10 legal influences ib (1)

DEPARTMENT OF BUSINESS ADMINISTRATION
INSTRUCTOR : JIGJID.SHDEPARTMENT OF BUSINESS
ADMINISTRATION

INSTRUCTOR : JIGJID.SH
Laws and regulations offer certain
guidelines and protections for
companies engaged in international
business.

To describe the different forms of legal
systems
To identify the impact of laws and
regulations on international business
To explain some ways to settle differences
in international trade relationships

Understanding foreign law will allow
you to conduct international
business and protect your interests

Legal Systems and
International
Business
There are two types of laws:
One kind of law
tells you what
to do.
Another kind of
law tells you
what not to do.
This also applies to international business.

Legal Systems and
International
Business
Three common legal systems are:
 Common law
 Civil law
 Theocratic law

Common Law
Common law, or
case law, gives a
judge flexibility
to reach a just
decision.
common law
a set of laws based on
local customs,
traditions, and
precedent
Common law is found in the
United States, Great Britain,
and in many of Great
Britain’s former colonies.

Common Law
 A judge who follows precedent looks
at decisions made by other judges in
the past when judging a current
case.
 More lawsuits are filed in common
law countries because judges in
common law systems can be flexible.

Civil Law
Judges in civil law
systems are not as
flexible as in
common law systems.
civil law
a set of codes based
on broad legal
principles
Civil law is found in Germany,
France, Japan, Russia, and
other countries.

Theocratic Law
The most common
form of
theocratic law is
found in Islamic
law.
theocratic law
a set of laws based on
religious teachings
The theocratic laws of Islam
are based on the Koran,
Islam’s holy book.

Laws and Regulations
Laws and
Regulations that
Affect Business
Product Safety
and Consumer
Protection
Labor
Laws
Intellectual
Property Laws
Licensing
Requirements

Product Safety and
Consumer Protection
Product safety and consumer
protection laws apply to those who
manufacture goods and those who
purchase goods.

Product Safety and
Consumer Protection
Manufacturers are
likely to face
liability laws.
liability
legal responsibility for
the financial cost of
another person’s
losses or injuries
Those injured from
unsafe or poorly
made goods can sue
violators for damages.

Product Safety and
Consumer Protection
 Businesses in other countries tend
not to hold other businesses
accountable as they do in the
United States.
 Extensive consumer protection and
liability laws sometimes put U.S.
businesses at a financial
disadvantage.

Labor Laws
What Labor Laws Regulate
Minimum wage rates
Length of the work week
and overtime
Hiring, firing, and layoff
policies
The age at which a
person can work
The right to form a labor
union
The right to strike

Labor Laws
 In countries with few or no
protective labor laws, businesses
may exploit workers.
 Governments may use trade
agreements, embargoes, and other
tactics to address these problems.

Intellectual Property
Laws
Piracy is the
illegal use of
intellectual
property. The use
may include
illegal copying
of films, books,
articles, and
music.
intellectual property
an original work fixed
in a tangible medium of
expression that can be
copyrighted, patented,
or trademarked

Intellectual Property
Laws
Intellectual
Property
Protections
Copyright
©
Trademark
®
Patent
Legal protection of a
creator’s intellectual
property or product
Exclusive rights to
manufacture, sell, or use
an invention which can be
a new physical product or
something that improves
an existing product
A device that
legally identifies
ownership of a
registered brand or
trade name

Intellectual Property Laws
 Many businesses demand that their
governments impose sanctions on
countries where their intellectual
property
is stolen.
 Business owners should know how much
protection to expect.

Licensing Requirements
 Multinational companies must comply with
licensing requirements.
 A license may be needed for a specific
business.
 Licensing requirements can be used by a
government as a trade barrier.

Licensing
Requirements
Addressing
Licensing
Issues
Knowing the
requirements
Meeting the
requirements in a
cost-effective
way
Successfully
completing the
paperwork

Licensing
Requirements

Resolving Legal
Disputes
Methods for
Resolving
Legal Disputes
Litigation Mediation Arbitration

Litigation
A major issue in
litigation is
deciding which
court system is
the most
appropriate.
litigation
a legal process used to
resolve a dispute
through the court
system
Litigation is slow,
expensive, and
complicated.

Resolving Legal Disputes
U.S. Courts
State Trial Court District Court Federal Court
Each court has specific processes for
working through cases as well as methods
for appealing decisions.
Most other countries have only one court system.

Mediation
For mediation to
be successful,
both disputing
parties must view
the mediator as
impartial.
mediation
a process of
intervention between
conflicting parties that
promotes resolution of
their conflict outside
the court systemA mediator is a
negotiator and
advisor.

Arbitration
Arbitration is
less expensive,
less complicated,
and faster than a
lawsuit.
arbitration
a process to resolve
disputes in which each
side presents its case
to an independent
individual, the arbiter,
who makes decisions
that are binding
The arbitrator
weighs the
evidence, and then
presents a solution.

Arbitration
Arbitrating organizations include:
 The International Court of Arbitration
of the International Chamber of
Commerce
 The International Center for Settlement
of Investment Disputes
 The United Nations

Contracts and
Avoiding
Disputes
Be as cooperative as possible.
Adhere to intellectual property laws and licensing
requirements.
Create quality goods and services that meet all legal
requirements.
Clearly discuss and write contracts and agreements.
Carefully follow the terms of contracts and agreements.
Tips for
Contracts
and
Avoiding
Disputes

10 legal influences ib (1)

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