South Africa
Consortium Agreement
R1 499
Create a clear consortium agreement for two or more parties working together on a tender, project, contract, bid, research initiative, or commercial opportunity while recording each party’s role, contribution, liability, profit share, authority, and exit terms.
A Consortium Agreement is used where two or more parties combine their resources, expertise, capacity, credentials, or funding to pursue a specific project, tender, bid, contract, grant, research programme, construction project, technology project, or commercial opportunity. It is similar to a joint venture agreement, but is often used where the parties remain separate organisations and collaborate for a defined purpose without necessarily creating a new company. The agreement should regulate the lead member’s authority, member contributions, work allocation, decision-making, profit or revenue sharing, liability, bid submission, performance obligations, confidentiality, intellectual property, B-BBEE or procurement commitments, disputes, termination, and post-project close-out.
South African legal context (2026 checklist)
A consortium agreement should clearly state whether the consortium is merely a contractual collaboration, an unincorporated joint venture, a partnership-like arrangement, or a newly incorporated company. This affects authority, liability, tax, accounting, procurement compliance, and third-party risk. In tender contexts, the agreement should align with the tender conditions and should avoid misrepresenting capacity, experience, B-BBEE status, subcontracting commitments, local-content undertakings, or who will actually perform the work. If members are actual or potential competitors, the agreement should be checked for competition-law risks such as bid rigging, price fixing, market allocation, unlawful information sharing, or collusive tendering.
- South African common law of contract
- South African common law of partnership, where the consortium is unincorporated or partnership-like
- Companies Act 71 of 2008, where the consortium is incorporated as a company
- Competition Act 89 of 1998
- Broad-Based Black Economic Empowerment Act 53 of 2003
- Preferential Procurement Policy Framework Act 5 of 2000, where public procurement is involved
- Preferential Procurement Regulations, 2022
- Local Government: Municipal Finance Management Act 56 of 2003, where a municipality or municipal entity is a party or procuring institution
- Municipal Supply Chain Management Regulations, where municipal procurement is involved
- Public Finance Management Act 1 of 1999, where a national or provincial department or public entity is involved
- Construction Industry Development Board Act 38 of 2000, where construction procurement or CIDB grading is relevant
- Income Tax Act 58 of 1962
- Value-Added Tax Act 89 of 1991
- Tax Administration Act 28 of 2011
- Protection of Personal Information Act 4 of 2013
- Electronic Communications and Transactions Act 25 of 2002
- Copyright Act 98 of 1978, where designs, documents, software, reports, drawings, or other work product are created
- Consumer Protection Act 68 of 2008, where goods or services are supplied to consumers
- Occupational Health and Safety Act 85 of 1993, where site work, construction, installation, or workplace safety risks are involved
- Construction Regulations, 2014, where construction work is involved
- Prescription Act 68 of 1969
- Arbitration Act 42 of 1965, where arbitration is selected as the dispute-resolution mechanism
Use this as a starting point only. Verify current gazetted amendments, tribunal rules, and SARS / DOL circulars that may apply to your matter.
Typical questions we'll walk you through
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What are the full legal names of the consortium members?
Are the members individuals, companies, close corporations, trusts, partnerships, NPOs, municipalities, public entities, or institutions?
What is the purpose of the consortium?
Is the consortium being formed for a tender, project, contract, grant application, research initiative, construction project, or commercial opportunity?
Will the consortium be incorporated as a company or remain an unincorporated contractual arrangement?
Who will act as the lead member or consortium representative?
What authority will the lead member have to sign documents, submit bids, communicate with clients, or bind the consortium?
What contribution will each member make: money, skills, personnel, equipment, licences, intellectual property, experience, premises, or technical capacity?
What percentage interest, work share, revenue share, or profit share will each member have?
How will losses, costs, penalties, damages, and liabilities be shared?
Will members be jointly and severally liable to the client or only liable for their own scope of work?
What scope of work or deliverables will each member be responsible for?
What project milestones, deadlines, service levels, or performance standards will apply?
Will there be a steering committee, management committee, or project committee?
What decisions require unanimous approval or majority approval?
How will bank accounts, invoices, tax records, accounting records, and payments be managed?
Will B-BBEE, local-content, skills-transfer, subcontracting, or procurement commitments apply?
Can a member withdraw from the consortium before the tender is awarded or project is completed?
What happens if the tender is unsuccessful?
What happens if the main contract is awarded?
What happens if a member fails to perform, becomes insolvent, loses a licence, is deregistered, or breaches the agreement?
Will confidentiality, non-circumvention, non-solicitation, exclusivity, or restraint clauses apply?
Who will own intellectual property, data, designs, reports, documents, software, or work product created by the consortium?
May members use the consortium name, logos, credentials, or project references for marketing?
What insurance, licences, professional registrations, tax compliance, and statutory approvals are required?
How will disputes and deadlocks be resolved?
How will the consortium be terminated, dissolved, or wound up?
Who will sign the agreement on behalf of each member?
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