Addressing International Legal and Ethical Issues

Essay by aimee27 August 2007

download word file, 3 pages 3.5

When conducting business outside of the United States, certain legal issues may arise. This is especially true when entering into contracts with companies internationally. When a U.S. company enters into an agreement with a company located in another country, it must ensure that the contract, which forms the basis of the agreement, is legally acceptable. The contract drafted must protect the company's interest in the foreign country against all eventualities, given that possible disagreements and disputes are common in international trade (University of Phoenix, 2005). The following simulation involved a breach of contract dispute between Gentura and CadMex Pharma concerning ViroBlax.

The city of Candore experienced a viral epidemic and treatment was necessary to contain the virus. A drug known as ViroBlax was developed by CadMex Pharma and was a remedy for the infection. Although CadMex created the product, the facilities needed to produce the product were unavailable. CadMex contacted other companies who had the amenities needed.

A contract was then put into place with the company, Gentura. In exchange for producing the product, CadMex gave the rights of ViroBlax to Gentura. This contract did not give way for the product to be subsidized to another company. Gentura then came under severe pressure from the government to subsidize the product to another company in order to produce the product quickly to save lives. Since subsidized production of ViroBlax would violate the payment terms of the contract between Gentura and Cadmex, Gentura is in breach of contract.

When reviewing remedies available for this breach of contract, two options are available. One remedy that can be used is providing CadMex with payments for royalties and other fees incurred once the epidemic is under control. The downside to this option is that Gentura would lose money since the profit margin on Gentura's...