Legal Do's and Don'ts 4-20-2010

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Learn how to draft trouble-free contracts and agreements, key negotiating points for entering a foreign agreement, avoid legal pitfalls and protect your rights in the global arena. This seminar is part of a seven day executive training program designed to providing best practices in pursuing international opportunities and taking your business international.

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Legal Do's and Don'ts 4-20-2010

  1. 1. LEGAL DO’S AND DON’TS Presented by Yu-feng (Frances) Chou Y.F. Chou, Prof. Corp. For County of San Bernardino Economic Development Agency Center for International Trade Development April 20, 2010 © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 1
  2. 2. INTRODUCTION • Regulations – US Regulations g – Foreign Regulations •AAgreements t © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 2
  3. 3. US REGULATIONS • Export Administration Act of 1979 • Arms Export Control Act • International Emergency Economic Powers Act • Trading with Enemy Act © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 3
  4. 4. US REGULATIONS - CONTINUES • Office of Foreign Assets Control • Nuclear Regulatory Department of Energy • Multilateral Export Control Regimes • Antiboycott Laws • Foreign Corrupt Practices Act © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 4
  5. 5. FOREIGN REGULATIONS • Customs Regulations • Import Regulations • Licenses, Registrations and Permits , g • Technology Transfer Laws • Antitrust or Unfair Competition Laws • Limitations on Inbound Investment • Foreign Agency and Distribution Laws • United Nations Convention for the International Sale of Goods © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 5
  6. 6. TYPES OF AGREEMENTS • Sales Representative Agreement • Distribution Agreement • Sales Agreement © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 6
  7. 7. SCOPE OF AGREEMENTS • Parties • Type of Agreement • Products • Territory y • Exclusivity © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 7
  8. 8. RELATIONSHIP OF THE PARTIES • Independent Contractor • Exclusivity • Most Favorable Term © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 8
  9. 9. DUTIES AND OBLIGATIONS OF THE PARTIES • Clearly Set Forth Duties and Obligations • Only List Important Issues • Not an Inclusive List © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 9
  10. 10. DUTIES AND OBLIGATIONS OF THE PARTIES - Continues • Sales Representative/Distributor’s Duties and Obligations p g – Marketing Responsibilities – Customer Services – Logistical and Support Services – Advice to Manufacturer – Registrations, Licenses and Permits Requirements – Report to Manufacturer – Limitations of Authorities – No Sales Outside the Territory y – Expenses – Minimum Sales/Purchase Requirements © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 10
  11. 11. DUTIES AND OBLIGATIONS OF THE PARTIES - Continues • Additional Duties and Obligations of Distributor – Maintaining Tech and Customer Support and Minimum Inventory On Hand – Providing Sales, Advertising and Promotional Materials to Manufacturer – Providing Access to Distributor’s Facilities © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 11
  12. 12. DUTIES AND OBLIGATIONS OF THE PARTIES - Continues • Manufacturer – Providing Marketing Materials – Providing Technical Supports and Customer Services – Providing Repair and Replacement – No Obligation to Continue Production of the Same Model or Products © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 12
  13. 13. PRICING • Who Sets the Pricing • Initial Pricing v. Future Pricing • Discounts, Promotions, Credits, Returns and Refunds • Determination on Pricing for Products to be Sold by Distributor y © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 13
  14. 14. ORDER • Procedures • Shipment Date • Acceptance v. Rejection • Cancellation © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 14
  15. 15. PAYMENT • Procedures • How – Cash, L/C, D/P, D/A – Selection of Banks • When © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 15
  16. 16. PAYMENT - CONTINUES • Sales Representative – Commissions – Net Sale Price – How Much – When to Pay Commissions – How to Make Payments on Commissions y – How Often – US or Foreign Currency © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 16
  17. 17. PAYMENT AFTER TERMINATION • Order Placed and Approved But Not Shipped Prior to Termination • Order Placed But Not Approved Prior to Termination • Time Limit to Pay After Termination • Check Local Laws and Regulations © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 17
  18. 18. SHIPMENT • How • Who Pays for Shipment • Insurance • Destination • Delivery Site • Passing of Title and Risk of Loss • Replacement of Damaged Goods p g © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 18
  19. 19. INSPECTION • When • Where • By Whom • Notification of Any Problems • Independent Merchandise Surveyor © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 19
  20. 20. AUDIT RIGHTS • Mutual or Unilateral • Frequency • Written Request • During Business Hours © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 20
  21. 21. COMPLIANCE WITH LAW • Complying with US and Foreign Laws and Regulations • Manufacturer May Release Information to US or Foreign g Government Upon Proper Request © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 21
  22. 22. TERM • Length • Automatic Renewal • Quota © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 22
  23. 23. TERMINATION • Without Cause • With Cause – Default – Discontinue of Primary Business – Insolvency – Change of Laws or Regulations – Change of Currency Exchange • If Prefers, List All Causes for Termination • Cure Period • Amount of Notice • Check Local Rules and Regulations © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 23
  24. 24. REPRESENTATIONS AND WARRANTIES • Authority to Enter Into Agreement • No Agreement or Law to Prevent Performance Under the Agreement • Right to Execute the Agreement • Rights Title and Interests in the Intellectual Rights, Property Rights in the Products • Foreign Corrupt Practices Act • Keep Books and Records © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 24
  25. 25. INDEMNIFICATION • Mutual v Unilateral v. • Acts or Failure to Act • Damages and Defense © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 25
  26. 26. LIMITATION OF LIABLITY AND DISCLAIMERS • Mutual v Unilateral v. • Amount of Recovery • Types of Contractual or Tort Liabilities • Types of Damages • Merchantability M h bili • Disclaimers of All Other Warranties or Conditions C diti © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 26
  27. 27. INTELLECTUAL PROPERTY • Patent • Trademark/Service Mark • Copyright • Trade Secret • Trade Dress • Other Proprietary Rights © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 27
  28. 28. INTELLECTUAL PROPERTY • Covers Any Rights Title and Interest Rights, • Owner • Limited License Granted • Buyer s Buyer’s Design © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 28
  29. 29. CONFIDENTIALITY • Definition • Mutual or Unilateral • Non-Disclosure • Notice of Disclosure • Effect on Termination • Injunctive Relief © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 29
  30. 30. NO UNFAIR COMPETITION • General – Limitations on Trade, Profession and Business Is Unenforceable – Entity v. Individual – Independent Contractor v. Employee – Confidential Information – Restriction on Time Period – Restriction on Geographic Area – Restriction on Scope © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 30
  31. 31. NO UNFAIR COMPETITION - CONTINUES – Types of Limitations • No Representation of Competitor • No Unfair Competition • Non-Interference with Business • N S li it ti of E l Non-Solicitation f Employees • Non-Solicitation of Customers • Non-Circumvention © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 31
  32. 32. GOVERNING LAW AND JURISDICTION • US v Foreign Law/Jurisdiction v. • United Nations Convention for International Sale of Goods I t ti lS l fG d • Practicability • Enforcement © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 32
  33. 33. ARBITRATION V. LITIGATION • Advantages and Disadvantages • Arbitration – Providers • International Chambers of Commerce •A American A bit ti A i Arbitration Association i ti • London Court of International Arbitration • China International Economic Trade Arbitration Committee © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 33
  34. 34. ARBITRATION V. LITIATION - CONTINUES • Scope • Governing Rules • Location • Language g g • Procedure • Award • Enforcement © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 34
  35. 35. GENERAL PROVISIONS • Amendment • Notice • Severability • Dollar Amount • Attorney’s Fees • Survival © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 35
  36. 36. CONCLUSIONS • Each agreement is different • A short agreement is not necessary a good agreement • Seek legal advice • Do your own due diligence • Comply with all US and foreign laws • A good agreement can only get you so d t l t far © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 36
  37. 37. CONTACT INFORMATION • Yu-feng (Frances) Chou Esq Chou, Esq. • Add: Y.F. Chou, Prof. Corp. 10960 Wilshire Boulevard Suite 1225 Boulevard, Los Angeles, California 90024 • T l 310-479-8600 Tel: 310 4 9 8600 • Fax: 310-479-0699 • Email: frances@yfchou.com © 2010 Yu-feng (Frances) Chou. All Rights Reserved. 37
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