Joint ventures: settle the exit before you settle the logo

Parties come to us enthusiastic about a joint venture and impatient about the paperwork. The contributions are clear, the shareholding is agreed, and everyone wants to begin. The provisions that decide whether the venture survives a disagreement are the ones drafted last, or not at all.

Four questions do most of the work. What happens if the board is split. How is a departing party's interest valued and by whom. What is each party actually obliged to contribute, and by when. And who owns what the venture creates — land, licences, intellectual property — if it stops.

Nigerian corporate practice offers perfectly workable answers: deadlock mechanisms, pre-emption rights, put and call options, an agreed valuation method rather than an agreed valuer's discretion. They cost very little to include at the start and are unobtainable once relations have broken down.

We draft joint venture documents so a client can see, on one page, what happens on the worst day of the venture. If that page is uncomfortable to read, the deal terms need revisiting, not the drafting.