What establishes liability in case of a joint enterprise?

Liability in the context of a joint enterprise hinges on the elements of a common purpose and mutual control among the participants. A joint enterprise is characterized by an agreement between two or more parties to engage in a specific activity, which must serve a shared goal or purpose. Additionally, the participants must have some level of control over the venture, meaning they participate in its management or decision-making processes.

This shared purpose and mutual control is essential because it establishes a legal framework within which each party can be held accountable for actions taken within the scope of the enterprise. By fostering collaboration and joint responsibility, the law allows for the attribution of liability to all members of the joint enterprise when wrongful acts occur during its operation.

The other options, while they may seem relevant at first glance, do not specifically encapsulate the defining legal criteria that establish liability in a joint enterprise. For instance, shared financial investment might indicate participation, but it does not alone create liability without the elements of purpose and control. Similarly, a formal written agreement can clarify relationships but is not a strict requirement to establish a joint enterprise, and agreement on a specific location does not address the essential components of purpose and control needed to attribute liability.