ECU MBA6115 Case Study: Minimizing Legal Risks in Foreign Business

This case study analyzes the legal risks associated with foreign business contracts. It addresses key factors to consider when minimizing these risks, including incorporating appropriate contract clauses, obtaining reviews from both parties, securing insurance policies, and utilizing suitable technology for contract management. The study also outlines steps for managing risks during mergers with foreign firms, such as building a risk management framework, obtaining organizational commitment, identifying and analyzing risks, evaluating mitigation strategies, and effective communication. Furthermore, it explores various contractual dispute resolution options, including mediation, arbitration, collaborative law, and traditional litigation. The assignment provides a comprehensive overview of the legal challenges in international business and offers practical strategies for mitigating potential risks and resolving disputes effectively.

Running head: LEGAL RISKS IN FOREIGN BUSINESS
LEGAL RISKS IN FOREIGN BUSINESS
Name of the student:
Name of the university:
Author Note:

1LEGAL RISKS IN FOREIGN BUSINESS
Table of Contents
Answer 1....................................................................................................................................2
Answer 2....................................................................................................................................2
Answer 3:...................................................................................................................................3
References..................................................................................................................................4

2LEGAL RISKS IN FOREIGN BUSINESS
Answer 1
In order to minimize the legal risks in a foreign business and sign a contract paper
successfully one needs to consider the following factors:
Adapt Appropriate Clauses in the Contract: The clauses in the contract should be
discussed thoroughly and limitations to liability should be avoided such that the parties
cannot avoid responsibility if a dispute occurs.
Incorporate Reviews from Both Parties: The attorneys involved in the process of contract
agreement should obtain reviews at every stage from the parties to reduce the chances of
dispute as much as possible.
Obtain Substantial Insurance Policies: The parties should purchase insurance policies and
consider it a part of their budget because these policies can save them from ruinous losses
even if there is a dispute in the contract (Von Braun & Suseela, 2017).
Usage of the Apt Technology: If an automated process accomplishes the process of contract
management, it will reduce the chances of human errors at a significant rate. Hence, using the
right technology while signing the contract is a major step to mitigate legal risks.
Answer 2
In order to manage the associated legal risks while merging with the foreign firms one
needs to adhere to the following steps:
Build a Risk Management Framework: Based on the empirical data and forward leaning, a
simple, scalable risk management model should be built as a first measure to mitigate the
risks.

3LEGAL RISKS IN FOREIGN BUSINESS
Obtain commitment from Organization: The risk management framework should be built
for the entire enterprise and the organizational members should abide by the framework to
avoid compliance or regulatory risks (Schilke & Lumineau, 2018).
Identify the Risks: The identification of the sources of legal risks (contracts, regulation,
litigation or structural changes) is a vital step to take mitigation steps against them. All these
risks should be recorded in the risk register.
Analyse the Impact: Analysing the risk impact will help the business firms to take steps in
order to precise the chance of risks and avoid them as much as possible.
Evaluate the Mitigation Strategies: The mitigation strategies developed should be
evaluated, to implement them and manage the diverse types of legal risks.
Communicate Effectively: If the business firms communicate and converse between them to
avoid the risks or develop solutions, risks can be avoided to a maximum level.
Answer 3:
The four major contractual dispute resolution options are:
Mediation: In this process, a third party gets involved between the two business firms to help
them in resolving the contractual dispute. The third party does not provide the solution but
aids the firms in the solution constructing process (Johnson & Sohi, 2016).
Arbitration: Arbitration is another similar process like mediation but occurs at the end of the
process when the third party announces a legal solution to resolve the dispute. The concerned
parties have to adhere to the solution.
Collaborative Law: This is a process of settled agreement where the concerned firms
focuses on the rules of the collaborative law, explore solutions for resolution, identify their
own interest and ultimately adapts to a settled agreement (Bhattacharya, 2019).

4LEGAL RISKS IN FOREIGN BUSINESS
Traditional Litigation: This is the last and traditional step, where the concerned parties
move to the court for settling their contractual disputes. Consulting with an attorney is a
necessity in these cases before moving to the court.

5LEGAL RISKS IN FOREIGN BUSINESS
References
Bhattacharya, A. (2019). The Best Ways to Resolve Contractual Disputes in E-commerce1, 2.
Johnson, J. S., & Sohi, R. S. (2016). Understanding and resolving major contractual breaches
in buyer–seller relationships: a grounded theory approach. Journal of the Academy of
Marketing Science, 44(2), 185-205.
Schilke, O., & Lumineau, F. (2018). The double-edged effect of contracts on alliance
performance. Journal of Management, 44(7), 2827-2858.
Von Braun, J., & Suseela, R. (2017). Land grabbing" by foreign investors in developing
countries: risks and opportunities. International Food Policy Research Institute
Washington, DC.