Summary: C101™ – 2018 Joint Venture Agreement for Professional Services





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Changes from the previous edition

Dispute Resolution—Mediation and Arbitration



AIA Document C101–2018 is intended for use by two or more parties to provide for their mutual rights and obligations in forming a joint venture. It is intended that the joint venture, once established, will enter into an agreement with the owner to provide professional services. The parties may be all architects, all engineers, a combination of architects and engineers, or another combination of professionals. This agreement sets forth the provisions establishing the governance rules for the joint venture and the parties’ relative ownership interest in the joint venture. For use and execution of a document, see its instructions  » 



AIA Document C101–2018, Joint Venture Agreement for Professional Services, is intended to be used by two or more parties to provide for their mutual rights and obligations. Parties may be all architects, all engineers, or a combination of architects and engineers. The Joint Venture Agreement is not the agreement to provide professional services on the Project. It is an organizing document for the operation of the Joint Venture relationship. The Joint Venture, once established, will enter into a Client or Owner/Architect agreement with the Client to provide professional services for the Project.

A joint venture is an undertaking by two or more entities to jointly perform a single contract. A joint venture can be established by creating a new legal entity, separate and apart from its participants, or through a contractual relationship that does not create a separate legal entity. This Agreement is intended to create a joint venture through a contractual relationship and does not create a separate legal entity.

It should be noted that joint ventures create risks that the Parties must be aware of. For example, a joint venture can be construed as a general partnership, which creates a unique set of legal obligations for the parties to understand. Additionally, joint venture parties have joint and several liability for the obligations and liabilities of the joint venture. This means, for example, that unless the joint venture agreement says otherwise, it is irrelevant whether a party’s actions led or contributed to a claim against the joint venture; any Party to the joint venture can be held responsible for the full amount of the claim against the joint venture. So, if one of the two parties to a joint venture is unable to contribute any funds to pay off a claim against the joint venture, the other party is still responsible for paying the full amount, even if it did not have any role in the actions that ultimately led to the claim. This is a unique characteristic of joint ventures with significant implications to those undertaking a joint venture. Accordingly users should engage the advice of legal, tax, and insurance counsel when using this document in order to fully understand and appreciate the risks of forming a joint venture.

Users should also understand that there are a number of ways to structure a joint venture relationship between design professionals. Therefore, in order to more effectively utilize this document, it helps to be aware of a number of the assumptions made herein regarding the relationship between the parties. Additionally, understanding these assumptions will help users identify possible changes that must be made to the standard language if their joint venture circumstances vary from these assumptions.

  1. This is a project-specific relationship. It is not intended to create an on-going business entity. This agreement, and the joint venture, will cease to exist if the joint venture is unsuccessful in obtaining the project or, if it does get the project, upon completion of the project.
  2. The joint venture will enter into a design agreement with the client for a lump sum amount. Because payments made by the Client to the Joint Venture will essentially be passed through to the Parties, a lump sum design contract allows for a relatively straight forward pass-through payment process. The Parties are able to negotiate at the outset how they will share in each progress payment.
  3. The joint venture will not retain any consultants for the project directly. The Parties will retain the consultants. Such a structure aids in the operation of the indemnity provisions set forth in this agreement because liability arising from a consultant’s performance can be traced directly to one of the Parties. If the joint venture is to retain any consultants, the operation of the indemnity language in this agreement would require significant revision.
  4. The Parties’ interest in the joint venture may not be equal. Depending on the anticipated role the Parties will play on a project, they may carry a larger or smaller share of the joint venture.
  5. While the Parties’ interest may not be equal, joint venture decisions require unanimity. Because joint and several liability is assumed by each party, C101-2018 establishes the Parties on equal footing with regard to the decisions impacting the joint venture. Each Party has the same number of representatives on the joint venture’s Policy Board.


This document is not directly linked to any other AIA document, however, any of the AIA’s Owner-Architect and Architect-Consultant agreements can be used by the joint venture once it is created.


Changes from the previous edition.

Article 3 – Policy Board and Management of the Joint Venture

This article has been significantly revised in an effort to provide greater clarity on the role and authority of the Policy Board to run, and make a decision on behalf of, the Joint Venture. Article 3 now clearly states that Policy Board will make decisions on behalf of the Joint Venture and explicitly delineates a list of duties falling to the Policy Board.

One of those duties includes the appointment of a Project Director, formerly referred to as the Project Manager. The role of the Project Director is similar to that of the Project Manager, however, the updated document is more explicit with regard to the Project Director’s responsibilities. It is expected that the Project Director will be an employee of one of the Parties.

Article 4 – Financial Matters and Accounting

Article 4 calls for one of the Parties to serve as Project Accountant. Unlike the 1993 edition, the updated document provides more detail on the Project Accountant’s responsibilities, including the obligation to regularly meet with the Policy Board to provide a financial report, which includes an inventory and accounting of the Joint Venture’s assets, liabilities, receipts, and disbursements. The Project Accountant is also tasked with the obligation to file tax returns and arrange for payment of any taxes or related fees.

In addition to the obligations on the Project Accountant, Article 4 also places certain obligations on the Parties with regard to Joint Venture finances. Each Party is required to maintain accounting records distinct from those maintained by the Joint Venture relating to costs and expenses it charges to the Joint Venture. Additionally, each Party is required to maintain those records for time period established by the Policy Board and provide the other Party’s reasonable access to those records.

Article 5 – Capital Contributions

Significant additions have been made to the Capital Contributions provisions in this agreement to address the circumstances when one party is unable to meet its obligations to provide capital to the Joint Venture. Under Section, if a Party is unable to make its contribution, the Parties can advance funds to cover the deficiency. The Parties advancing funds shall receive interest on the funds advanced accruing from the time the funds are advanced and continue to the time of their repayment. Thereafter, the Party or Parties advancing the funds shall be repaid in full from the subsequent distributions of monies received from the Client under the Prime Agreement before any payments are made to the other Parties. The interest paid for funds advanced, however, shall only be charged against the Party that failed to meet the capital call.

Article 8 – Public Relations and Professional Credit

This article adds new language relating to both public relations and professional credit for the services provided by the Parties. To the extent any public statements related to the Project are required, any public statements shall be subject to the Policy Board’s prior approval. After completion, any such statements are subject to the Parties prior approval. The purpose of these obligations is to ensure that the Joint Venture speaks with a unified voice.

In the new Article 8 language, the Parties agree that professional credit shall be attributed to the Joint Venture for the Project. Additionally, the Agreement allows the Parties to agree on how professional credit and attribution will be provided to the individual Parties and Consultants, if any.

Article 9 – Insurance

This article has been substantially rewritten to be consistent with the current insurance industry.

Article 10 – Commencement and Termination

This Article has been revised to address in more detail the Joint Venture’s options when one Party fails to substantially perform.

Article 11 – Dispute Resolution

Article 11 has been revised to add a step to the dispute resolution process prior to submitting claims to mediation and binding dispute resolution. Due to the nature of a single project joint venture, it is important that claims be resolved as quickly as possible so the joint venture can continue with completion of its services on the Project. To the extent the Policy Board is unable to reach a unanimous decision on a matter, Section 11.2 now requires the matter be escalate beyond the Policy Board to a Dispute Resolution Committee as a final effort to resolve a matter before it proceeds to formal mediation and binding dispute resolution. Members of the Dispute Resolution Committee should be members of senior management from each party such as the chief executive or president. If the Dispute Resolution Committee is unable to reach a unanimous decision on the matter, it will then be subject to mediation and binding dispute resolution.

Mediation remains as a condition precedent to any form of binding dispute resolution, but binding arbitration is not mandatory for disputes that fail to settle in mediation. Instead, the parties are required to select at Section 11.3.4 from three choices of binding dispute resolution. If the parties do not select a method of dispute resolution, the default method of dispute resolution is litigation. This is to ensure that any waiver of the Constitutional right to a jury trial is explicit. Of course, if the parties choose litigation, they may always agree later to subject disputes to arbitration instead.

The AIA takes the position that selection of a method of dispute resolution such as arbitration is essentially a business decision. Although arbitration is intended to be quicker, less complex and more convenient than litigation, each case has unique factors that may negate some or all of these benefits.

The C101–2018 document is much more permissive in allowing consolidation of arbitrations than the 1993 version. C101–2018 permits the Parties to consolidate an arbitration with any other arbitration they are engaged in as long as the three enumerated conditions are met. In addition, once an arbitration is consolidated into an arbitration between the Parties, any party to the consolidated arbitration may further consolidate the proceeding with other arbitrations it is involved in, subject to the three conditions.

As with consolidation, the joinder provisions in C101–2018 have been revised to make joinder of additional parties easier. C101–2018 permits a party to an arbitration to join a third party so long as the issue with the third party involves a common question of law or fact, the third party’s presence is necessary to accord complete relief and the party sought to be joined agrees to the joinder. This closely resembles the rules for permissive joinder found in litigation.

The updated provisions on consolidation and joinder are intended to facilitate the orderly resolution of disputes and to avoid the need for multiple arbitrations involving the same issues but involving claims between project participants.

Article 12 – Indemnification

Because of the joint and several liability imposed on each Party to the Joint Venture, Article 12 attempts to allocate responsibility among the Parties for the Joint Venture’s liabilities based on their comparative fault. Section 12.1.1 requires each Party to indemnify the others from claims by third parties to the extent those claims are the result of a Party’s (or its consultant’s) negligent performance of professional services. The intended result is that if, for example, the Client brought a claim against the Joint Venture because the structural engineering Party to the Joint Venture performed its services negligently, the structural engineering Party, would be required to pay the damages as a result of the indemnity. This provision would not avoid the Parties joint and several liability to the client but would give the non-negligent Parties recourse against the negligent Party or Parties that caused the damages.

It is possible, however, for the Joint Venture to incur liability unrelated to its professional services. In that instance, Section 12.1.2 requires the Parties to indemnify one another for any such liability arising from that party’s acts or omissions, including those of its consultants.


Dispute Resolution—Mediation and Arbitration. 

This document contains provisions for mediation and arbitration of claims and disputes. Mediation is a non-binding process but is mandatory under the terms of this agreement. Arbitration may be mandatory under the terms of this agreement. Arbitration is binding in most states and under the Federal Arbitration Act. In a minority of states, arbitration provisions relating to future disputes are not enforceable but the parties may agree to arbitrate after the dispute arises. Even in those states, under certain circumstances (for example, in a transaction involving interstate commerce), arbitration provisions may be enforceable under the Federal Arbitration Act.

The AIA does not administer dispute resolution processes. To submit disputes to mediation or arbitration or to obtain copies of the applicable mediation or arbitration rules, contact the American Arbitration Association at (800) 778-7879 or visit the website at

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