## Facts

- Robert H. Kessler and Richard Antinora executed a written joint venture agreement (Apr. 15, 1987) to buy a lot in Wayne, New Jersey, build a single-family home, and sell it.
- Kessler agreed to provide the necessary funds; Antinora agreed to act as general contractor and contribute services.
- The agreement provided that, after sale, Kessler would be repaid his cash contribution with interest, and net profits would be split 60% to Kessler and 40% to Antinora.
- The agreement did not address loss allocation or any obligation to share losses.
- The project ended in an overall loss; sale proceeds were insufficient to repay Kessler fully, leaving him with an unreimbursed cash loss.
- Antinora’s services over the project period were not separately valued or compensated.

## Issues

1. When a joint venture agreement specifies a profit split but is silent on losses, may the capital-contributing venturer recover a proportionate share of capital losses from the labor-contributing venturer?
2. To what extent do statutory partnership default rules on loss sharing apply when the parties’ agreement addresses profits and return of capital but omits loss allocation?

## Decision

- The Appellate Division reversed the summary judgment entered for Kessler and entered judgment for Antinora.
- The court held Antinora was not liable for any portion of Kessler’s unreimbursed capital loss.
- The court declined to apply the statutory default rule that losses follow profits because the parties’ agreement, properly read, did not impose mutual responsibility for each other’s contributions in the event of loss.

## Legal Principles

- Contractual terms governing a joint venture control over statutory partnership default provisions where the agreement reflects the parties’ allocation of risk.
- In a joint venture where one party contributes capital and the other contributes labor, and the agreement is silent on losses, each party bears the loss of his own contribution: the investor loses money; the labor contributor loses uncompensated services.
- Courts may refuse to impose loss-sharing obligations not expressed in the parties’ agreement, particularly where valuing uncompensated labor would be speculative.

## Conclusion

The court held that, absent an express agreement to share losses, a labor-only joint venturer is not required to reimburse the capital venturer for a portion of the capital loss, even if the agreement specifies a profit-sharing ratio.


Kessler v. Antinora, 279 N.J. Super. 471, 653 A.2d 579 (App. Div. 1995)