Legal Updates

A participation in a joint venture does not grant a right to receive accounts if no partnership relationship existed between the parties

May 4, 2024

A college and a private person established a joint venture in which a pest control course was offered at the college. The college financed the course and also undertook to bear the losses, while the person built the course structure. The person contended that he did not receive the profits he was entitled to from the venture and demanded to receive information on the income and expenses of the venture, by virtue of partnership relations between the parties.

The Court held that the person has no right to receive the accounts. For the receipt of accounts, the existence of a special relationship between the parties is required, such as a partnership, as well as a legal right regarding the accounts. A principal condition for the existence of a partnership is participation in losses. In addition, the manner of presenting the relationship to the public and investing funds in the project shall also be reviewed. Here, the person's duties were limited and included administrative duties, while the college invested money in the venture and bore full risk of losses by itself. Therefore, there was no partnership relationship between the parties and the person is not entitled to receive accounts.