Legal Updates

A joint venture may create a partnership even in lack of a written agreement

March 6, 2023
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A person who established a platform for the placement of senior English-speaking employees in senior positions in Israel, contended the existence of a business partnership, or at the very least, a joint venture, between him and his friend, on the basis of which he is entitled to accounting for the profits and the expenses of the venture.

The Court held that the parties established a partnership relationship within the framework of a joint venture and therefore the creator of the platform is entitled to account for the profits of the venture. A joint venture is a situation defined as close to a partnership relationship, in which a business establishment is carried out in the ordinary course of business. In order to establish the existence of a joint venture, there must be an organization in contract, either express or implied, indicating the intention of the parties to cooperate within a defined business initiative for a common purpose, while sharing resources, profits and losses. Here, while there was no written agreement between the parties, there was an implied agreement between the parties, for a specific project, while dividing roles and resources and the parties referred to each other as partners over the years. Therefore, there is no doubt that the parties have established a joint venture which gives the creator of the platform a right for accounting for the profits of the venture.

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