The Idaho Supreme Court handed down a decision distinguishing a partnership from a joint venture. In Costa v. Borges, 179 P.3d 316 (Idaho 2008) the court dealt with a dispute between two real estate developers who had an oral agreement to develop some property. The Court followed the general rule that a partnership is formed to carry on a business generally and a joint venture has but a single business purpose.
The upshot of the holding is a joint venture cannot avail itself of the portion of the Revised Uniform Partnership Act that views a partnership to be an entity distinct from its partners and permits a partnership to continue after dissociation of a partner. The Court also confusingly notes that RUPA should be applied to resolve the case, but then pointedly does not.
Iowa law is similarly confusing.
In Fitzhugh v. Thode, 265 N.W. 893 (Iowa 1936) the Iowa Supreme Court, said that "although courts in modern times do not treat a joint venture as identical with a partnership, it is so similar in its nature and in the contractual relationships created by such adventure that the rights as between themselves are governed practically by the same rules that govern partnerships. As some of the courts hold, while a partnership is ordinarily formed for the transaction of general business of a particular kind, a joint adventure, as a rule, relates to the single transaction, although it may comprehend a business to be continued for a period of years."
In Beck v. Rounds, 332 NW 2d 109 (1982) the Iowa Court of Appeals said "We also agree with the agency's finding that petitioners were engaged in a partnership and/or joint venture. The district court noted that petitioners had an agreement in which they pooled their money, their farm equipment, their labor and skill in the farming operation, and that they agreed to divide the profits and share the losses....A joint venture is characterized as a business enterprise carried on for profit, and as a common undertaking in which the parties combine their property, money, efforts, skill or knowledge. A joint venture relates to a single transaction, whereas a partnership, having the above characteristics, relates to a continuing business [cite omitted].... The business relationship of Glenn and William Beck can be characterized as either a joint venture or a partnership...."
The obvious point is avoid oral agreements!
-Marc Ward
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