International transactions and resolution of disputes requires an understanding of existing law as well as consideration of foreign culture, politics, decision making approaches and both formal and informal power structures. Melvin (2011) argues that international contracts should be legally binding and enforceable. Any U.S company entering the international market should be aware of existing laws and regulations and expected changes. Parties involved should identify methods such as mediation and alternative dispute resolution for resolving disputes. These considerations are ideal when acquiring foreign assets, forming joint ventures and enforcing contractual provisions with foreign firms.
Practical considerations of taking legal action against foreign business partners want an understanding of that country’s laws and clauses agreed upon in the contract. Any business should consider the laws of its international partner since laws differ across countries. The company should also consider commitment of the other company in the event of a lawsuit. A country can stop business transaction by filing a lawsuit in that country (Melvin, 2011). A company should also consider standing business relationships as legal actions could lead to termination of business relationship. Culture, employee, and foreign government policies should also be considered as they affect international business.
Sublicensing can work well for Cadmex, but a lot of them could run them into sublicensing agreement problems. Multiple agreements will increase chances of lawsuits against Cadmex due to too many sub-paragraphs. Even workers can sue for financial damages on the basis of these sublicensing agreements in case of overlooked sub-paragraphs. Other factors to consider in this case include increased costs and amount of time needed to maintain sublicensing production standards. The company’s goodwill should be maintained and a consideration on how cheap generic brands would be to the population. Authorities can then decide on whether to approve Cadmex’s sublicensing agreements.
In case of conflict, local laws and customs should prevail. For example, American and foreign company engages in a contract to abide by laws and customs when operating abroad. However, in the event contractual agreements are bleached, arbitration fails, or difference arises, priority according to the federal supremacy of U.S constitution and treaties are superior. It precedes conflicting local customs and laws with those laws and customs of organizations operating abroad.
When two businesses from different countries engage in a transaction, each of them seeks protection from personal and trade protection laws. If an American company operates at home, it is assured of protection by U.S laws and vice versa for its foreign partner. In order to resolve international differences, companies should hire lawyers familiar with international laws (Bradlow and Frinkelstein, 2012). Lawyers negotiate for such issues as patent rights and patent rights. Legal counsel will ensure both companies are properly protected before committing through contracts. According to Bradlow et.al (2012), the terms of the business depend on the deal lawyers facts.
References
Bradlow, D. D., & Frinkelstein, G. J. (2012). Negotiating Business Transaction: An Extended Simulation Course, DLA Piper LLP (US).
Melvin, S.P. (2011). The legal environment of business: A managerial Approach: Theory of practice. New York, NY: McGraw Hill
