International Legal and Ethical Issue

Running head: International Legal and Ethical Issue

International Legal and Ethical Issue

Business Law BUS/415

University of Phoenix

March 8, 2008

Introduction

Disagreements are very common in international trade. Whenever a company enters into a contract with an international entity, it must ensure that the contract is legally enforceable in order to protect the company’s interest.

CadMex Pharma is a global leading pharmaceutical company that is located in Tampa, Florida. CadMex has five research centers in the United States and Europe. CadMex is committed to the development of innovative and cost-effective quality healthcare products. CadMex is well known for producing best-in-class pharmaceutical products. Gentura is a biotechnology company located in Candore. Gentura is looking to expand to global markets through strategic manufacturing and marketing alliances.

In this paper, I will discuss contract problems faced by CadMex and Gentura like breach of contract, available remedies of such breach, and make recommendation on how the situation should be handled.

Contract agreement

A series of events takes place between CadMex and Genture, which has impact on the business operations of CadMex. The contract that these two companies get into is that CadMex will license their technology and provide expertise. In return, Gentura will give CadMex the global marketing rights to the anti-diabetic agent that Gentura has developed.

Choice of Law

A choice of law clause and a forum selection clause need to be agreed upon and specified in the contract between CadMex and Gentura. The advantage of Candorean regulations (CTRIC) over Contracts for international sale of goods (CISG) is that CRTIC is enforceable as it is a local law. Additionally, CGIS may not provide desired protection for intellectual property in an international business transaction.

Forum Selection

It is beneficial for CadMex to choose International Arbitration over Candorean courts or U.S. courts. Gentura may qualify for Foreign Sovereign Immunities Act, which implies that U.S. courts may not have any jurisdiction over Gentura. On the other hand, there is risk involved in going with Candorean courts, as there is a possibility of government interference with the legal system. International arbitration is faster, less expensive, less formal, and more private than litigation.

Breach of contract

CadMex has issued license to Gentura to develop medical agents or drugs using a technique that CadMex has developed which reduces the time required to develop the medical agents or drugs. In return, of this know-how, Gentura has provided worldwide marketing rights to CadMex for the drugs that are developed using CadMex’s technology. One of the payment clauses of the contract says, “Gentura will pay the licensor, CadMex Pharma, a running royalty equal to 7.5% of Net Sales of the Licensed Product sold by the licensee protected by patent rights.” If Gentura subsidizes the production of VioBrax, the payment terms of the contract between Gentura and CadMex will be violated.

Remedies