In China, the old joke goes, a contract is a pause in the negotiation.
VANESSA CHANG, KPMG PEAT MARWICK.64
A contract is an agreement by the parties concerned to establish a set of rules to govern a business transaction. Contract law plays a major role in international business transactions because of complexities arising from the differences in participating countries legal systems and because the host government in many developing and communist countries is often a third party in the contract. Both common-law and civil-law countries enforce contracts, although their means of resolving disputes differ. Under civil law, it is assumed that a contract reflects promises that will be enforced without specifying the details in the contract; under common law, the details of promises must be written into the contract to be enforced. 65 Astute international managers recognize that they will have to draft contracts in legal contexts different from their own, and so they prepare themselves accordingly by consulting with experts in international law before going overseas. In China, for example, The risk is, you could have a contract torn up or changed. Were just going to have to adjust to that in the West, says Robert Broadfoot, who heads the Political & Economic Risk Consultancy in Hong Kong.66 He says that western companies think that they can avoid political risk by spelling out every detail in a contract, but in Asia, there is no shortcut for managing the relationship. In other words, the contract is in the relationship, not on the paper, and the way to ensure the reliability of the agreement is to nurture the relationship.
Even a deal that has been implemented for some time may start to get watered down at a time when you cannot do anything about it. A Jjapanese-led consortium experienced this problem after it built an expressway in Bangkok. The Thai government later lowered the toll that they had agreed could be charged for use of the road. This is a subtle form of expropriation, since a company cannot simply pack up a road and leave.67 Neglect regarding contract law may leave a firm burdened with an agent who does not perform the expected functions or faced with laws that prevent management from laying off employees (often the case in Belgium, Holland, Germany, Sweden, and elsewhere).
Contract Law : Economic article from Global Management Catagory Contract Law
Contract Law Economic article from Economic Global Management.Free learning from data about Contract Law Economic Global Management Business Management,online business management,business management classes,online business management degrees