9 Outline co-operation agreement between two venturers to perform a specific contract for a third party1

THIS AGREEMENT is made the day of BETWEEN: (1) (name of first venturer) a company incorporated in England under number (company registration number) whose registered office is at (address) (X Co); and (2) (name of second venturer) a company incorporated in England under number (company registration number) whose registered office is at (address) (Y Co)
[1700]

BACKGROUND2: (A) X Co is (insert detailseg a building contractor with plant equipment and operatives capable of general building and construction) (B) Y Co is (insert detailseg a mechanical and electrical engineering contractor specialising in the design manufacture and installation of mechanical and electrical services) (C) (recite principal contracteg by an agreement in writing made on 1 January 1998 the parties have jointly agreed with the Regional Health Authority to build the General Hospital (including the supply and installation of all the mechanical and electrical services)3 (D) The parties have agreed to enter into certain mutual commitments and to regulate their rights in relation to their joint venture as set out in this agreement.
[1701]

NOW IT IS AGREED as follows: 1 1.1 Interpretation In this agreement unless the context otherwise requires: (A) the Collection Account means the account to be opened pursuant to clause 7.3; (B) the Contract Price means the aggregate amount payable by the Employer to the parties under the Principal Contract; (C) the Employer means (insert name of employer under principal contract) [(add where principal contract contains a right of assignment) or such other entity as shall from time to time be the Employer under the Principal Contract]; [(D) [the Joint Quantity Surveyor (or) the Joint Assessor] means (insert name of firm), Quantity Surveyors of (address);]4 (E) the Management Committee means the committee formed and kept in existence pursuant to clause 5.1; (F) the Principal Contract means (describe principal contracteg the articles of agreement made 1 January 1990 between (1) the Regional Health Authority and (2) X Co and Y Co relating to etc) including the [bills of quantities, plans and drawings (or as appropriate)] and other documents which form part of it; (G) the Project means the works of design, fabrication and installation and all goods materials and services to be provided to the Employer pursuant to the Principal Contract;

(H) (I) (J)

project manager means a person engaged in accordance with clause 6.1; the Site means the site referred to in the Principal Contract; the Solicitors means (insert name of firm), Solicitors of (address) or such other firm of solicitors as the parties shall jointly instruct pursuant to clause 10.
[1702]

1.2

1.3 1.4 1.5 1.6 1.7 1.8 2 2.1 2.2 2.3 3 3.1 3.2

References to statutory provisions shall be construed as references to those provisions as respectively amended or re-enacted or as their application is modified by other provisions (whether before or after the making of this agreement) from time to time and shall include any provisions of which they are re-enactments (whether with or without modifications). Headings are inserted for convenience any and shall not affect the construction of this agreement. Words importing one gender include all other genders and words importing the singular include the plural and vice versa. References to parties are references to the parties to this agreement, and references to persons or parties shall include bodies corporate, unincorporated associations and partnerships. Any covenant by a party not to do an act or thing shall be deemed to include an obligation not to permit or suffer such act or thing to be done by another person. References to consent or words to similar effect mean a consent given in advance in writing signed by or on behalf of the party whose consent is to be given. References to goods include any plant, tools or equipment.
[1703]

Commencement and term This agreement comes into force on the date that it is signed by both parties. Subject to clause 9 this agreement shall terminate when the Principal Contract has been performed and all matters outstanding at the date of that performance have been dealt with in accordance with this agreement5. The provisions of clauses 8, 9, 10 and 11 shall bind the parties following termination of this agreement whether pursuant to clause 9 or otherwise6. Obligation of parties to perform the Principal Contract The parties shall immediately commence and shall regularly and diligently proceed with and perform the Principal Contract, undertaking all work and providing all materials in such manner as the Principal Contract requires7. X Co shall ensure that the work and materials specified in [schedule 1 Part A to this agreement (or) (insert detailseg in chapters 1 to 21 (inclusive) of the Bills of Quantities referred to in the Principal Contract)] are undertaken and provided in accordance with the Principal Contract and as between the parties X Co shall be entitled to receive that part of the Contract Price which relates to that part of the work, namely . Y Co shall ensure that the work and materials specified in [schedule 1 Part B to this agreement (or) (insert detailseg in chapters 22 to 43 (inclusive) of the Bills of Quantities referred to in the Principal Contract)] are undertaken and provided in accordance with the Principal Contract, and as between the parties Y Co shall be entitled to receive that part of the Contract Price which relates to that part of the work, namely .

3.3

[1704]

3.4

3.5

3.6

In the event that the nature, quality or amount of work to be done and materials to be provided in accordance with the provisions of the Principal Contract is varied then the variation shall not affect the validity of this agreement but the obligations of the parties under clauses 3.2 and 3.3 shall be adjusted as follows8: (A) any reduction or omission of any work or materials to be provided under the Principal Contract shall operate as a reduction or omission of the corresponding obligations under clauses 3.2 and 3.3; and (B) any increase in or addition to the nature, quality or amount of any work or materials to be provided under the Principal Contract shall operate as an increase in or addition to the corresponding obligations under clauses 3.2 and 3.3, and each party shall perform that part of the increase or addition as relates to the part of the work or materials for which it has responsibility under clause 3.2 or 3.3 respectively. Where there is a variation in the Principal Contract within clause 3.4 which results in an adjustment to the Contract Price, clauses 3.2 and 3.3 shall continue to apply, but so that each party shall be entitled to receive that part of the adjusted Contract Price that relates to that part of the work or materials for which it is respectively responsible. This agreement relates only to the single joint venture it refers to. It does not constitute either party the agent of the other party, and it does not constitute a partnership between the parties.
[1705]

4 4.1

4.2 5 5.1

Amendments to the Principal Contract9 Neither party shall without the consent of the other: (A) offer, request or agree to any amendment of the Principal Contract; or (B) terminate or repudiate any obligation on any person under the Principal Contract. When giving consent pursuant to clause 4.1 either party may stipulate such conditions for the consent as it thinks fit. The Management Committee The parties shall form a management committee for the purpose of [co-ordinating and managing (or as required)]10 the performance of the Principal Contract. [Each party shall appoint (number) representatives to the Management Committee (or) The Management Committee shall be composed] in accordance with schedule 2 Part A below. [The first members of the Management Committee shall be those persons named in of schedule 2 Part B below.] Individuals who are members of the Management Committee may be replaced at the discretion of the party appointing them. The Management Committee shall appoint a secretary who shall keep and circulate minutes of [all meetings (or) meetings of the kind listed in schedule 2 Part C]. The Management Committee shall meet [on the first Monday of each month of the term of this agreement (or as required)]. Unless otherwise agreed meetings shall be held at [the Site (or as required]. Either party may convene

5.2 5.3 5.4

5.5 5.6

a special meeting of the Management Committee by giving [7 (or as required)] days written notice of the matters to be considered to the other party and to the secretary. The Management Committee shall not have power to amend or vary this agreement or approve any matter requiring the consent of either party. Copies of the minutes of the Management Committee shall be circulated to the parties and to the project managers.
[1706]

6 6.1 6.2 6.3

6.4

Project managers Each party shall constantly keep engaged on the Project a competent project manager. Each party shall procure that its project manager provides all information reasonably required upon request by the Management Committee and complies with unanimous decisions of the Management Committee. Each party shall procure that its project manager consults with the other partys project manager to harmonise the regular and diligent conduct of day to day operations. Further, the project managers shall agree and shall each implement appropriate measures for the following matters: (A) health and safety; (B) stock and inventory control and storage; (C) site security and fire prevention; (D) liaison with the Employer and other persons relevant to the Principal Contract; (E) liaison regarding design changes and variations under the Principal Contract. The project managers (as such) do not have power to vary this agreement or to approve or consent to any matter requiring consent.
[1707]

7 7.1

Property and money [Each party shall provide and shall repair and maintain all [plant,] tools and equipment required to perform its obligations under clause 3. (or where (plant,) tools and equipment are to be hired to one venturer by the other or obtained jointly) (A) Each party shall provide and shall repair and maintain all [plant] tools and equipment required to perform its obligations under clause 3 and: (1) X Co shall provide the [plant,] tools and equipment set out in schedule 3 Part A column 1 and Y Co shall pay to X Co the hire fees set out in respect thereof in of schedule 3 column 2; and (2) Y Co shall provide the [plant,] tools and equipment set out in schedule 3 Part B column 1 and X Co shall pay to Y Co the hire fees set out in respect thereof in schedule 3 column 2. Hire fees shall be paid monthly in advance free of all deductions. (B) The parties shall [purchase or hire] the [plant,] tools and equipment set out in schedule 4. All costs (including all maintenance, repairs and insurance) shall be borne equally by the parties [or apportioned by reference to their respective proportions of the Contract Price or in some other way]. [Upon performance of

the Principal Contract the parties will sell or dispose of such [plant,] tools and equipment and the proceeds of sale or costs of disposal shall be shared equally [or apportioned by reference to their respective proportions of the Contract Price or in some other way].]
[1708]

7.2

7.3

If any [plant] tools or equipment are lent or hired by either party to the other, the borrower shall take all reasonable measures required to preserve them in good condition, including all day to day maintenance, and shall promptly deliver them up to the lender on request as soon as they are no longer required to perform the Principal Contract. The parties shall open a current account at (bank) of (branch address) (the Bank) which shall be called the [X Co (or) Y Co] Collection Account11, and the following provisions shall apply: (A) All payments received by either party on account of the Contract Price or otherwise under the Principal Contract shall be paid into the Collection Account. Each party shall give all written authorities, authorisations and instructions necessary to ensure that all sums due under the Principal Contract are paid into the Collection Account. (B) During the term of this agreement withdrawals from the Collection Account and all instructions to the Bank shall require the signatures of [2 (or as required)] representatives of each party. If for any reason this agreement terminates prior to the Collection Account being closed in accordance with clause 7.3(D) the provisions of clause 9 shall apply. (C) Save for any deposit required to open or maintain the Collection Account no sums other than sums received pursuant to the Principal Contract shall be paid into the Collection Account. (D) The Collection Account shall be kept in being until the final payment under the Principal Contract has been received [or eg until one month after the final certificate has been issued under the Principal Contract]. (E) The parties will give such joint written instructions to the bank as may be required to give effect to the provisions of clause 7.3 and clause 9.
[1709]

8 8.1

Liability of the parties12 (A) Each of the parties shall be responsible (except as provided in this clause 8) for the health and safety of its own employees and subcontractors whilst on the Site and shall ensure that they receive appropriate instruction in safety procedures and are provided with all safety equipment required by law or which is by generally accepted best practice from time to time. Each of the parties shall be responsible for the safety, proper functioning, fitness for purpose and compliance with all legal requirements of all [plant,] tools and equipment it brings onto the Site for the purposes of performing the Principal Contract (subject to the obligation of a party to provide routine maintenance to equipment which it has borrowed or hired from the other party

(B)

under clause 7.1, and [plant,] tools and equipment purchased jointly in respect of which the parties shall be jointly responsible for the safety, proper functioning, fitness for purpose and compliance with all legal requirements) and this responsibility shall extend (save as aforesaid) to ensuring the safety, proper functioning and fitness for purpose of the [plant,] tools and equipment in the hands of the employees or sub-contractors of the other party or any other parties, including without limitation, lawful visitors to the Site and any passers-by or owners or occupiers of adjoining land who may make proper use of it or may be exposed to it.
[1710]

(C)

(D)

Each of the parties shall be responsible for the stability, safety and fitness for its purpose and compliance with all legal requirements of every scaffolding and temporary erection or structure brought by it to or erected or caused to be erected, by it upon the Site and this responsibility shall extend to ensuring such stability, safety and fitness for purpose when each scaffolding or temporary erection or structure is walked upon or driven over, or used as a platform for, any employees or sub-contractors of the other party or any other parties, including, without limitation, lawful visitors to the Site and any passers-by or owners or occupiers of adjoining land, who make proper use thereof or may suffer injury, loss or damage by the collapse of the same. Each of the parties shall be responsible for executing its part of the works under the Principal Contract, not only in accordance with the contract specification but also in a proper, workmanlike and substantial manner in accordance with generally accepted practice and with due regard to the safety, stability and durability of the resulting structure.
[1711]

8.2

In the event of: (A) a successful claim being brought against either or both of the parties by the Employer for breach of the Principal Contract, or by the Employer or any employee or sub-contractor of the Employer or of either party, any lawful visitor to the site, any passer-by, any owners or occupiers of adjoining land or any other party whatsoever, arising in respect of negligence, nuisance, breach of statutory duty, Rylands v Fletcher liability, or any other tort or in respect of any other legal right or remedy, howsoever arising out of the performance of the works under the Principal Contract, or (B) any occurrence affecting or abating the valuation of any work or materials supplied pursuant to the Principal Contract resulting from a breach thereof by either party, or (C) a successful prosecution against either party or its directors or employees in respect of any failure to comply with any legal requirement to be complied with during the course of the works under the Principal Contract then as between the parties all liabilities, costs, claims, demands, expenses, fines and other penalties (including legal fees and expenses) arising therefrom or in any way relating thereto shall be borne by each party to the

8.3

8.4

extent of its responsibility therefor, determined in accordance with clause 8.1 and the provisions of this agreement generally, and each of the parties shall indemnify and keep indemnified and account to the other party accordingly. Where any set-off or abatement is made by the Employer during the term and either or both the parties dispute or contest the lawfulness or amount of any withholding, the party who by virtue of clause 3 is to carry out the disputed work shall bear the abatement (or if the abatement affects works to be carried out by both of them, they shall bear it in the same proportions as their respective entitlements to the Contract Price) until the liability of the parties and the Employer has been finally ascertained. The provisions of this clause 8 shall survive the termination of this agreement.
[1712]

9 Termination of joint venture during term of the Principal Contract13 9.1 Where a party (in this clause 9 called the Party in Default): (A) suspends, for any reason its performance of all or any part of the obligations under clause 3; or (B) fails to proceed regularly and diligently to perform its obligations under clause 3; or (C) fails to pay any sum properly due under this agreement or the Principal Contract; or (D) goes into liquidation whether compulsory or voluntary (except for the purposes of a bona fide reconstruction or amalgamation with the consent of the other party, such consent not to be unreasonably withheld); or (E) has an administrator appointed or a receiver, administrative receiver or manager is appointed over any part of its assets or undertaking; or if in reliance upon clause (number) of the Principal Contract the Employer serves notice specifying a default which entitles the Employer to terminate the Principal Contract14 then the other party (in this clause 9 called the Party Giving Notice) may, but is not obliged to, give a notice to the Party in Default specifying the default. If the party in default continues the default for [7 days (or as required)]15 [or at any time repeats the default] then without prejudice to any other rights of the parties, the Party Giving Notice may by notice forthwith terminate this agreement.
[1713]

9.2

Where this agreement is terminated pursuant to clause 9.1 then, unless the Principal Contract is terminated by the Employer, the Party Giving Notice shall use its best endeavours to perform the Principal Contract. The Party Giving Notice may for this purpose: (A) pay any supplier or sub-contractor of the Party in Default for any goods delivered or works done for the purposes of the Principal Contract (whether before or after termination) so far as not already paid by the Party in Default; and (B) notify the Bank that this agreement has been terminated and that the Party in Default has ceased to have power over the Collection Account; and (C) apply money in the Collection Account from time to time to discharge costs and expenses incurred in performing the Principal Contract; and

(D)

(E)

apply any sum remaining in the Collection Account towards the entitlement of the Party Giving Notice to receive its proportion of the Contract Price on work performed pursuant to the Principal Contract; and enter upon any part of the Site (including all temporary buildings, plant, goods and materials at the Site or adjacent to it which belong to or are used by the Party in Default).
[1714]

9.3

Where this agreement is terminated pursuant to clause 9.1 then, unless the Principal Contract is terminated by the Employer, the Party in Default shall if so required by the Party Giving Notice within 14 days of termination of this agreement: (A) assign to the Party Giving Notice without payment, the benefit of every agreement for the supply of goods or the execution of any work for the purposes of the Principal Contract; and (B) deliver to the Party Giving Notice, without payment, all plans, drawings specifications, bills of quantities and other information (including in the case of information in machine-readable form, full details of how to retrieve it) relating to the design, setting out, installation or construction of any work done or to be done or goods (including any equipment) supplied or to be supplied for the purposes of the Principal Contract; and (C) provide true, complete and accurate copies of all books of account, invoices, orders and other information connected with the valuation of and payment for any work done or to be done or goods supplied or to be supplied for the purposes of the Principal Contract; [and] (D) deliver [to the Party Giving Notice (or) to the Site] all goods (including any in a partly finished condition) supplied or to be supplied for the purposes of the Principal Contract[; and (E) remove from the Site any temporary buildings, plant, tools, equipment or other goods belonging to him PROVIDED that if the Party in Default fails to comply within a reasonable time then the Party Giving Notice may remove and sell any such property, paying the proceeds, less any costs incurred, into the Collection Account].
[1715]

9.4

The Party in Default shall allow or pay to the Party Giving Notice: (A) the cost of performing its proportion of the Principal Contract to completion or its termination (as the case may be); and (B) the amount of all liquidated and ascertained damages and direct loss or expense which the parties or either of them becomes liable to pay (whether under the Principal Contract or under any subcontract) by reason of any act or omission of the Party in Default; and (C) the amount of any direct loss or expense caused to the Party Giving Notice by reason of any act or omission of the Party in Default and the termination of this agreement; and (D) all other loss and damage (including loss of profit) caused by the default or termination.

9.5

9.6

Until after [the certificate of making good of defects has been issued under the Principal Contract (or) the works to be performed under the Principal Contract have been completed] the Party in Default shall not be entitled to: (A) receive any sums from the Collection Account; or (B) payment of any sums under the Principal Contract. Upon completion of the works to be performed under the Principal Contract and the making within a reasonable time of all necessary accounts, the Party Giving Notice shall deliver to the Party in Default a statement showing the amount: (A) of expenses properly incurred by; and (B) of any direct loss or damage caused to the Party Giving Notice by reason of the default of the Party in Default, and: (C) standing (whether in the Collection Account or held by or due from the Employer) to the credit of the Party in Default; (D) received (if any) from the Party in Default pursuant to clause 9.7; and (E) interest on the aforesaid items at the annual rate of %; and the difference between the aggregate of the sums referred to in clauses 9.6(A) and 9.6(B) and the aggregate of the sums referred to in clauses 9.6(C) to 9.6(E) (inclusive) shall be a debt payable by the Party in Default to the Party Giving Notice or vice versa (as the case may be).
[1716]

9.7

9.8 9.9

Where termination of this agreement pursuant to clause 9.1 occurs more than [3 (or as required)] months before [the certificate of making good of defects was due to be issued pursuant to the Principal Contract (or) the contractual date for completion of the works under the Principal Contract] then the Party Giving Notice may deliver to the Party in Default after the termination and at intervals of no less than one month thereafter, an interim account showing the amount of the total cost of the work executed and the goods provided by the Party Giving Notice which has been included in any interim [certificate or] valuation under the Principal Contract and which has not been paid by the Employer under a claim in good faith to be entitled to exercise any right of set-off in respect of the consequences of the default of the Party in Default. The Party Giving Notice shall be entitled to payment of sums shown in the interim account within 14 days of the delivery of the account. The parties shall ensure that all [measurements and] valuations shall be completed within a reasonable time of completion of the Principal Contract. The Party in Default shall at its request and expense be supplied by the Party Giving Notice with copies of all measurements, valuations and certificates performed and issued under the Principal Contract and any sub-contract in respect of which a payment or allowance is claimed or due.
[1717]

10 10.1

Claims by or against the Employer or third parties Where either party wishes to bring or resist proceedings for any claim under the Principal Contract [or under any sub-contract] which solely affects the remuneration or liability of one of the parties then, having provided such security for costs as may be appropriate, either party may use the name of the other to bring or resist the proceedings. All costs and expenses incurred shall be borne by, and all sums recovered shall belong to, the party bringing or resisting the claim.

10.2

If any claim is brought by or against either or both of the parties under the Principal Contract [any sub-contract] or by any other party in respect of a claim in any way arising out of the performance by the parties of the Principal Contract or a prosecution is brought against a party or any of its directors or employees, and the claim or prosecution is one in respect of which they may both to any extent be responsible by virtue of clause 8 of this agreement or otherwise, they shall jointly instruct the Solicitors to handle the claim or prosecution [and, if the circumstances admit, shall instruct the [Joint Assessor (or) Joint Quantity Surveyor] to advise and assist with valuing the quantum of the claim]. If there is any dispute between the parties as to the conduct of the claim or prosecution or as to whether a claim should be made or the prosecution or claim resisted, the matter shall be referred to the Solicitors and the parties shall follow their advice. During the continuance of the claim or prosecution the parties shall bear the costs and expenses of it [equally (or) in the same proportions as those in which they are entitled to receive the Contract Price]. Upon final determination or settlement the total amount of costs and expenses incurred (after taking into account any contribution recovered from the third parties to the dispute) shall be apportioned pro rata according to the amounts recovered by or awarded against each of the parties or payable by one party to the other after applying the principles of responsibility set out in clause 8 and the provisions of this agreement generally.
[1718]

11 11.1

11.2

11.3

Confidentiality Each party shall at all times use its best endeavours to keep confidential (and to procure that its employees, sub-contractors and agents shall keep confidential) any information of a confidential nature which it or they may have acquired or may at any time after the date of this agreement acquire in relation to the clients, business or affairs of the other party and shall not use or disclose such information except with the consent of the other party or when required by law. The obligations in clause 11.1 shall continue without limit in point of time but shall cease to apply to any information for the time being in the public domain otherwise than by a partys breach of those obligations, but nothing in clause 11.1 shall prevent a party from disclosing any information to the extent required in or in connection with legal proceedings arising out of this agreement or the Principal Contract. For the purposes of this clause 11 the expression party shall include the subsidiary companies of that party and that partys holding company and any subsidiary companies of that holding company and any other company controlled by that party and the employees or agents of that party or its subsidiary, holding or controlled companies.
[1719]

12 Employees Each party agrees during the term not to make any offer to employ or engage as a consultant or sub-contractor any employee of the other party. 13 13.1 Taxation16 Each party shall bear its own liability for any taxation or duty chargeable in the United Kingdom in respect of its participation in the venture and each

13.2

undertakes to indemnify the other in respect of any such taxation assessed on and paid by the other in respect of which the former is primarily liable. Any supply made by one party to the other pursuant to this agreement shall be exclusive of any VAT chargeable on it, which shall be paid by the party to whom the supply is made in addition to the payment for the supply, subject to the provision to it of a valid VAT invoice.
[1720]

13.3

All payments made by one party to the other pursuant to this agreement shall be paid free and clear of all withholdings and deductions in respect of taxation, save as required by law. If such withholding or deduction is so required by law, then [the party making the payment shall increase the amount of the payment so that the other party receives the same amount as it would have received in the absence of the requirement to make the withholding or deduction, and] the party making the payment shall give to the other party an appropriate certificate as may be required by law showing the amount of the withholding or deduction. [If the party receiving the payment subsequently obtains relief or credit in respect of the withholding or deduction, then it shall promptly repay to the party which made the payment an amount equal to the credit or relief obtained up to a maximum of the amount by which the payment was increased to take account of the withholding or deduction. The parties shall co-operate with a view to allowing each other to obtain any available relief or credit in respect of any such withholding or deduction in respect of taxation[, and in particular but without prejudice to the foregoing generality shall give any information reasonably required by the other party in connection with the making of a claim for relief under an applicable double taxation treaty].]
[1721]

14 14.1

14.2 14.3 14.4

General This agreement is binding upon the parties and their respective successors and permitted assigns. Neither of the parties shall be entitled to assign this agreement or any of its rights and obligations under it without the consent of the other (which consent the other party may in its absolute discretion withhold). If a party sub-contracts any of its obligations under the Principal Contract to a third party, such sub-contracting shall not affect any of the provisions of this agreement or the obligations of that party, who shall remain liable subject to any remedies it may have against the sub-contractor. No exercise or failure to exercise or delay in exercising any right, power or remedy vested either party under or pursuant to this agreement shall constitute a waiver by that party of that or any other right, power or remedy. Each party shall bear its own costs of or in connection with the preparation and execution of this agreement.
[1722]

14.5

Neither party shall be entitled to make or permit or authorise the making of any press release or other public statement or disclosure concerning this agreement or any of the transactions contemplated in it without the consent of the other party [(except as required by the Stock Exchange, when the party shall first supply a copy of the statement, release or disclosure to the other and shall incorporate any amendments or additions reasonably required by that other party)]. This agreement (together with all agreements and documents executed contemporaneously with it or referred to in it) constitutes the entire agreement

between the parties in relation to its subject matter and supersedes all prior agreements and understandings whether oral or written with respect to it. No variation of this agreement shall be effective unless reduced to writing and signed by or on behalf of a duly authorised representative of each of the parties. 14.6 If any part of this agreement is held to be a violation of any applicable law, statute or regulation, it shall be deemed to be deleted from this agreement and shall be of no force and effect and this agreement shall remain in full force and effect as if that part had not originally been contained in this agreement, and the parties shall negotiate in good faith to try to agree the terms of a mutually acceptable and satisfactory alternative provision. 14.7 This agreement may be executed in any number of counterparts or duplicates each of which shall be an original but such counterparts or duplicates shall together constitute one and the same agreement. [14.8 Time shall be of the essence for the purposes of each provision of this agreement.]
[1723]

15 15.1

15.2

Notices Any notice to be given by either party to this agreement shall be in writing and shall be deemed duly served if delivered personally or by fax or by prepaid registered post (airmail in the case of an address for service outside the United Kingdom) to the addressee at the address or (as the case may be) the fax number of that party set opposite its name below: X Co (insert address, fax number and person for whose attention it should be marked) Y Co (insert address, fax number and person for whose attention it should be marked) or at such other address (or fax number) as the party to be served may have notified (in accordance with the provisions of this clause) for the purposes of this agreement. Any notice sent by fax shall be deemed served when transmitted and any notice served by prepaid registered post shall be deemed served 48 hours after posting to an address in the United Kingdom [or [5 (or as required)] days after posting to an address in the United Kingdom.] In proving the service of any notice it will be sufficient to prove, in the case of a letter, that the letter was properly stamped, addressed and placed in the post, or delivered or left at the proper address if delivered personally and, in the case of a fax, that the fax was duly made to the proper fax number.
[1724]

16 16.1 16.2

Law and jurisdiction This agreement shall be governed by and construed in accordance with English law. [In case any dispute or difference shall arise between the parties as to the construction of this agreement or any matter or thing of whatsoever nature arising or in connection with it (excluding any dispute or difference under clause 13) then the dispute or difference shall be and is hereby referred to the arbitration and final decision of a person to be agreed between the parties to act as arbitrator or, failing agreement within 14 days after either party has given to the other a written request to concur in the appointment of an arbitrator, a person to be appointed at the request of either party by [the

President or Vice-president for the time being of the Royal Institute of British Architects]. The award of the arbitrator shall be final and binding upon the parties. The provisions of the Arbitration Act 1996 shall apply to any arbitration under this agreement17. (or) (A) In relation to any legal action or proceeding to enforce this agreement or arising out of or in connection with this agreement (proceedings) each of the parties irrevocably submits to the jurisdiction of the courts of England and Wales and waives any objection to proceedings in such courts on the grounds of venue or on the grounds that the proceedings have been brought in an inconvenient forum. [(B) These submissions shall not affect the right of a party to take proceedings in any other jurisdiction nor shall the taking of proceedings in any jurisdiction preclude any party from taking proceedings in any other jurisdiction.]]
[1725]

[16.3 (foreign party) irrevocably appoints (process agent) of (address) as its process agent to receive on its behalf service of process in any proceedings in England and Wales. Such service shall be deemed complete on delivery to the process agent (whether or not it is forwarded to and received by (foreign party)). If the process agent ceases to act, or becomes incapable of acting, as process agent, or no longer has an address in England and Wales, (foreign party) irrevocably agrees to appoint a substitute process agent acceptable to the other party and to deliver a copy of the new process agents acceptance of that appointment to the other party within 30 days18. [16.4 (foreign party) irrevocably consents to any process in any proceedings anywhere being served in accordance with the provisions of this agreement relating to the service of notices [but to become effective [30] days after the date of service deemed by clause 15.2]. This does not affect the right to serve process in any other manner permitted by law.]
[1726]

[AS (or) IN] WITNESS etc (see vol 12 (1994 Reissue) DECLARATIONS Form 90 [1691] et seq or Form 93 [1694] et seq) [SCHEDULE 1

DEEDS, AGREEMENTS AND

Allocation of work etc to be provided pursuant to the Principal Contract Part A To be provided by X Co (insert details) Part B To be provided by Y Co

(insert details)] SCHEDULE [2] The Management Committee Part A Composition of the Management Committee (insert details) Part B Names of first members of the Management Committee (list names) [Part C Categories of meetings to be minuted (insert details)]
[1727]

[SCHEDULE [3] Plant and tools to be provided Part A Plant and tools to be provided by X Co. Column 1 Column 2 (insert description of equipment) (insert amount to be paid by Y Co) Part B Plant and tools to be provided by Y Co. Column 1 Column 2 (insert description of equipment) (insert amount to be paid by X Co)

[SCHEDULE [4] Equipment to be obtained jointly from third parties Part A Equipment to be Hired (describe equipment) Part B Equipment to be Purchased (describe equipment)]
(signatures (or common seals) of both parties) (signatures of witnesses)
[1728]
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This form may be adapted for use by more than two parties. To illustrate the use of this precedent examples relating to a building project have been inserted throughout. The use of this precedent is not limited to the joint performance of building contracts. It is important to establish the nature of the business or the project which the parties have in mind, including the type of activity and its geographical scope, and the extent to which any party is committed by it to the exclusion of other similar activities. Whether this definition is required depends on the wording of clause 10.2 [1718]. Eg final measurement and valuation, liability to make good defects. The liability of the parties for breach of the joint venture agreement and their liability under the principal contract should be co-terminous and therefore it may be appropriate for the joint venture agreement to be under seal. It is assumed that the obligations under the principal contract are joint and several. In any event the parties must agree their respective areas of responsibility clearly. This assumes the principal contract contains provisions (see eg the JCT Standard Form of Building Contract 1980 Edition clause 13) whereby the nature quality or amount of work and materials to be supplied may be varied. It would be inconsistent with a joint venture between equals to permit one venturer to bind the other to amendments to the principal contract. [1729] The purpose of the management committee depends upon the extent to which liaison between the venturers is required. Thus, the committee may have an executive as well as a co-ordinating role and may then meet with greater frequency. A collection account will be required where the consideration under the principal contract is paid to the parties jointly on interim valuations or by stage payments. The purpose of clause 8.1 is to make provisions for adjustments between the venturers where, due to the fault by one or both of them, the performance of the principal contract is not satisfactory or some other claim arises. Care should be taken to harmonise these provisions with the termination provisions in the Principal Contract. See for example the JCT Standard Form of Building Contract 1980 Edition clause 27.

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The period of 7 days is within the 14 day period stipulated in the JCT Standard Form of Building Contract 1980 Edition. Care should be taken to harmonise the period of notice with the notice provisions (if any) in the principal contract. Specific advice should always be taken as to the tax treatment of the particular transaction, as the tax implications will vary according to the nature of the joint venture and the jurisdictions in which the parties are tax resident. Particular issues which may be relevant will include the following: (A) If one of the parties is non-UK resident for tax purposes and the other is not, consideration should be given to whether the UK resident party will be chargeable to UK tax on the profit share of the non-resident party as its agent. The indemnity in clause 13.1 [1720] will cover such tax, but if there is an agency for tax purposes then this wording could be expanded to further protect the agent. (B) If a withholding tax obligation is likely to arise, then consideration should be given as to whether the gross-up in clause 13.3 [1721] is appropriate. Where both parties are resident in the UK, the final words in clause 13.3 can normally be deleted. (C) If one of the parties is non-UK resident and the other is not, and both are under common control or part of a joint venture with 40% common ownership, then special care must be taken given the scope of the extended UK transfer pricing legislation: see the Income and Corporation Taxes Act 1988 Sch 28AA as inserted by the Finance Act 1998 s 108, Sch 16. (D) HM Customs & Excise might treat such an arrangement as registrable for VAT purposes as a partnership. It is advisable to use an arbitration clause except in the case of the simplest contracts. For use where either party is domiciled outside England and Wales. For an alternative procedure see clause 16.4 [1726]. [1730]

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