Stage 05 · Pitfalls

No Deadlock Clause in JV Agreements

Trapped in your own joint venture

Without a pre-agreed deadlock mechanism, a JV dispute can lock the minority foreign partner into the entity indefinitely.

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No Deadlock Clause in JV Agreements

Trapped in your own joint venture

The wrong assumption: “We trust our partner — we'll figure it out if there's a problem.”

The same trust that made the deal easy makes the exit impossible. Without Russian roulette, Texas shootout, or put/call options, capital can be trapped in an entity you cannot control, sell, or leave.

The right approach: Insist on deadlock and exit provisions at the JV-agreement stage, not as an afterthought. The clause you negotiate in good faith in year one is the clause that protects you in year five.

What we cover
  • Russian roulette / Texas shootout
  • Put and call options
  • Exit valuation formulas
  • Tag-along and drag-along rights
Typical deliverables
  • Deadlock mechanism drafting
  • JV agreement review
  • Exit clause design
JVDeadlockExit Mechanisms

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