Basic Precautions in Entering into Negotiation - Research Paper Example

MY EXTERNSHIP MY EXTERNSHIP Introduction to the Externship The externship took place in a law firm known as Company X (name withdrawn for ethical reasons). As a student, my major task was to learn from the experts and personnel that worked at the firm when it came to such duties that had to do specifically with trade contracts and agreements. I was assigned to the manager who was in charge of the purchasing division of Company X. Part of the manager’s role, which also became my learning role was to review all major international contracts of sale terms and condition, and make report to superiors about the risks that buyers could accrue by signing up to specific contract of sale. We were also expected to advise superiors on merits of contracts that were given to us to review and also to make important recommendations on how the clients, who were mostly buyers needed to approach the contract of sale. Base on this learning role that I was assigned to, I had the opportunity to learn so much about contract of sale terms and conditions, especially when it came to international contract sale terms and conditions. My learning took place by observing, performing, and also researching into international trade law. Overview of Selected Specific Topic Because we were assigned to review contract of sale involving international trades, it became necessary to learn and research deeper into international trade law. This is because it was only by knowing about international trade law that the most accurate and adequate counsel could be given as to whether or not a particular international contract of sale conformed to acceptable international standards. Once businesses and traders from different countries with their own trade regulations will take advantage of globalisation and engage in cross-country or inter-country trade it is important to have common rules and customs that guide the handling of such transactions (Fama and French, 2001). It is out of this necessity that international trade law, which has been championed by the World Trade Organisation and implemented by member countries. International trade law is important and necessary in guiding international trade activities between both private and public firms. Transactions between governments are also guided by the principles of international trade law in knowing if a particular contract of sale conforms to accepted standards and provisions. Based on international trade law therefore, it possible to give specific advice about the risks involved in a particular contract of sale. Research findings on International Trade Law There are several components of international trade law but my externship learning and research focused on three major areas as reflected in the roles that my boss and I were assigned. The outcomes of research and learning in these three areas have been presented thematically below. Basic precautions in entering into negotiation The research revealed that there are five major basic precautions that ought to be taken under international trade law before entering into negotiations with a person for any form of international trade. The first of these precautions is the need to verify the trade partner’s records (Cho, 1998). By trade partner’s record, reference is made to the trade history of the partner in knowing if the partner is in good standing and have committed to all previous contracts adequately. Secondly, the need to verify and be sure about the ability of the partner to sign contract or represent the outfit the person claims to belong to is very important. By this, reference is being made to the need for the partner to have a power of attorney (Berger, Ofek and Yermack, 2007). This provision and precaution is in line with UN Convention on contracts for all international sale of goods, which has been referred in some quarters as convention de Vienne (McConnell, J.J., and Servaes, 2010). Again, it is part of the precautions to be aware of liabilities during the actual process and time of negotiation. Furthermore, issues of confidentiality of negotiations must be clearly made known and followed. From the sources where data was collected, it was noted that one of the key issues that had to do with confidentiality of negotiations was the use of non-disclosure agreement. Last but not least, all form of pre-contract and gentleman agreements must be factored before entering into negotiations. Recognising and Assessment of risks in a contract Once all precautions have been taken and there is the assurance that the contract of sale can proceed as required in international trade law, the next most important issue to consider is the need to identify and assess risks in the contract. In this sense also, there are five major considerations that were made from the research data collection. The first is the need to define all forms of liabilities that exists in a particular contract of sale. When this is effectively done, there are always two forms of liabilities that are identified, which are civil liability and criminal liability (Soble, 2013). Based on the type of liability defined, different advice may be given to the client. Secondly, the issue of liability for delays is very important. International trade law has been noted to be in place to promote fairness and sanity within the business environment (McConnell and Servaes, 2010). Consequently, investors choose the way of international trade law through contract of sale to ensure that all forms of delays are covered and catered for. Whiles identifying and assessing risk, it is also important to focus on liability cap. As much as parties in the contract are not expected to defy their own principles, it is also important that there will be liability caps for any uncertainties so that in such cases, remedies will be available. Furthermore, guarantees and warranties must be adequately checked as these have been noted to promote fair-trade. Finally, the issue of payment terms and means of payment must all be clarified to satisfy both parties and must be known to come with no or minimal risk. Choice of law and jurisdiction clause The last area that was focused on as part of the international trade law provisions was choice of law and jurisdiction clause. Because different countries have their own trade regulations and principles, it is important for parties in any international trade and engaging in contract of sale to have a well defined choice of law that will bind transactions. International trade law recommends that regional integration be factored in the choice of law (Cho, 1998). For example, it will be advised that if both parties are from different European Union countries, the choice of law will be that which binds all European Union member states rather than that which binds one of the countries. Once this is ensured, there is the creation of a common ground where the law can be easily interpreted to suit both parties. According to Fama and French (2001), when due process is followed and the right choice of law is selected, there will be transferability of the terms of contract so that the scope of defence can be limited. It is also important to consider the jurisdiction clause especially when it comes to the choice of jurisdiction or arbitration. The international trade law principles advise that in terms of choice of arbitration, a more binding choice that can serve the interest of both parties be selected (Berger, Ofek and Yermack, 2007). Typical example of this was found in the study to be the International Chamber of Commerce Arbitration Clause. Reflection Data was collected for the findings and results that have been produced above through the use of a mixed data collection approach. The mixed approach comprised the use of both primary data and secondary data. Primary data offered me the opportunity of approaching people who I thought could offer me very insightful ideas about international trade law, especially when it came to the requirements that needed to be made. The findings produced are a refined version of the data that was collected from these people. In all, two major people were engaged in an informal interview where various questions pertaining to the requirements for international trade law were posed to them. One of these was the manager under whom I was working and the other was the public relations officer of Company X. The secondary data collection also focused on reviewing existing works of literature on the topic of international trade law. More specifically, World Trade Organisation codes on international trade laws were reviewed, as well as other related works of literature. The essence of having a mixed data collection procedure was to create an avenue where the data collected through primary strategies could be compared to what existed in literature. The externship has been a very useful exercise in building by professional and academic competence. Professionally, I have gained the practical knowhow in what goes into the roles and activities of legal consultancy firms. I have also experienced and known the nature of their work, kind of skills and attitude needed to fit in, and the level of demand on employees pursuing such careers. Because of this, I can adequately prepare myself to face the real world challenge. The study also helped in building my academic and interpersonal relations skill. This is because I had the opportunity to conduct research, the outcome of which has been very helpful in adding to my existing knowledge on international trade law. The information I received from the respondents was very useful and in line with what I expected. Through the externship, I managed to learn the skill needed in shaping my personality so as to be acceptable to all people within the organisation. It was due to this that I was able to freely approach the respondents who offered very useful thoughts to me concerning international trade law. References Berger, P. G., Ofek. E. and Yermack, D. L. (2007). “Managerial Entrenchment and Capital Structure Decisions”, Journal of Finance, 52: pp. 1411-1438. Cho, M. H. (1998). “Ownership Structure, Investment, and the Corporate Value: An Empirical Analysis”, Journal of Financial Economics, 47: pp. 103-121. Fama, F.F., and French, K.R. (2001). “Disappearing Dividends: Changing Firm Characteristics or Lower Propensity to Pay?”, Journal of Financial Economics, Vol. 60 No.6, pp. 3-43. McConnell, J.J., and Servaes, H. (2010). “Additional Evidence on Equity Ownership and Corporate Value”, Journal of Financial Economics, Vol. 27 No. 3. pp. 595-612. Soble, J.A. (2013). United States: Sale Of Goods Agreements: Common Pitfalls. [Online] November 9, 2013 from http://www.mondaq.com/unitedstates/x/238478/Contract+Law/Sale+Of+Goods+Agreements+Common+Pitfalls Read More