agree on an important decision.

In many joint ventures and companies with multiple owners, certain key matters require unanimous or majority approval. Problems can arise where those owners are split evenly, or where agreement is required but cannot be reached. When this happens, the business can become stuck and unable to move forward. This situation is known as a “deadlock”.

A deadlock provision provides a pre-agreed mechanism for resolving that impasse. Rather than allowing the dispute to escalate or stall the business indefinitely, the agreement sets out a clear process to follow.

Depending on the structure of the business, a deadlock clause might require the issue to be escalated to senior representatives of each party, referred to mediation, or determined by an independent expert. In some cases, particularly in 50:50 joint ventures, the clause may allow one party to buy out the other, or even require the company to be wound up if no resolution can be reached.

Deadlock provisions are not about anticipating failure. They are about sensible planning. By agreeing in advance how disagreements will be handled, the parties reduce uncertainty, protect the value of the business, and minimise the risk of costly disputes.

If you are entering into a joint venture or shareholders’ agreement, taking advice at the outset can help ensure any deadlock mechanism is fair, workable and aligned with your commercial objectives.

A contract term that, if breached, gives the aggrieved party the opportunity to terminate the contract and/or make a claim for damages or losses.

Another word for “seller”.

Undertakings are a common part of the legal process, and are defined as a legally-binding promise to do, or not do, something.

The people or entities appointed to oversee the management of property or other assets on behalf of beneficiaries, who might be private individuals, a charity or another type of organisation. In the context of estate administration following a death, trustees will be the people named in a will to manage the money held in trust for the beneficiaries. The trustees are the legal owners of the assets held in a trust and their role is to deal with the assets according to the deceased’s wishes, as set out in the trust deed or their will.

A formal legal structure where property or other assets are held by one or more people for the benefit of another.

A dealing with property such as a sale, purchase or remortgage.

A clause in an employment contract that sets limits on what a former employee can do in the weeks and months after their employment ends. Typically, these will prohibit an employee from working for a direct competitor or setting up in direct competition with their former employer, or contacting their clients/customers and suppliers for a set period of time after leaving the business.

A way of giving permission to someone, either temporarily or for the rest of your life, to make decisions and act on your behalf in relation to your personal affairs, usually relating to financial and/or health and welfare matters. Actions taken by your attorney are legally binding and you should therefore take legal advice before granting power of attorney.