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What Is a Joint Contract?

Joint contracts involve multiple parties on one side of the agreement.
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  • Written By: Charity Delich
  • Edited By: Bronwyn Harris
  • Last Modified Date: 18 March 2014
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    Conjecture Corporation
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In contract law, a joint contract is a type of oral or written agreement in which two or more parties on one side of the agreement consent to be responsible for something as a collective unit, rather than as individuals. Joint contracts are frequently formed when multiple parties promise to be jointly liable for performing certain duties and obligations, such as repaying outstanding debts or delivering goods and services. Alternatively, a joint contract can also be created when two or more parties on one side of an agreement are equally entitled to enjoy all of the rights and benefits stemming from another party’s promise, such as collecting on a debt or receiving a shipment of goods.

Joint contracts commonly arise in lease agreements. For example, Suzy and Jane are roommates and enter into a joint contract in which they collectively agree to pay John, who is the landlord, $1,000 US Dollars (USD) each month for rent. Suzy and Jane agree, outside of the contract, that they will each pay half of the monthly payment. If Suzy fails to pay her $500 USD share, John can pursue both Jane and Suzy for Suzy’s share because they are jointly liable for the entire $1,000.

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The parties making a joint promise are generally called promisors, and the parties receiving the benefit of a joint promise are usually referred to as promisees. Typically, a promisee can choose to enforce a joint contract against only one of the promisors or against all of the promisors. In most circumstances, a promisee is permitted to receive only one award for the total amount owed.

As a general rule, when a party to a joint contract dies, that party’s rights pass on to the surviving joint party or parties. Similarly, the deceased party’s obligations typically flow through to the remaining party or parties. For instance, in the rent example above, if Suzy died, Jane would be solely responsible for paying John the $1,000 USD each month until the lease is up. If all of the joint partners die, any obligations or rights are customarily given to the last surviving partner’s estate.

A joint contract is different from an individual or several contract. In a several contract, a party is only responsible for keeping the promises that he or she makes. He or she is not liable for performing on promises made by another party to the contract. Additionally, each party is only entitled to receive rights specifically promised to him or her.

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