What are some special issues that arise in Internet transactions involving contracts as compared to traditional transactions involving contracts?
In the contemporary society, internet transaction has grown rapidly into the most preferred means of transaction. Since internet transaction surpasses boundaries of the judiciary, several critical issues arise. The first major challenge is formulating a balanced legal obligation that involves more than one law. For instance, managing the geographical location of the agreement may prove challenging, especially when the same involves countries with different laws on the same. Besides, establishing universal acceptance formalities and verifiable content such as acceptance evidence and signatures are difficult to keep for future reference.
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Besides, there are no clear laws regulating contract agreements for international internet transactions. Moreover, litigation and arbitration venue may not be defined (Cheeseman, 2010). Generally, internet transactions still face the challenge of breach of contract in terms of substance and content of initial agreement since limited laws exist on reversing a disagreement or seeking compensation. Thus, business executives should enlist the services of a specialist in internet transaction laws to review eventual risks and provide informed mitigation before formalizing any international internet transaction.
What other contract components should the manager make sure he or she is familiar with, and why?
Besides clarity in contract formation, a business executive should critically review the aspects and assumptions of the risks involved. In practicality, it is vital to establish the premise that any contractual tenure allocates the aspect of risk between parties involved. Risk evaluation determines the possibility of optimal returns and cushion for any negative eventuality. Therefore, a critical review of the risks involved facilitates utility maximization out of a contract (Dettmer, 2003). Thus, terms of contracting should be representative of all risk aspects for the business executive to be in a position to optimize incentive hedge and reduce the magnitude of risks that may surface during and after contract formation and execution.
Think about a transaction—a contract—that you have entered into. For that transaction, discuss what legal transactional risks can arise for you, and what you can do to minimize or prevent those risks
I have signed a sales contract with Bangladore Software Provision Company based in India. This company offers online software sales services. I have purchased ten software programs via the internet and am awaiting special activation codes which are expected to reach my location within the United States of America in three days via airmail. Under the terms of the contract, I have wired payment amounting to $500 through PayPal service to the company and I have a confirmation message for received payment. The immediate risk is the fact that there is no physical presence of this company within the United States of America and the laws governing international internet transactions are relatively undefined in India.
As a risk mitigation strategy, the government of the United State of America will have to take over the claim in case of breach of contract since the laws in the U.S has a mandatory provision for seeking compensation and canceling international transactions upon producing evidence of payment (Fox, 2009). To resolve any eventual dispute, I will forward my case to the government to follow it up and seek compensation for any loss since the initial transaction was within the law.
Compare and contrast two forms of contract dispute resolution, such as mediation, arbitration, negotiation, peer-review, and mediation-arbitration
The 2012 dispute between Samsung and Apple Companies ended in a court settlement worth $107 million paid to Samsung. Negotiation involves parties in dispute working on mechanisms for breaking any existing stalemate. Under negotiation, parties involved are open to express their views and review terms, as long as the results are confidential. Unlike negotiation, arbitration ends with an independent third party imposing a binding decision on the conflicting parties (Wright, 2007). I would prefer arbitration in contract dispute resolution since the arbitrator is often an expert with independent evaluation skills on the disputed matter. Thus, an arbitrator will provide a professional settlement to the disputing parties.
Cheeseman, H. (2010). Business law: Legal environment, online commerce, business ethics, and international issues. Upper Saddle River, NJ: Prentice Hall.
Dettmer, W. (2003). Strategic Navigation: A Systems Approach to Business Strategy. Alabama: ASQ Quality Press.
Fox, W. (2009). International Commercial Agreements: A Primer on Drafting, Negotiating, and Resolving Disputes. New York: Kluwer Law International.
Wright, D. (2007). International Form of Contract User Guide, The International Purple Book. New York: IChemE.