Looking for advice on this situation. JV Partner Taking 60% Profit When Agreement Says 50/50 Any guidance would be greatly appreciated.
Details: I'm in a situation where I need to understand my legal options. Has anyone dealt with something similar?
In my experience, most contract disputes settle before trial. The key is having strong documentation of the original agreement and any modifications. Email trails are your best friend.
Always get contract modifications in writing. Verbal modifications are theoretically enforceable in some situations but nearly impossible to prove. A quick email confirmation costs nothing and saves everything.
In my experience, most contract disputes settle before trial. The key is having strong documentation of the original agreement and any modifications. Email trails are your best friend.
The enforceability of this clause depends heavily on your state's law and the specific language used. I'd recommend having an attorney review the exact wording before taking action.
The enforceability of this clause depends heavily on your state's law and the specific language used. I'd recommend having an attorney review the exact wording before taking action.
Always get contract modifications in writing. Verbal modifications are theoretically enforceable in some situations but nearly impossible to prove. A quick email confirmation costs nothing and saves everything.
The UCC governs sale of goods contracts; common law governs services. The rules are different. Make sure you're looking at the right framework for your situation.
In my experience, most contract disputes settle before trial. The key is having strong documentation of the original agreement and any modifications. Email trails are your best friend.
Good discussion. Tagging this for the resource library.
Update: Thanks everyone for the guidance. I consulted with an attorney and we're moving forward. The advice here helped me understand what questions to ask and what to expect. Will update when there's a resolution.
Entered a 50/50 JV for a real estate development. I brought the capital ($500K), partner brought the expertise and labor. Profits were supposed to split 50/50 after return of capital. Now the project is complete, sold for a profit, and my partner is claiming his "sweat equity" should offset against profits before the split.
Our JV agreement says "profits split equally after return of contributed capital" but doesn't define what counts as "contributed capital" — is sweat equity a capital contribution? I don't think it is, but he's insisting.
This dispute hinges on contract interpretation. In most jurisdictions, "contributed capital" typically refers to cash or property contributions, not services/labor, unless the agreement specifically includes services as capital contributions. The UPA (Uniform Partnership Act) and most LLC statutes distinguish between capital contributions and service contributions.
If your agreement uses the term "contributed capital" without defining it to include labor/services, you have a strong argument that the plain meaning applies — cash only. Your partner's labor was compensated through the profit split, not through a capital account credit.
However, if your partner can show evidence that the parties intended sweat equity to count (emails, meeting notes, prior dealings), a court might look beyond the contract language. This is why mediation often works well for JV disputes — a neutral third party can evaluate the equities faster and cheaper than litigation.
Just wanted to add — I went through almost the exact same thing last year. What finally resolved it for me was sending a formal demand letter via certified mail. Once they realized I was serious and had documentation, they settled within 2 weeks.
Three things I wish I knew before my dispute: (1) Save copies of all communications in multiple places, (2) Send important correspondence via certified mail with return receipt, (3) Keep a detailed timeline of events. These three things won my case.