Importance of Contract Law for Woolworths in Japanese Market

The report focuses on the importance of contract mainly during the expansion of a company and for commencing its import and export facilities in an international market. The focus of the report is on the expansion of Woolworths and the contract law that needs to undertake while commencing its business with Japan. Therefore, it is necessary to consider some of the key elements that are necessary for commencing with its business in the Japanese market.

Running head: MANAGEMENT
Management
Name of the Student
Name of the University
Author’s Note

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Executive Summary
The report focuses on the importance of contract mainly during the expansion of a company
and for commencing its import and export facilities in an international market. The focus of
the report is on the expansion of Woolworths and the contract law that needs to undertake
while commencing its business with Japan. Therefore, it is necessary to consider some of the
key elements that are necessary for commencing with its business in the Japanese market.
 The types of contracts that are available in the business market include bilateral
contracts, simple contract, unit pricing contracts, express contracts, cost plus
contracts. Woolworths can implement the simple contract type to commence its
business in the Japanese market.
 The sources of contract law that Woolworths need to be worried about is the code of
conduct that takes place in Japan along with the judge and the legislations. The
application of these sources can help in the effective development of the business.
 The legal requirements for making a contract valid between Woolworths and Japan
include the offer and acceptance along with the agreement of lawful contract between
the two parties.
 Breach of remedies can be made by providing monetary compensation and by
restitution policy. The monetary compensation can be provided with the help of
compensation damage in case there is serious violation in the terms of contract.
 It is necessary for Woolworths to appoint agents in the country so that competitive
advantage can be gained and an insight into the local market can be achieved.
 The free trade agreement between Australia and Japan can have a significant impact
on the import and export between the countries. It is seen that Australia and Japan
have managed to eliminate any form of employability issue in the country.

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 Regulations such as Sales of Goods and customer protection can be considered to
continue with the growth of business in Japan.

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Table of Contents
Introduction................................................................................................................................4
Types of contracts needed to enter the business........................................................................5
Identify and explain the sources of contract law........................................................................6
Identify and explain legal requirement for creating a valid contract.........................................6
Explain remedies of breach of contract......................................................................................7
Necessity of appointing an agent...............................................................................................8
Free trade contact of Australia in the chosen country................................................................9
Specific regulation that applies in a chosen country................................................................10
Conclusion................................................................................................................................10
Reference..................................................................................................................................12

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Introduction
In the modern world, companies look to expand its resources and business
competencies by seeking pastures in international market. As stated by Gillies (2016)
expansion into an international market requires various considerations that include
understanding the nature of business as well as the external factors that affect the business
overall. An analysis of the external environment needs to be done so that the expansion can
take place in a proper manner (Birds, 2018). One of the elements that are taken into
consideration while conducting the external analysis of a market is the legal issues that are
involved between different countries. The legal constitution, rights and policies of one
country vary largely in a different country.
The report focuses on the possibility of expansion of Woolworths from Australia to
the Japan. The reason for the expansion in the Japanese market is that Woolworths can import
and export goods for the benefit of the Australian market (Woolworths.com.au, 2019). The
opportunities that Woolworths may gain from the expansion along with the trade relation is
analysed in the report. For this reason, an assessment is made on the contract law that exists
in Japan so that Woolworths can comply with the legality of the laws of the country.
Woolworths is one of the most reputed supermarkets in Australia that was founded in
1924. Overall, the company possess over 995 stores across Australia and New Zealand
(Woolworths.com.au, 2019). It has been seen that along with Coles Woolworths forms a
duopoly of the Australian market. The specialisation of the supermarket is in the sale of
groceries as well as magazines. Therefore, its expansion in the UK can be related to the
expanded sale of groceries for the Japanese market (Woolworths.com.au, 2019). Hence, for
this reason any remedies to the breach of contract along with the trade relations that exist
between Japan and Australia are analysed in the report.

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Types of contracts needed to enter the business
In order to ensure that Woolworths manage a successful business in Japan, it is
necessary that the company take into consideration the types of contract needed so that it can
continue with its growth in the Japanese market. Some of the types of contracts that exist
between business entities include bilateral contracts, simple contract, unit pricing contracts,
express contracts, cost plus contracts and many more. According to Ashworth and Perera
(2018), these types offer varied characteristics and legal requirements for a business
organisation to succeed in its own market as well as in an international market.
One of the types of contract that is required to be maintained by Woolworths in the
Japanese market involves the simple contract. As observed by Dhingra et al. (2016) the
simple contact is denoted as a type of written or oral agreement between two parties.
Woolworths can use this type of contract for the development of its business in the Japanese
market mainly because the application of the simple contract is easy and requires less legal
paperwork (Woolworths.com.au, 2019).
Some of the items that are not required for binding a simple contract include
witnesses, signatures and seals. Therefore, financial requirements for providing these items
can be used by Woolworths effectively after expansion. The necessity of the contracts is that
it can help in outlining the expectations of both the parties (Crafts, 2016). At the same time, it
can protect the parties in case there is any breach of trust between the parties. For
Woolworths, price can be set for expansion into the Japanese market and the manner in which
the company can conduct its business, which may also involve export and import
(Woolworths.com.au, 2019).

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Identify and explain the sources of contract law
The sources of law that can be taken into consideration are the judges and legislations.
As observed by Šarčević (2016) in Japan, the sources associated with contract law can be
considered as important mainly because the common laws based on conducting a business are
related to the sources associated with the laws. It has been seen that the contract law in Japan
is codified mainly because the development of contract between business and customers need
to be based on the purpose of the business. In this regard, it can be said that in the case of
Woolworths, the sources of contract that the company need to be worried about is the
legislation that forms part of the administrative process in Japan (Woolworths.com.au, 2019).
It has been seen that in Japan the Government provides the application of the code of
contract of a business. Beale et al. (2018) is of the opinion that the Government is the
ultimate head that decides about the manner in which business need to be conducted within
the country. For Woolworths, it is necessary that the contract between the managers of the
company and the Government of Japan be maintained so that effective business strategies can
take place. Therefore, as stated by Arrowsmith (2016) the effective application of the sources
associated with the development of contract within the Japanese contract law can be
considered as important for the development of the company. At the same time,
administrative rules and regulations also consist of the source of contract law that can be
useful for the development of Woolworths in Japan (Woolworths.com.au, 2019).
Identify and explain legal requirement for creating a valid contract
For Woolworths to continue its success in the Japanese market, it is necessary that the
company understands the legal requirements necessary for maintaining a valid contract. As
stated by Cartwright (2016) the requirements can be considered as essential elements without
which contract of any type cannot be validated. In Japan, one of the essential legal

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requirements for maintaining a valid contract is the offer and acceptance. As pointed out by
Henckels (2017) a contract can be legally viable if the other party legally accepts the offer of
one party. In this case, the offer to enter into the Japanese market by virtue of import and
export can be considered as an offer and acceptance between the business and the
Government.
At the same time, it is necessary that the objectives related to the agreement of the
contract be lawful so that the contract formed can be made lawful. If the object of the contract
is not made lawful then the contract is considered as void. Hence, as stated by Perry and
Corbin (2019) it is necessary that legal paperwork be made so that the contract in terms of
expansion as well as development of trade relations between the countries can commence. At
the same time, a contract can be considered as void if there are mistakes made by both
parties. The requirement to ensure that such mistakes does not take place between Japan and
Woolworths need to be genuine and free of consent (Woolworths.com.au, 2019). Therefore,
it can be said that Woolworths need to consider the application of these legal requirements so
that it can continue to commence its business in the Japanese market.
Explain remedies of breach of contract
Breach of contract can be considered as a serious offence as the violation of legal
code of laws takes place in the case of breaches. In Japan, the breach of contract can be
associated with penalties that may be costly for a business. According to Chiam (2018), it
may sometimes even lead to the dissolving of a business and jeopardise the reputation of a
company. In this regard, it can be said that any type of breach of contract from the part of
Woolworths in the Japanese market may lead to its failure. However, Matsushita et al. (2015)
stated that remedies to the breach of contract can be made so that Woolworths can continue to
grow in the business.

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One such remedial action that can be taken into consideration is the compensatory
damage. Matsushita et al. (2015) stated that this is usually done if the concerned person has
broken any of the rules of the contract that may lead it to become illegal. In the case of
Woolworths, the compensatory damage can be provided only in the case of loss that has been
incurred due to the failure to comply with the contract with the Government. McAlpine and
Roberts (2017) suggested another remedy that can be the restitution policy by which any
damage to the position of a person can be made that might result in the loss of property. For
Woolworths, the company is known to earn profit owing to its goods and products
(Woolworths.com.au, 2019). Hence, it can be said that the application of this particular
remedy to the breach of contract may not be applicable for the company in the Japanese
market.
Necessity of appointing an agent
It is always challenging for a company to adjust to the rules, business environment
and social competence of a foreign country. Therefore, as stated by Devenney and Kenny
(2017) it is necessary to make business deals with an agent that is aware of the local business
and can help in guiding the new business in terms of being successful. As stated by Ahmad,
Connolly and Demirag (2018) historical analysis has provided evidence that conducting
business in Asia can be challenging mainly due to the difference in culture as well as the
business requirements. In this regard, it can be said that for Woolworths to continue its
business in Japan, it is necessary that the company appoint agents that can help in
understanding the business as well as understand the local code of conducts associated with
the business (Cordero-Moss & DiMatteo, 2016).
The reason for the appointment of agents in the country can be based on gaining a
competitive advantage in the business. At the same time, the contract law related to Australia

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and Japan are different and so the managers of Woolworths need to understand the difference
and commence its business activities based on the laws of the country (Woolworths.com.au,
2019). Along with this, the agent can also analyse the external environment that is associated
with the expansion of the company. Hence, it can be said that for the successful development
of the company, appointment of an agent within the budget of Woolworths is a necessity
(Woolworths.com.au, 2019). At the same time, Booysen (2013) stated that the agent could
help in the development of the competency of Woolworths by identifying the possibilities of
trade activities between the two countries.
Free trade contact of Australia in the chosen country
Japan maintains a Regional Comprehensive Economic Partnership free trade
agreement with Australia and several other countries around the world. The proposal for the
free trade partnership was initiated in 2012 and was conclude in 2014 with its implication
from 2015. As stated by Šarčević (2016) the trade agreement began as a step towards the
development of the economic conditions of the countries and the manner in which each of the
two countries can support one another in terms of export and import. Beale et al. (2018) is of
the opinion that the implication of this particular trade agreement it has been seen that in
Japan, local people are not provided with offers regarding jobs. The jobs can be stretched
across countries and any people eligible for the job role can apply for it.
This can be considered as an effective outcome for Woolworths mainly because the
company could import vegetables, animal feed, coal, fish, fruit and so on
(Woolworths.com.au, 2019). This can help Woolworths to continue with its business growth
and ensure that the company maintains its stature in the Australian market. Therefore, as
stated by Arrowsmith (2016) the trade relation between Japan and Australia can be
considered as an effective factor that can lead to the development of a proper contract

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between the countries. Hence, it can be said that for Woolworths to grow in Japan, the trade
relation can be taken into account, which in turn can outline the amount of export, and import
that is conducted by the company with the Japanese local market (Woolworths.com.au,
2019).
Specific regulation that applies in a chosen country
In order to conduct a successful business, it is necessary to identify the specific
regulations that can be associated with the development of a business. This can help in
maintaining the legal code of conduct and prevent any breach of contract between two
parties. Woolworths is a retail company that specialises in selling groceries. Therefore, as
stated by Cartwright (2016) one of the regulations that need to be maintained by the company
while commencing its business in Japan can include Sale of Goods Act. This is an important
regulation mainly because export and import between Australia and Japan takes place that
lead to the development of the trade relation between the two countries (Henckels, 2017).
At the same time, another important regulation that needs to be considered by
Woolworths is that of the protection of the consumers from any unfair trading regulations. As
pointed out by Perry and Corbin (2019) it is necessary that the aggressive nature of business
that the employees of Woolworth’s posses in Australia are cut down in Japan owing to the
change in the nature of the business. The protection of the consumers is necessary for
maintaining the loyalty of the target market.
Conclusion
Hence, it can be concluded from the analysis that in order to continue with the
expansion into a foreign market, the main external factor that needs to be considered is the
legal factor. It is necessary that the legal factor associated with the expansion in Japan be

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analysed so that Woolworths can continue with the development of its business in the
country. The legal factor associated with the development of the company can be associated
by the fact that difference in the contract law of Australia and Japan may have a severe
impact on the development of the business.
Woolworths can gain success in Japan by understanding the contract law that exists
for the development of the business in the country. It is necessary for Woolworths to be fully
aware of the business culture that exists in Japan so that it can continue to develop its
competence in the business market. At the same time, it is also necessary that Japan
understands the trade relation that exists with Australia and gain full utilisation of the import
and export rate that is conducted between the countries. From the analysis, it can be seen that
the appointment of an agent can be considered as fruitful for Woolworths mainly because it
can help in the development of the opportunities of growth in the market.
An overall conclusion can be drawn from the analysis that points to the fact that for
Woolworths to gain success it is necessary that the company identify the remedies related to
the breach of contract. This can help the company to mitigate from penalties that may be
applied in its initial stages while conducting business in the country. Hence, it can be said that
the expansion or the improvement of trade relations between Australian and Japan can help in
the development of Woolworths in both the countries.

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