Legal Aspects – International Business Law

Executive Summary

In order to fully understand the dichotomy of this case there must first be an anlysis of the salient points.  This case of international trade law applies to transactions for goods or services that cross national boundries.  Parties stated herein were affected by disputes regarding contractual rights and duties  The case concerns government substantive and procedural law at an international level.

Case Background

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Bob keyes, CEO of Fullerton-based MemoryTech Inc., initiated telephone and email communications with purchasing agents in Vietnam, Turkey, Great Britain and Mexico.  In his multiple conversations, there were no formal contractual negotitations between MemoryTech and purchasing countries, to his own neglect.

Substantive and Procedural Issues

Keyes is determined to file suit against Minh and the Government of Vietnam in an American court.  However, his claim of breach of contract is not substantiated in his argument. “Procedural law prescribes a method of enforcing rights or of obtaining redress for the invasion of rights.”1  There is no mention, in the text, of any wrongdoing from Minh that would result in penalty.  Unless there is other evidentiary material to prove otherwise, there is an absence of information to build a foundation for this claim. Furthermore, the fact that an official written contract was never endorsed leads to a gray area which would be difficult to interpret in court.

The case between Gul and Keyes has a more lucid interpretation. The language in Gul’s fax indicated that, “any disputes arising out of this contract must be resolved by arbitration in Istanbul.”  The assumption here is that the fax was intended to be a written contract initiated by Gul and signed by both parties.  However, for a written contract to be legal and binding, it must be signed by both parties. Keyes did not sign and return the document; therefore, the only avenue available to Gul is to choose an alternative resolution.

In addition to this case, there is an incident involving Keye’s daughter, Benn, who made an oral commitment and promise to deliver shirt-pocket computers to several of her classmates.  Generally, courts do not regard oral commitments as a legal and binding contract and, in most cases, interpret them as hearsay.

Finally, the accident which occurred in a Mexican warehouse causing serious bodily injury and property damage is a case of punitive damages and should be referred to a CISG advisory council. Specific to this case is the fact that an innocent injured party wants to be compensated for the damage caused by the injury.  International courts will have to address this case with more scrutiny.

Legal rights and duties of MT and all other relevant parties

All four of these issues are civil cases in which the parties have, available to them, procedural and substantive law.  “The basic function of civil procedural law is to facilitate the movement of a lawsuit through the legal system.”2 This is a safeguard initiated by international law in order to ensure that each party will be afforded fair and impartial treatment. In addition to their right to procedural law, each party has the right to substantive law which basically encompasses the principles of right and wrong as well as the principle that any civil wrongdoing will result in penalty.

What should be done?

In brief, MT’s board of directors should seek a second opionion from legal counsel because of the confusion in the interpretation of internationl law from both parties.

Traditionally, in this country, parties turn to the court system when they cannot come to an amicable solution by themselves.  However, when disputes arise between parties in international business transactions, parties are reluctant to use foreign courts to resolve their disputes. Sometimes parties entering an international contract will consider alternative methods of resolving disputes without going to court.

These methods, known as Alternative Dispute Resolution (ADR), offer a mechanism of neutrality for resolving disputes. To resolve future disputes without resorting to a foreign legal system, parties should plan ahead by including an ADR clause in their contract.  If this clause would have been included in a contract, the issue between Keyes and opposing parties could have been avoided.3

Works Cited

1.  Delmar Au: Walston-Dunham, ‘Introduction to Law’, pg. 95
2.   IBID
3.   Kathryn H. Nickerson, (2005), ‘Primer on International Alternative Dispute Resolutions’, Office of the Chief Counsel for Int'l Commerce, pp. 1-2

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