Friday, January 10, 2014
Party Relationships: Contract Form Can Dictate
When parties go into relationships they often think the relationship is one thing; but legally the relationship may be another. Judge Hughes' recent decision in the case of PEAC Consulting, LLC v. The Ridley Group & Associates, et al., decided September 20, 2013 (CL12-4821, Richmond Circuit Court) emphasizes the importance to the relationship question of the documents and titles actually used by the parties themselves when they create the relationship. In that case, the plaintiff claimed there was a joint venture relationship with another company in seeking award of a public procurement; however, the trial court disagreed because the proposal that was submitted to the public body identified the parties as "two primary subcontractors." While the court allowed plaintiff's claims to proceeds on other basis, the distinction between joint venturers and subcontractors can be significant; particularly with respect to rights, obligations, and damages. Bottom line, what you call yourself matters, so carefully chose your words, and seek appropriate legal counsel regarding the legal consequences, advantages, and disadvantages of what you could or do choose.