Legal & Ethical Issues Simulation

Rafael Hernandez










Contemporary Business Law
LAW 421 - Robert G. Lewandowski
March 24, 2014


What are the issues involved in resolving legal disputes in international transactions?


Companies doing business with each other must agree on ground rule that will govern legal
disputes during international transactions. As viewed in the simulation, companies must
agree on a rule of law that establishes the conditions for conducting business. They must also
agree on a forum that will settle that dispute, whether it provides jurisdiction to one of the
companies home country, both or is settled in international arbitration.
What are some practical considerations of taking legal action against a foreign business partner
based in another country?
Some practical considerations when considering legal action against a foreign business
partner:
Precedent - Does the sanctity of a contract stand and what can concessions do the partnership
in the long term.
Brand Image - Legal action can lead to fracturing business relationships and the companys
public image to suffer.
What factors could work against CadMex's decision to grant sublicensing agreements?
In this particular simulation, 3 main factors can work against CadMexs decision: Time, costs
and ethical/cultural issues. CadMex would be looking at a substantial investment in both time
and costs in ensuring quality standards of drugs produced by sub-licensees. On the other
hand, as CadMex establishes work processes in a different country, it must find a way to
align its own ethical guidelines with the host countrys existing ones.
When the local customs and laws conflict with the customs and laws of an organization
operating abroad, which should prevail? Explain why.
At all times, a company conducting business abroad must ensure its policies do not
discriminate for any reason. Company policy should provide for reasonable accommodations


that protect the employees rights and beliefs. On the other hand, it is reasonable
accommodation after all. The adjustment should not be detrimental to the business or cause
undue hardship. In this case, CadMexs safety standard is key and must be compliant in the
international stage. I do not believe either should always prevail over the other. As with
everything, its about compromise and finding a balanced solution.
How would you compare the issues in this simulation to the domestic legal issues discussed in
your Week One readings? How should companies resolve domestic and international issues
differently?
With domestic issues, things become much simpler. U.S. law becomes the framework and
our legal system provides a slew of options to dispute transactions. In this case, companies
do not have to define governing laws and arbitration can still happen. Companies conducting
business internationally have an additional burden of time and cost investments around
ethical/cultural research, establishing governing laws and dispute forums, to mention a few.
Domestic companies can rely on the U.S> Constitution to establish the rules of engagement
and liability.


References
Addressing International Legal and Ethical Issues simulation - UOP Online

Melvin, S.. (2011) The Legal Environment of Business: A Managerial Approach. 2nd
Edition (New York: McGraw Hill)