Sample MGT608 Business Law and International Contexts Case Study

MGT608 Business Law and International Contexts Case Study Sample

Context

Australian businesses may wish to expand their operations and enter new markets in other countries. Making contracts is fundamental to business practice and this assessment allows students to reflect on the types of contracts a business may enter and to consider what the law relating to contracts is in the country they seek to do business.

This assessment builds on Assessment one (1) where research was conducted on the legal system of a chosen country.

Instructions

Assume that you are the director of an Australian company that does business in a number of Overseas countries. Your company has decided that there is an opportunity to do business in the country that you researched in Assessment 1 (chosen country).

Your task is to prepare a written document appropriately referenced, that address the following matters:

1. State the nature of business your company is involved in. Be as creative as possible. For example, you may decide that you are a manufacturer who wishes to export goods to the chosen country. Alternatively, your company may provide services which can be offered in the chosen country or your company may wish to import goods and/services from the chosen country.

2. Explain in as much details as possible the business opportunity that has arisen for the company.
Making contracts is fundamental to business practice. Your company will need to make contracts in the scenario country. Please ensure you

• Identify the types of contracts that your business would need to enter in order to do business successfully in the scenario country. Explain why these contracts are necessary.

• Identify and explain the sources of contract law in the chosen country.

• Identify and explain the legal requirements for the creation of a valid contract in the chosen country.

• Explain the remedies for breach of contract in chosen country.

• Discuss whether it would be necessary to appoint an agent in the chosen country and an explanation for your decision.

• Identify whether Australia has a Free Trade Agreement with chosen country and explain the implications of this.

• Identify any specific regulations that apply in the chosen country based on the nature of your company’s business.

Solutions

Introduction

The report has been prepared about an Australian company named PharmaCare that is going to be start and expand its business to the market of UAE.Being a director of this company, all the decision taken for the expansion of the business is mentioned here. PharmaCare is a manufacturer, marketer, and also distributor of different types of medicines, specialty ingredients, and pharmaceuticals products. This is a manufacturer company basically invest in development and research, equip the facilities of product with new technologies, provides employment to microbiologist and chemist as it engages in manufacturing medicines and drugs. For Assignment Help It manufactures and sells capsules, tablets, and pharmaceuticals powder. To create a valid contract to start the business in UAE or to export the pharma product there, there is a requirement of various legal documents such as a list of packing, commercial invoice, certificate of origin, invoice of delivery, license copy, trade license, and many more. If there is a breach in the contract before the specified time period, then the party who breaches the contract has to compensate the opposite party. Yes, it is necessary to appoint an agent in both the country where the product is to be sold and to the place where the product is to be manufacture because the agent analysis the marketing condition of the country also communicates on the behalf of the seller of the good. The agent helps in selling the product by analyzing the taste of consumers the marketing coding the marketing competition and various factor which helps to expand the market. Australia has a free trade agreement with UAE that helps Australia to sell its product outside the country and to start the business there without any restriction. Free trade agreement lowers the tax while transporting or shipping the product from one place to other. UAE restrict the importation of Israel's product.

Discussion

Types of Contracts

PharmaCare is an Australian company that processes, manufactures, and deals with the production of drugs, medicines, specialty ingredients, and pharmaceuticals products. Hence, the company PharmaCare would need a drug regarding contract to sell its product to UAE in order to do business successfully. Such a contract would ensure that the product that is being sold to another country is medicines or the medium of exporting from one country to another is used to transfer illegal things. It would be needed to reconfirm the product to sell in UAE. Free Trade Agreement would be needed between both the countries for importing and exporting between them. The free trade agreement will help the Australian company by allowing it access to another country where it could sell its product and expand the area of the business. The company PharmaCare can freely sell its product to UAE without any restrictions and without high taxes. Nondisclosure agreement will also take place between other country.These types of contracts would be needed by PharmaCare to enter the market of UAE in order to do business successively(Altenhofen, 2019).

Source of Contract Law

In UAE, UAE Civil Code governed the contractual agreements. It deals with civil remedies, obligations, rights of the party that makes the contract with it. Not only the civil code, but in the case of commercial contacts, the commercial code has applications too. Apart from these codes, there are other regulations too reading land transactions, selling the ships, business law, and many more. The contract law in UAE is originally derived from Islamic law.Civil laws of Egyptian, French law, and Roman law also influence the contract law of the UAE. One of the peculiar features of the civil code in UAE is that it categorizes the term contract into two parts. The first part is the fundamental basis of the contract that is the essential element of the contract, and the second part of the contract is that lay down the details of the particular of the contract that might affect the terms and existence of the contract. Hence, the main source of contract law of UAE is Islamic law(Hamidah et al., 2017).

Legal Requirements for The Creation of a Valid Contract

Every valid contract needs to fulfill legal requirements. Before making any contract between two parties, there are so many procedures and formalities that have to be followed. All the information regarding the new business that is going to be start should be presented while creation of the contract. This includes names of the company, all information about its partners, the type of product it will manufacture and sell, registrar office of the company.While performing these formalities, there are so many legal documents needed to be cleared. A commercial invoice is one of them. There is no prescribed form for the commercial invoice but for this, but a certificate that must be certified by an approved authority is needed. The commercial invoice must show the name of the country of origin, the name of the manufacture, a complete description of the product, the total number of products, its gross and net weight. The details provided on the packing are also matched with the details given on the bill of lading. Legal documents play a very important role in making any valid contract between two parties. The legal documents that are needed while making a contract are a packing list, commercial invoice, delivery order, relevant and valid copy of license trade, and certificate of origin. Another legal requirement is a bill of lading. Bill of lading is issued by the carrier to the product shipper to detail the path and method of shipment. Bill of lading is used as the contract for moving the cargo. In the bill of lading, the tariff number is checked whether it is appropriate or not. The number must ensure the appropriate rate of freight and after the approval, it is applied to the product that is to be shipped. There must be two original copies of the bill of lading be furnished. After this, a list of packing is also required. There is no specific format provided to make the packing list. The details given to the packing list is being matched with the details mentioned in the bill of lading(Rana, 2020). Another important thing that is required while making a valid contract is a certificate of origin. The address and the name of the manufacturer must be included in the certificate of origin. The certificate of origin that will be shown during making the valid contact must be certified by the embassy of UAE. The certification of origin must contain the clause ‘we certify that the goods or product are of Australian origin’.

Remedies for Breach of Contract

Breach of contract takes place when one party fails to follow the terms and conditions that are agreed during the agreement(Moreteau, 2017).UAE offers so many remedies for the breach of contract under its law. One of the remedies for breach of contract in the UAE is that one can claim contractual damages regarding the breach of contract. If one of the parties cancel the contract then also the breach of contract takes place. The liability of loss shifted to the party that breaches the contract. The loss can be occurred due to various reasons like due to probable or due to the natural outcome of the party that breaches the contract(Goldberge, 2018). The plaintiff can have so many options using which it can file suit against whoengaged in breaching the contract. One of the monetary remedies for the breach of contract is compensatory damages. Compensatory damages remedy means the party gets the compensation who suffers from losses due to the action of another party. The party involved in the breach of contract has to pay the money to the claimant.

According to the laws of UAE, not only the culprit but also the victim the burden of losses and to fulfill the responsibilities of mitigating the loss. UAE performs the principles of mitigating laws. It means the person who claimed for the loss must not let the situation become worst. The victim should take care of the situation and let not increase the loss further. The plaintiff must take the necessary step at the appropriate time to avoid the situation of breach of contract. The damage calculation is based on the performance of both the party. Under the laws of UAE, if the victim got benefits from the breach of contract, the value of benefit would be reduced from the damage that is owned by the defendant.

Hence, the court of UAE does not shift all the burden to the party who breached the contract. If the victim has to get the compensation then it would have to prove all the reasonable steps that it took to avoid the breach of contract. If the party successfully proves the steps taken, then only it would get the compensation.

Need of Agents

Appointing an agent in UAE is necessary and beneficial for the company as the agent would provide every information regarding the position of marketing, the need of a product, the types and quality of the product they want. It will help in expanding the business. An agent can be of two types, the first is an export agent and the second is an import agent.An expert agent can be an individual or a firm that undertakes so many exporting activities. One of the best things about the exporting agent is that it never acquires the ownership of the product and in this way, the ownership of the product is always controlled by the exporter of the product. The activities that are undertaken by the exporter are doing the functions of marketing. The analyses reduce the risk of business and find a way to mitigate the occurred loss. Not only this, but an agent handles all the documentation and logistics,negotiates the deals with the consumer, also makes a contract with the buyer. All these activities are done by the agent on behalf of the product exporter(Raghutla&Chittedi, 2020). It is necessary for Australia to appoint an agent because with the help and guide of an export agent it can easily enter the export market. The role of the agent is to get the order and to get a commission for the services granted by them. Having an import agent is equally beneficial as having an export agent. Import agent also helps the business to grow in outside the country. The jobs that the imports agents perform are communicating effectively with clients and colleagues, solving the problem where the product has to be imported. An import agent knows the foreign languages so it becomes very beneficial for the PharmaCare company to talk with the client who stayed in UAE.

Free Trade Agreement

Yes, Australia has a free trade agreement with UAE. The Free trade agreement benefits the exporter company that is Probiotec, the importer that is the country UAE, investors, and the producers too. The current economic position in UAE is an economic openness and open market policies. UAE basically attempted to diversify itself from traditional commodities and crude oils to a market sector with lots of diversification. The diversified market sector would include the sustainable energy sector, education sector, beverages and food services, manufacturing sector, and many more. The free trade agreement would help UAE to get importation from different countries that would expand its market area. Having free trade agreement with the country where the company has to export its products is very beneficial. There is a great boost of economic activity after having the free trade agreement with UAE. Free trade agreement eliminates and decrease the tariffs and also helps behind the border barriers. If it is not done so, then the flow of services of goods from Australia to UAE gets disturbed. Not only this but making the investment to UAE would also be affected. Free trade agreement not only gives benefits to the company, but also to the consumers stays in UAE. They get a wide range of products and improved services and goods. The free trade agreement has benefited Australia from foreign investment too(Nken, &Yildiz, 2021). Notonly this, but the free trade agreement also makes the link stronger between business to business and people to people and in this way the bilateral relationship between Australia and its partner of free trade agreement that is UAE.

Specific Regulation

UAE implies specific regulations to the country that wanted to export to UAE such as the company should have the appropriate trade license provided from the Department of Economic Development. The federal custom authority of the UAE sets the customs policies of the country. Each emirate holds its custom authority and helps the business and individuals to perform import and export of their product. Custom offices are basically located at the exit point of the country like the land border, or at seaports, airports, and at the entrance point of the country. UAE does not allow every product to import and hence, banned some of the products like narcotic substances, any things that are used for black magic or sorcery, electronic hookah or e-cigarettes, gambling tools, betel leaves, pornographic material, reconditioned and used tires, and those goods that are manufactured in Israel. When a country wants to export goods to import, it checks some of the documentations too like a certificate of origin that must state the country of origin, all the details provided in the packing list, bill of lading, the commercial invoice issued by exporting company(Mosteanu, &Alghaddaf, 2019).UAE also checks the ingredients used to prepare the medicines, specialty ingredients, and pharmaceuticals products.

Conclusion

From the above report, all the possible ways could be easily identified using which Australian company PharmaCare can enter the market of UAE. PharmaCare is an Australian company that deals with the manufacturing of medicines and drugs. The company will need to create a contract with the UAE to enter there in order to do business successfully. It would need a drug regarding contract and also free trade agreement with UAE to export the products freely to the markets of UAE. The main source of contract law in the UAE is Islamic law. For the creation of the valid contract between two companies, it needs some of the legal documents for clearance such as a relevant and valid copy of trade license, delivery order, packing list, origin certification, a complete description about the product that includes gross weight and net weight, manufacturer name, total value, and total unit. In case the contractor fails due to the action of any party then it is called a breach of contract. UAE provides some of the remedies for the breach of contract on the basis of damage contractual to compensate the party that suffers the loss. From the discussion, it could be said that It is necessary to appoint an agent for Australia because an agent analyses every aspect of where the product is to be sold out. The agent does research by traveling abroad, prepares the plan to export the product to another place, gives so much beneficial advice to the exporter about how to adapt the principles of the marketing mix. While going through the report, it was identified that UAE has a free trade agreement with Australia. The Australian company, PharmaCare would have so many advantages because Australia is having a free trade agreement with UAE reduces and eliminates the tariff, and helps Australia to export its product and make the investment to UAE.

References