Key points while entering into a joint venture

James Bremen.

Termination and long-stop date
The consortium agreement should include termination clauses covering different circumstances.

These include where the bid is unsuccessful; where the owner cancels the tender; and where the consortium agreement only covers the tender and the bid is successful.

In this case, the termination of the consortium agreement will typically trigger the formation of a new consortium agreement covering the execution of the project.

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In addition, all consortium agreements ought to have a long-stop termination date in the event that none of the events mentioned above occur.

A long-stop date provides security that the consortium will only last for a specific period of time (typically one or two years).

Conclusion
A poorly drafted consortium agreement could lead to internal disputes amongst the members, which could adversely affect the project. This, in turn, could lead to claims from the owner, which would further burden the consortium.

Who is James Bremen?
James Bremen is a partner in King & Spalding’s London office and a member of the Global Transactions Practice Group.

Bremen has practised exclusively in construction law for more than a decade. He has significant experience in project development and dispute resolution both in the UK and internationally.