Partnership Agreement Template for Construction Businesses (UK 2025)
Last updated: February 2025
Why Construction Businesses Need a Partnership Agreement
Construction partnership agreements, often structured as joint ventures, govern collaboration between contractors for large projects that exceed the capacity or expertise of individual firms. These must address risk and profit sharing, site management responsibilities, plant and equipment contributions, and the joint insurances required. Construction JVs are common for major infrastructure projects and must comply with competition law requirements, particularly around information sharing between competitors.
Key Clauses for Construction
- Risk and profit sharing proportions and financial management
- Site management responsibilities and reporting structure
- Plant, equipment, and labour contributions from each partner
- Joint insurance arrangements and bond provisions
Common Mistakes
- Not establishing a clear management structure and decision-making process, leading to project delays from disagreements
- Failing to consider competition law implications when competitors form a joint venture for a specific project
Template Sections
- Risk and profit sharing arrangements
- Management structure and decision-making
- Resource contributions and financial management
FAQ
How should profit and risk be shared in a construction joint venture?
Typically proportional to each partner's financial contribution or the value of their resource commitment. Common models include equal sharing, proportional to equity contributions, or based on the scope of work each partner delivers. The agreement should address both profit distribution timing and how cost overruns are allocated, as these are the most common sources of JV disputes in construction.
Do construction joint ventures need competition law advice?
Yes, particularly when the JV partners are competitors who could independently bid for the same work. The agreement must ensure that information sharing is limited to what is strictly necessary for the project, that the JV does not facilitate price-fixing or market allocation, and that partners' independent businesses remain genuinely separate. Legal advice on Competition Act 1998 compliance is strongly recommended.
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Get Started FreeThis is guidance for UK businesses, not legal advice. Templates are illustrative. Consult a solicitor for complex matters.
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