# Inside the JV Agreement: What the Contract Says
The **JV agreement** is the contract *between the partners* (separate from the prime contract you both sign with the owner). It is the single most important document in the venture. Have a construction attorney draft it. Here's what it covers and why each part matters.
## The core terms
- **Purpose & scope** — the *one* project this JV exists for. Keep it narrow.
- **Term** — when the JV starts and ends (usually through final completion, warranty, and closeout).
- **Ownership / participation %** — each partner's share (e.g., 70/30). This usually drives profit, loss, and voting.
- **Contributions** — exactly what each partner puts in: **capital, equipment, key personnel, bonding, licenses, working capital.**
- **Management** — who runs it day to day. Most JVs use a **management/policy committee** with representatives from each partner, and often name a **sponsor / managing partner** who handles the books and the owner relationship.
- **Bank accounts & accounting** — a dedicated JV bank account, who can sign, how books are kept, audits.
- **Profit & loss sharing** — how money is split (often by participation %), and how **cash calls** work if the job needs more money.
- **Liability & indemnification** — how the partners allocate responsibility *to each other* (the owner still sees you as jointly liable — see the next lesson).
- **Insurance & bonding** — who provides what; how the surety indemnity is shared.
- **Dispute resolution** — how partners settle disagreements (mediation/arbitration) without blowing up the project.
- **Default & termination** — what happens if a partner can't perform, goes bankrupt, or walks.
- **Non-compete / confidentiality** — partners don't poach the project or each other's people.
## Practical advice
- **Name the key people.** "Partner A provides the project manager; Partner B provides the superintendent." Vague staffing promises cause fights.
- **Define decisions that need unanimous vote** (e.g., change orders over $X, hiring/firing the PM, settling claims).
- **Plan the exit before you start.** The cleanest JVs spell out, up front, how a partner can be removed and how the venture winds down.
**Takeaway:** Get the JV agreement in writing, name the key people, and plan the exit before you start.
> Reminder: this is educational. A JV agreement is a serious legal contract — use an attorney experienced in construction joint ventures, and a CPA for the tax and accounting structure.
