Proving Joint Ventures: The Importance of Shared Losses
Without an agreement between parties to share losses, a joint venture, and therefore a fiduciary duty and the breach thereof, may not be found to exist. In this edition of their Commercial Division Update, Thomas J. Hall and Judith A. Archer discuss recent decisions that provide insight on the application of this requirement of the sharing of losses.
December 16, 2021 at 12:00 PM
9 minute read
Justice Cardozo famously characterized one's fiduciary duty as imposing: "Not honesty alone, but the punctilio of an honor the most sensitive … ." Meinhard v. Salmon, 249 N.Y. 458, 464 (1928). In light of this heightened duty, it is not surprising that parties to disputes arising from commercial relationships often attempt to plead and prove that the parties had entered into a joint venture which, under New York law, imposes a fiduciary duty on the joint venturers. Not only does a joint venture expand the scope of duties owed beyond those that may be available for mere breach of contract, it may also open the door to tort damages, including punitive damages not available for breach of contract.
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