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Case Study: Commercial Law

By jmsmithx1 Feb 04, 2009 764 Words
Addressing International Legal and Ethical Issues Within ContractsJames Michael SmithUniversity of PhoenixAddressing International Legal and Ethical Issues Within ContractsUniversity of Phoenix offers a simulation about CadMex and Gentura and an international contract they pursue (University of Phoenix, 2009). CadMex as a pharmaceutical company is about to go into contract with Gentura, a company in the country of Candore. CadMex needs to make sure that the contract that is formulated offers protection that will mutually benefit each party while allowing CadMex to successfully market a new product from Gentura entitled ProPrev. This paper will answer why Gentura would be in breach of its contract with CadMex Pharmaceuticals, the remedies that might be available for such a breach, and also make recommendations on how the Gentura situation should be handled. Within the paper an analysis of selecting the proper forum and venue for dispute resolution will also be explained followed by the conclusion.

Gentura would be in breach with many of the actions that it chose to take during the timeframe that they had the partnership with CadMex. One example would be when they chose to market the ViroBlax drug when there was only a one percent outbreak of the disease in Candore. Due to the higher percentage later on in the simulation, the government was able to step in to allow cheaper drugs worth the three percent outbreak that had occurred. The contract that had been formulated allowed CadMex full global marketing rights and Candore's action to offer the drug when there was only a one percent outbreak broke that portion of the contract.

The remedies involved within the simulation involved taking legal action, pursuing compensation without legal action, and obtaining shared rights of another drug manufactured by Gentura. Each remedy offers different positive and negative consequences of the action. For example, if legal action was taken, future investments within Candore may be impacted. A lawsuit will also cause a public upheaval stating that CadMex is only concentrated on profits and not the people. CadMex does not want to set a standard of not being firm though with their contracts which means that legal action may be something to consider, but would probably not be the best method to pursue.

The best option for both parties for the breach of contract would be to not take legal action and instead renegotiate the contract to obtain shared rights of another drug. This action benefits the business decision and while the losses from the breach may still be there, the profits that can occur as the new negotiation could cause increase for CadMex without causing financial hardship on Gentura.

CadMex, based out of the United States, had to first find trust in Gentura amidst the first dictatorship country of Candore. The decisions that had to be made came from both legal and ethical standpoints of business. On one side the legal aspects of the breach could cause a lawsuit to entail whereas the ethical issue of Candore's citizens suffering from an illness where Gentura could provide assistance.

At the start of the simulation a proper forum and venue for dispute would need to be reached for the contract. The best option would to choose an International Arbitration because the International Arbitration courts base the law on what is held within the contract. The private law that is between the two parties is what is of utmost importance within an International Arbitration forum. Private law states that the contract is a formulation of a new law, as long as it abides with the laws of the higher authorities, is formulated for the parties involved to do business or some other obligation.

In conclusion, the simulation provided an in depth look at just how complicated contracts can be but even more so when dealt with companies on an international scale. The legal and ethical complications that can arise are enough to make a company create a very detailed contract covering the code of conduct between the offer and offeree. When international contracts occur, it is also very important to make sure any decisions that are made do not have any ethical, legal, or cultural implications within the other country. The simulation provided resource for contract law and how breaches of contract should be approached. In the end, Gentura and CadMex can have a long lasting relationship as long as they use International Arbitration forums of venue, renegotiate the contract if needed, and adhere to the best interests of each party within legal and ethical ramifications.

ReferencesUniversity of Pheonix, (2009). Addressing International legal and ethical issues.

Retrieved February 1, 2009, from Contemporary Business Law I Web site:

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