Difference between Joint Venture and Partnership
It is critical under the law of equity to know whether a joint venture or a partnership has been created as it imposes additional fiduciary duties or obligations on the partners. These additional obligations have traditionally been regarded as not applicable to the joint ventures as joint ventures are different from the partnerships (Hernan 2003). Traditional view has its base in the fact that at arm’s length joint ventures are more like the parties who on commercial terms that are in a contract.
The fiduciary obligations in Australia which are imposed are known as duties of loyalty. This in terms of partnership means that a partner can’t:
· Out of an opportunity which came to a partner of the firm, he/she can’t make profit out of that opportunity.
· The partner is not allowed to engage in an undisclosed conflict of duty, which means that he /she can’t act in situation where the duty of the person to the partner is in conflict with the own interests of the person. Moreover, such circumstances in which the partner has a conflict amongst its duty to another third party are also not allowed to be engaged.
The fiduciary duties which are also known as fiduciary owed by a person could only be enacted in specific conditions with a full learnt agreement to the partners involved.
This was not the case in some of the cases in the Australia. One of such cases was that of Farah. The facts of the case were as follows: