By Gustavo Adolfo Gómez Ferré, lawyer in Barcelona with a law degree from the Universitat de Barcelona, member of the Il·lustre Col·legi de l’Advocacia de Barcelona and founder of the Barcelona law firm Bufet Gómez Ferré.
In the current context, strategic alliances and joint ventures have become a common formula for the growth and expansion of companies in Spain. However, the breach of commercial agreements or joint ventures can have serious economic and legal consequences: financial losses, conflicts between partners, reputational damage and stalled projects.
If your company suffers a breach of a commercial agreement or unjustified termination, at BUFET GÓMEZ FERRÉ we are lawyers specialised in resolving conflicts between partners and compensation for breach of contract, and in this blog article we explain how you can proceed in each case.
What is a commercial alliance and a joint venture
A commercial alliance is an agreement between companies to collaborate on a common project, without necessarily forming a new company. A joint venture, for its part, can be contractual, based solely on a collaboration agreement, or corporate, when an independent company is created to manage the joint business.
Common objectives include sharing risks, combining resources, accessing new markets or developing innovative products. In Spain, these operations are regulated by the Commercial Code, the Capital Companies Act and the regulations applicable to commercial contracts, making it essential to have clear contracts and commercial agreements that define obligations, responsibilities and conflict resolution mechanisms.
Most common causes and legal consequences of the breakdown of commercial alliances and joint ventures
The breakdown of commercial alliances and joint ventures can arise for multiple reasons affecting both the viability of the project and the relationship between partners. Before considering them as grounds for a claim, it is important to be clear that the following cases are common examples of breakdown:
Any of these situations may give rise to the need to claim compensation for contractual breach and detecting them in time will allow you to act preventively and prepare a solid claim. Among the most common legal consequences of a breakdown are:
Acting quickly and in a planned manner increases the chances of obtaining a successful compensation for unjustified termination of negotiations. It is therefore advisable to have a legal strategy designed by lawyers specialised in conflicts between partners and companies, ensuring that the claim for damages is supported by legal means and adequate documentary evidence.
How to protect your investment in the event of a commercial alliance breakdown
Protecting your investment in the event of a breakdown of a commercial alliance or joint venture requires anticipation and solid supporting evidence. To minimise risks and secure your rights, follow these steps:
- 1. Review contracts and shareholder agreements
Carefully analyse clauses on early termination, penalties, exclusivity, drag-along, tag-along and non-competition to understand your rights and obligations.
- 2. Gather and organise evidence
Keep emails, financial reports, delivery notes, meeting minutes, audits and any communication that demonstrates compliance or non-compliance with contractual obligations.
- 3. Design a preventive legal strategy
Plan orderly exit mechanisms, business mediation or arbitration before conflicts arise, avoiding economic losses and reputational problems.
And of course, having a lawyer specialised in compensation for termination of distribution contracts or joint ventures will allow you to get advice and get ahead of conflicts, protecting your investment before serious losses materialise.
Legal avenues to resolve the conflict based on a practical case (fictional example)
This example helps to understand how such a situation could affect any company that relies on a commercial alliance:
Suppose that two companies create a joint venture to develop industrial software, with a joint investment of €500,000 and an exclusivity agreement preventing either party from marketing similar projects for 3 years. One of the companies breaches the agreement and signs a parallel contract with a third party for €200,000, generating direct economic losses and blocking additional sales opportunities worth €150,000 to existing clients.
Depending on the case, different legal avenues can be used to address the matter:
- Negotiation and business mediation: allows conflicts to be resolved quickly, avoiding high litigation costs and maintaining the commercial relationship if it is still valuable.
- Commercial arbitration: recommended when the contract includes an arbitration clause, guaranteeing a binding and more agile resolution than judicial proceedings.
- Judicial claim: ordinary procedure for breach of contract or corporate liability, which may include precautionary measures if concealment of assets or diversion of funds is feared.
Legal strategy applied in this case:
- Detailed review of the contract and collection of documentary evidence: emails, financial reports, meeting minutes and audits that prove the breach and quantify the losses.
- Attempt at out-of-court negotiation through business mediation, proposing compensation for the €350,000 in calculated losses and partial resolution of the agreement.
- If no agreement is reached, filing a judicial claim for compensation for loss of profit (€150,000 for blocked business opportunities) and compensation for direct damages (€200,000 from the parallel contract).
Expected outcome: Obtaining compensation covering economic losses and loss of profit, as well as resolution of the agreement with guarantees of protection against future breaches.
Prevention for the future — to avoid similar conflicts in other joint ventures or commercial alliances, it is recommended to:
- Clear and complete drafting of contracts and commercial agreements.
- Prior due diligence on the partner’s solvency, track record and background.
- Establishment of orderly exit mechanisms, notice clauses and penalty clauses for breach.
- Periodic reviews of compliance with obligations and internal audits.
Adopting these measures helps to minimise risks, anticipate conflicts and act with legal certainty, ensuring that any claim for damages is backed by solid evidence and an effective legal strategy. Although this example is fictional, it reflects real situations that we have successfully managed for some of our B2B clients in alliances and joint ventures, demonstrating our experience in protecting investments and resolving business conflicts.
Frequently asked questions
Yes, you can claim damages, including loss of profit, consequential damage and loss of opportunity, provided the breach of the agreement or shareholder pact is proven.
Both direct damages (such as losses arising from parallel contracts or specific breaches) and loss of profit (benefits that were not obtained due to the breakdown of the alliance) can be claimed. Accurate quantification requires review of contracts, financial reports and evidence of blocked business opportunities, in order to present a solid and effective claim.
The absence of a clear agreement complicates the claim and increases risks. Legal advice is recommended to interpret the existing contract and maximise the protection of your rights.
The duration depends on the avenue chosen and the complexity of the case. Business negotiation or mediation can be resolved in a few weeks or months, while a judicial claim can take between 6 and 18 months, depending on evidence, precautionary measures and court workload.
It depends on the contract and the relationship with the other party. Commercial arbitration is faster and confidential, while the judicial route offers greater enforcement power and the possibility of precautionary measures.
Free lawyer consultation – Lawyer specialised in conflicts between partners Bufet Gómez Ferré
Free lawyer consultation: if your company is facing the breakdown of commercial alliances or joint ventures, you can send your free initial consultation to our commercial law and partner conflicts law firm.
We will analyse your case, evaluate the viability of the claim and design the most appropriate legal strategy to protect your investment and claim compensation for breach of contract or damages.