In a joint venture, what is the duty of a managing venturer regarding opportunities that arise from the venture's position or within the scope of the venture?

• A. Secretly appropriate opportunities for personal gain
• B. Disclose and share opportunities with fellow venturers
• C. Only disclose opportunities if asked by a partner
• D. Avoid pursuing opportunities altogether

Answer: (B)

In a joint venture, the managing venturer bears a fiduciary duty of loyalty, which includes not taking for themselves opportunities that belong to the venture. If an opportunity arises from the venture’s position or falls within the venture’s scope, it is treated as a venture opportunity. The responsible course is to disclose that opportunity to the other venturers and offer it to the venture first, so the venture can pursue it collectively or determine how to proceed. This protects the venture from self-dealing and ensures fair treatment of all parties.

Secretly taking such opportunities for personal gain violates the fiduciary duty of loyalty. Being passive and waiting to be asked to disclose, or avoiding opportunities altogether, also fails to meet the obligation to act in the venture’s best interests.