- People enter into contracts with other parties sometimes unknown to them
- Always get legal advice
- If in doubt walk away with your money in hand
People enter into contracts to buy/develop/subdivide/option/joint ventures with other parties sometimes unknown to them
Do a due diligence on the other partner to avoid any problems
Never prepare your own agreement and always get legal advice
Case study
Sam wished to become involved in developing property. Sam had no experience in that area. Sam met Simon who was a builder who Sam barely knew
Sam signed a Joint Venture Agreement with Simon (prepared by Simon from an online precedent) which favored Simon.
There were no safeguards or breach/arbitration clauses or other clauses to protect him.
Sam was advised that by litigating he would be throwing good money away and litigation would be costly and no guarantee he would succeed.
He lost his money
Take aways…
Do a due diligence and background check on your proposed partner
Get references from other clients of your potential partner, and check the project is financially viable.
Ask for details of other projects they were involved with and their experience. Make sure you get your accountant to check their financial standing.
Check if they own the property involved and get legal advice to ensure your rights are protected and to verify information.
Never try and save money by preparing your own contract.
If in doubt walk away with your money in hand.
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