JV Agreements in Georgian Law
A contractual joint venture — where several parties run a common project by contract rather than by creating a new legal person — is written in Georgian law through the Civil Code. Freedom of contract gives the parties the architecture of the agreement, common ownership builds the property layer, agreement on essential terms sets the mandatory barrier, the conditional transaction carries options and milestone triggers, and the assumption of debt resolves the allocation of liabilities. At the same time, an equity joint venture — as an LLC or a JSC — is formed under the current Law on Entrepreneurs: the founders' agreement and the charter live there. The Civil Code carries the contractual JV and its option-exit architecture.
Freedom of Contract and Its Limits
Subjects of private law may, within the limits of the law, freely conclude contracts and determine their content. They may also conclude contracts not provided for by law but not contrary to it — it is on this norm that the JV agreement stands as a construction agreed by the parties. An exception concerns only the case where, for the protection of the essential interests of society or a person, the validity of a contract depends on state permission — then this must be regulated by a separate law. At the same time, a party holding a dominant position on the market bears, in that sphere, the obligation to conclude contracts and may not groundlessly offer non-equivalent terms; nor may a person acting within entrepreneurial activity unjustifiably refuse to contract with persons acquiring goods or services for non-entrepreneurial purposes or vital needs. These rules also discipline the negotiation balance of a joint venture.
Common Ownership — the Layer of Joint Assets
The property foundation of a joint venture is common ownership: it arises as joint and shared ownership, by force of law or on the basis of a transaction. Each co-owner may present claims to third persons in respect of the property in common ownership, and has the right to reclaim a thing only for the benefit of all co-owners. A thing in common ownership may, by agreement of the co-owners, be pledged or otherwise encumbered for the benefit of one of the owners; the costs of maintenance and preservation are borne by the co-owners equally, unless law or contract provides otherwise. The pre-emptive right to acquire a share in common ownership may also be defined by agreement of the parties — in a JV agreement this instrument is the means of controlling the choice of partner.