April 27, 2015
Addressing International Legal and Ethical Issues Simulation Paper
When conducting business internationally there are numerous legal and ethical issues that can occur. It is important to understand the issues that may arise and how to resolve them quickly. Potential issues that may arise when conducting international business for a company such as CadMex are selecting local counsel, understanding foreign laws, and dispute resolutions ("What Issues Arise When Doing Business Globally?", 2015). There are also potential issues that work against the decision Cadmex has made in regards to sublicensing agreements. In the simulation, Cadmex must also understand local customs and laws in order to resolve any disputes.
Issues Involved in Resolving Legal Disputes in International Transactions
It is essential to understand how to address international legal and ethical issues when creating a strong business relationship with a foreign company. If a problem should arise, one of the first steps is to obtain legal counsel. Legal counsel may be in both countries. When selecting legal counsel, it is crucial to choose the most competent firm that will take all matters seriously and is to the needs of their client. Most importantly they are honest and provide full confidentiality. Not all foreign lawyers will adhere to the same standards as an American lawyer, so it is imperative that a confidentiality agreement is between both parties. The counsel that is should also partner with the local counsel. The local counsel will have the expertise on all local laws and customs.
When involved in a foreign dispute it is essential to have an understanding of the local laws and customs. This could be detrimental to dispute and could lead to a long drawn out battle. Issues the local counsel can help with in a dispute are foreign exchange controls, environmental issues and required government consents. Knowing how to deal with these matters ahead of time will negate bigger potential issues.
Practical Considerations to Take Legal Action Against a Foreign Partner
The most important consideration to take into account is choosing the correct law clauses to agree upon during negotiations when taking legal action against a foreign business partner. The best selection for CadMex would be the Candorean Regulations for Technology Import Contracts (University of Phoenix, 2004). This would be the most beneficial of all considerations because Candoria would more than likely impose their government and regulations. Other factors to take into account are cultural and employment issues along with governmental regulations and policies. These could have an enormous impact on how the business is overseas.
Factors That Work Against CadMex’s Decision to Grant Sublicensing Agreements
Many issues may arise when making a decision to grant sublicensing agreements. The most crucial issue is the amount of time and high costs that are a part of maintaining high standards of production following the sublicensing agreement. In the case of CadMex sublicensing may work be the best option. This factor would meet all requirements of Candoria by creating goodwill and control between the two countries. The price difference between the CadMex brand and the generic brands is another factor that may cause a hindrance in allowing for sublicensing agreements (University of Phoenix, 2004).
When U.S. Customs and Laws Conflict with a Foreign Countries Law and Customs
It can become extremely messy when there is a dispute between two foreign countries.