International Business: The New Realities, 5th Edition

Protection Through Legal Contracts

A legal contract spells out the rights and obligations of each party. Contract law varies widely from country to country, and firms must adhere to local standards. For example, a Canadian firm doing business in Belgium generally must comply with the laws of both Belgium and Canada as well as with the evolving laws of the European Union.

Firms generally employ any of three approaches for resolving international disputes.

• Conciliation is the least adversarial method. It is a formal process of negotiation with the objective to resolve differences in a friendly manner. The parties in a dispute employ a conciliator, who meets separately with each in an attempt to resolve their differences. Parties can also employ ...