Alpha Communications, a partnership, publishes consumer periodicals, including Science Today. Beta Publications, also a partnership, publishes professional periodicals, including Technology Review. Alpha and Beta agree to pool their resources in a one-time deal to print and market a book, Unlimited Future. In contracting with Gamma Printing Supplies, Inc., for paper to print the book, Alpha commits fraud. In contracting with Delta Literary Agency for articles to use in Technology Review, Beta commits fraud. Gamma and Delta file suits against Alpha and Beta. What type of business organization has Alpha and Beta formed? To whom, if anyone, is Alpha liable? To whom, if anyone, is Beta liable?
What will be an ideal response?
Alpha and Beta formed a joint venture. Alpha is liable to Gamma, but not to Delta. Beta is liable to Gamma and Delta. A joint venture is an association of two or more business entities that combine their efforts or property for a single transaction or a series of related transactions or projects. This is what Alpha and Beta did: they combined efforts to undertake a single project, the publishing of the book Unlimited Future. Each joint venturer is liable to a third party for the actions of the other members of the joint venture in pursuit of the enterprise's common goal. Each member is not liable to a third party for the actions of other members pursuing their own separate interests. In this question, Alpha and Beta are each liable for Alpha's fraud to Gamma, because it was committed in pursuit of their common enterprise. Only Beta is liable for Beta's fraud to Delta, however, because the fraud was committed in pursuit of Beta's interest only.
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