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Legal Strategies: Exporting

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"Legal Strategies: Exporting" was presented by Martin Steger on March 2, 2012, to the College of Business and Innovation at The University of Toledo.

Martijn discussed options to enter overseas markets, contracts for the sales of goods, export control laws and other laws relevant to exporters and dispute resolution.

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Legal Strategies: Exporting

  1. 1. w w w . k e g l e r b r o w n . c o mwww.keglerbrown.com by Martijn Steger Kegler Brown Hill & Ritter Co., LPA To GlobalTarget College of Business and Innovation The University of Toledo March 2, 2012 Legal Strategies: Exporting
  2. 2. www.keglerbrown.com2 www.keglerbrown.com2 Options to Enter Overseas Markets
  3. 3. www.keglerbrown.com3 www.keglerbrown.com3 One Shot / Occasional Sales Orders • Nature of Relationship – Tenuous at first, but can grow • Advantage – Can test potential sales agent/distributor • Disadvantage – Less certainty • Considerations – How much to invest in these relationships? – How evaluate future growth prospects?
  4. 4. www.keglerbrown.com4 www.keglerbrown.com4 Agency • Nature of Relationship – Acts for and speaks for the manufacturer – Within the parameters of authority – Solicits and facilitates sales within the target country – If truly an independent agent, no authority to conclude contracts in the name of the manufacturer • Advantages – Least expensive mode of entering an overseas market – Good way to “test the waters” – Local agent familiar with customs, language and market norms of the target country
  5. 5. www.keglerbrown.com5 www.keglerbrown.com5 Agency • Disadvantages – Agent's level of loyalty – Might be somewhat dependent on agent as sole source for information – Potential misuse and manipulation of proprietary information (trademarks, methods, etc.) – Historically, many countries have more protective termination laws for agents than distributors
  6. 6. www.keglerbrown.com6 www.keglerbrown.com6 Agency • Considerations – Define the scope of agent's authority: Define actual authority; monitor apparent authority; normally, do not permit use of letterheads, business cards, etc. with your company name on it. Might be somewhat dependent on agent as sole source for information • Too much authority without supervision is not good, given the distance between the two countries and the fast pace of change in the marketplace • Agent with virtually no authority may not be able to help "close the deal" in a timely manner • Exclusivity: company's sole agent versus agent for competitors also Note: Non exclusivity might make it easier and less expensive to terminate
  7. 7. www.keglerbrown.com7 www.keglerbrown.com7 Agency • Considerations – Watch out for dependent agent being a “de facto” employee – Consider local law governing duties owed to an agent, including permissible means for, and restrictions upon, termination of agent
  8. 8. www.keglerbrown.com8 www.keglerbrown.com8 Distributorship • Nature of Relationship – Distributor purchases U.S. manufacturer's products – Resells into overseas market • Advantages – More vested interest with U.S. company than agent – Distributor becomes both a debtor of manufacturer, as well as a seller of its products
  9. 9. www.keglerbrown.com9 www.keglerbrown.com9 Distributorship • Disadvantages – Collection of payment, return of product; • Unlike agent, distributor receives product for resale • U.S. manufacturer must then collect payment from distributor and/or retrieve unsold product if no payment – Other countries' protection of distributors might be as strong as the protection afforded agents – Potential misuse and manipulation of proprietary information (trademarks, methods, etc.) • distributors more familiar with product/technology -- especially if perform repairs.
  10. 10. www.keglerbrown.com10 www.keglerbrown.com10 Distributorship • Considerations – Exclusivity or non-exclusivity and other territorial rights: • Contracts must contain specific definitions of distributor's – Territory – Its authorized products – Its obligation, if any, not to sell or manufacture competing products • Watch out for restrictions on post-contract non-competition covenants in E.U. and elsewhere. – Terms of payment and product retrieval: • Pre-payment? Consignment? • Letters of credit.
  11. 11. www.keglerbrown.com11 www.keglerbrown.com11 Distributorship • Considerations – Termination • How much notice is required under local law? • Payment (“indemnity”) to distributor required on termination? – might depend on whether for cause or not. – Key: spell out minimum sales requirements – Or, provide for termination without cause (if permissible)
  12. 12. www.keglerbrown.com12 www.keglerbrown.com12 Joint Venture • Nature of Relationship – Usually -- Partnership arrangement with local entity – Costs, profits and losses shared in some way • Advantages – Limitation of risk -- risk of failure or losses are shared – Greater vested interest in and allegiance to U.S. company – Limitation of investment -- permits joint venturers to participate in deals that would be beyond their individual financial resources
  13. 13. www.keglerbrown.com13 www.keglerbrown.com13 Joint Venture • Advantages – Combines skills -- success of the project might depend on sharing of technology or personnel skills – U.S. company not dependent on independent person for information about local market – Control by overseas entity and use of its name may remove any badge of foreign stigma
  14. 14. www.keglerbrown.com14 www.keglerbrown.com14 Joint Venture • Disadvantages – Greater commitment of resource and limitation on profits shared – U.S. company might not be permitted to achieve or to maintain majority ownership of joint venture – Might be restrictions on repatriation of profits – Joint ventures often fail: Over 50 percent in first 5 years
  15. 15. www.keglerbrown.com15 www.keglerbrown.com15 Joint Venture • Considerations – U.S. company's control and influence over the co-venturer • Shareholder percentage and voting rights • Director positions • Access to revenues • Voice in management • Caution: Some countries have severe restrictions - e.g., low cap on royalty amounts (e.g., 5 % ) – Others might not permit payments based solely on a percentage of sales for non-patented items • Note: Many countries have a withholding tax on royalties: factor it into pricing
  16. 16. www.keglerbrown.com16 www.keglerbrown.com16 Joint Venture • Considerations – Complex taxation issues. – Miscellaneous considerations: • Restrictions on overseas participation (as investor, officer, director) • Amount, timing and type of initial capital • Mechanism for provision of additional capital • Consider issue of third-party loans
  17. 17. www.keglerbrown.com17 www.keglerbrown.com17 Joint Venture Alternatives • Can also operate internationally by setting up a branch or wholly- owned subsidiary. Can be a corporation or limited liability company • Consider technology licensing arrangements with or without a joint venture. • Teaming Agreements can be contractual arrangement not constituting a partnership (clauses include confidentiality, sharing of expenses and exclusivity)
  18. 18. www.keglerbrown.com18 www.keglerbrown.com18 Branch • Nature of Relationship – E.g., employee providing sales of goods or services – Usually not incorporated under other countries’ laws • Advantages – More control than with agent or distributor • Disadvantages – More tax issues than with agent or distributor – Consider tax treaties and “permanent establishment”
  19. 19. www.keglerbrown.com19 www.keglerbrown.com19 Branch • Considerations – Permanent establishment -- usually fixed place of business including office, place of management, factory, workshop, or a representative / employee who has authority to conclude contracts on behalf of company • Results in tax considerations – If no permanent establishment -- usually avoids or limits other country’s tax on profits
  20. 20. www.keglerbrown.com20 www.keglerbrown.com20 Subsidiary • Nature of Relationship – Usually incorporated under other country’s law – May be wholly or partly owned by non-U.S. person • Advantages – More control • Disadvantages – More tax issues than with agent or distributor • Considerations – Tax-driven, for the most part. Consider tax treaties – Size of market; need for high-level presence in market
  21. 21. www.keglerbrown.com21 www.keglerbrown.com21 Contracts for the Sale of Goods
  22. 22. www.keglerbrown.com22 www.keglerbrown.com22 The Uniform Commercial Code (“U.C.C.”) • Recognition – Sales of "goods" in the U.S. – The U.C.C., in some form, is adopted by all U.S. States • Definition of “Goods” – Things which are movable. Includes tangible goods, but generally not services
  23. 23. www.keglerbrown.com23 www.keglerbrown.com23 The Uniform Commercial Code (“U.C.C.”) • Purpose – Promotes commonality and a reasonable set of standards to encourage interstate commerce – Provides a series of "gap fillers" for unaddressed issues in the contract • E.g., in absence of specific price provision, "Reasonable Price." • Governing Law – One State’s version of the U.C.C. becomes the "governing law" for the sale of goods among domestic merchants and possibly in an international transaction
  24. 24. www.keglerbrown.com24 www.keglerbrown.com24 The United Nations Convention on Contracts for the International Sale of Goods (CISG) • Recognition – Endorsed by the United Nations and adopted in some form by over 75 countries (including the U.S.). • Definition of “Goods” – Most products, but not intangibles; not sales of goods to consumers and not sales of services.
  25. 25. www.keglerbrown.com25 www.keglerbrown.com25 The United Nations Convention on Contracts for the International Sale of Goods (“CISG”) • Purpose – Promote commonality of trade practices to bridge the gap between developed and lesser developed countries – Provide source of "gap fillers" for unaddressed issues in sales contracts • E.g. provision regarding revocation; • E.g. notice provision regarding non-conforming goods. • Governing Law – Is "governing law" for contracts entered into between companies located in member states, unless specifically excluded.
  26. 26. www.keglerbrown.com26 www.keglerbrown.com26 U.C.C. and CISG • Products Liability – The CISG specifically "does not apply to the liability of the seller for death or personal injury caused by the goods to any person." (Article 5). – Neither does the UCC, but other product liability laws, e.g., Ohio, might apply. Other country’s law might be better on this issue. • "Parol Evidence": Evidence not within the four corners of the written contract. – CISG gives greater weight to parol evidence than does U.C.C. – Note: Interpret in light of other agreements, including Terms and Conditions of Sale or Purchase • CISG does not require that contracts for goods valued above $500 be in writing. (Article 11), but dangerous to rely on oral contracts – Note: Letter of Credit is a contract too
  27. 27. www.keglerbrown.com27 www.keglerbrown.com27 Considerations in Drafting Sales Agreements • Cover all important issues in written agreement • Keys to reduce risk of litigation: – If important, propose and negotiate it – If important, put it in writing • Clear, precise language – Do not rely on ambiguity, if the issue is important – Most litigation is over ambiguous or omitted terms – You have a right to expect clear, precise language from your lawyer; not “legal mumbo jumbo” as opposed to legal terms of art
  28. 28. www.keglerbrown.com28 www.keglerbrown.com28 Considerations in Drafting Sales Agreements • Description of goods or services – Be complete; quantity; quality. – Be careful of ambiguous short-hand descriptions – Itemize separately (might limit dispute to one type of good sold) • Price – Price goods and services separately (maybe even separate contracts): services performed in other country might be taxed there. – Specify currency – CISG -- Article 50 -- permits buyer to decrease price for non-conforming goods.
  29. 29. www.keglerbrown.com29 www.keglerbrown.com29 Considerations in Drafting Sales Agreements • Delivery – Specify if partial deliveries require separate payments. Otherwise, you will get payment when full delivery is made – If use terms of art (e.g.: EXW, FCA, etc.) refer to definition -- e.g. INCOTERMS • Taxes – Normally -- each party pays own taxes (vs. imputed income) – Note: Usually no income taxes by other country if no permanent establishment, but common requirement to withhold taxes on royalty payments
  30. 30. www.keglerbrown.com30 www.keglerbrown.com30 Considerations in Drafting Sales Agreements • Insurance – Delivery terms, e.g. INCOTERMS - define when risk of loss passes to the buyer – Make sure shipment is insured -- regardless of who pays and when risk of loss passes • Limitations on liability – Consider limiting damages to the purchase price (if permissible) • Normally, seller wants to avoid liquidated damages – Exclude consequential damages – define as lost profits, etc. – Limit time within which damages recoverable
  31. 31. www.keglerbrown.com31 www.keglerbrown.com31 Considerations in Drafting Sales Agreements • Scope of any Warranty – Spell out any warranties and limitations / exclusions – E.g., if repair warranty, where done? Who pays for shipment if repairs not on-site? • Good faith – Reasonableness and fairness is critical to long-term relationships – Required by UCC and CISG – Usually required by courts in practice anyway
  32. 32. www.keglerbrown.com32 www.keglerbrown.com32 Considerations in Drafting Sales Agreements • Confidentiality – Clearly identify information as confidential (e.g. software, trade secrets, etc.) – Specify: confidentiality obligations survive termination – Some countries render confidentiality clauses ineffective after X number of years • Intellectual property rights – IPR are crucial & discussed later
  33. 33. www.keglerbrown.com33 www.keglerbrown.com33 Considerations in Drafting Sales Agreements • Compliance with laws and standards – Make buyer responsible for compliance with its own laws, regulations, permits, etc. – Provide for buyer to indemnify you for any failure to comply with its country's laws – Note: Indemnification = private insurance • Duration and Termination – Normally start with short duration – Enforceability of termination clause under local law is key. Allow U.S. lawyer to consult with local counsel – Often very protective legislation – Note: EU Directive: Agent gets at least same minimum notice as principal • Compensation / Indemnity Payments
  34. 34. www.keglerbrown.com34 www.keglerbrown.com34 Considerations in Drafting Sales Agreements • Force Majeure – Should specify: • Acceptable impediments • Means to certify their existence and • Consequences of their existence (delay performance; void contract, etc.?) must be specified in some countries – Boilerplate is dangerous • Remedies – Specify consequences of breach clearly – Consider “notice” and “opportunity to cure” provisions
  35. 35. www.keglerbrown.com35 www.keglerbrown.com35 Considerations in Drafting Sales Agreements • Choice of Law – CISG: Companies in member states not wishing to apply the CISG to the contract must specifically reject implementation of the CISG. – Note: Just stating that Ohio law will apply is often not sufficient. The CISG is Ohio law for a contract between Ohio company and company in "member country" (e.g., Canada, China, but not India). – Note: Choose governing language. – Note: To discourage litigation, consider a clause that says whoever files a suit or arbitration, the law of the other side's country governs (and must be filed in their forum). This is very controversial and can be a disadvantage to the U.S. company.
  36. 36. www.keglerbrown.com36 www.keglerbrown.com36 Considerations in Drafting Sales Agreements • Choice of Forum – Usually same state/country as choice of law. – Often omitted – Can be critical to discourage litigation • Dispute Resolution – Can choose • an accountant to resolve accounting type issues • an arbitrator for certain other issues and • litigation for even other issues (e.g., when injunctive relief required – such as for violation of trade secrets.)
  37. 37. www.keglerbrown.com37 www.keglerbrown.com37 Export Control Laws and Other Laws Relevant to Exporters
  38. 38. www.keglerbrown.com38 www.keglerbrown.com38 Foreign Corrupt Practices Act (“FCPA”) • FCPA makes into U.S. crimes the commission of foreign corrupt practices – Anti-bribery provisions apply to U.S. entities, individuals and to persons acting on their behalf, including overseas affiliates and agents of U.S. entities – Accounting provisions apply to entities subject to the Securities and Exchange Commission
  39. 39. www.keglerbrown.com39 www.keglerbrown.com39 Office of Foreign Assets Control (“OFAC”) • Administered by U.S. Department of Treasury. • OFAC acts to prevent “prohibited transactions” -- primarily “trade or financial transactions” -- with countries and persons against whom sanctions and embargoes are in place • U.S. persons may not trade or have other dealings with them unless authorized by OFAC or expressly exempted by statute
  40. 40. www.keglerbrown.com40 www.keglerbrown.com40 Antiterrorism Laws • 1996 Antiterrorism and Effective Death Penalty Act and the 2001 USA Patriot Act make it a crime for a person to provide “material support” to a foreign organization engaged in terrorist activity • “Material Support” defined broadly • Some organizations with innocent-sounding names may mask terrorist activities. Check the relevant lists
  41. 41. www.keglerbrown.com41 www.keglerbrown.com41 Trade with the Enemy Act (“TWEA”) • TWEA restricts U.S. entities and persons trading with countries hostile to the U.S. • Law gives President power to oversee or restrict any and all trade between the U.S. and its enemies in times of war
  42. 42. www.keglerbrown.com42 www.keglerbrown.com42 International Traffic in Arms Regulations (“ITAR”) • ITAR is an export control law administered by the U.S. Department of State (“DOS”) • ITAR governs “export” of any “defense articles” and “defense services” • “Defense articles” are identified in the U.S. Munitions List (Part 121 of ITAR)
  43. 43. www.keglerbrown.com43 www.keglerbrown.com43 International Traffic in Arms Regulations (“ITAR”) – “Defense services” broadly defined to include furnishing assistance to foreign persons in the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction, processing or use of a “defense article” – License from the DOS is required before any defense service or article may be “exported” – “Export” includes showing controlled information, data or products to a “foreign person,” whether in US or elsewhere.
  44. 44. www.keglerbrown.com44 www.keglerbrown.com44 Export Administration Regulations (“EAR”) • Administered by U.S. Commerce Department. • EAR governs U.S.-origin, dual-use items, meaning those can be used for both commercial and military applications • Apply to the transfer/export of all such products, data and services by U.S. persons • Must check the Commerce Control List (“CCL”).
  45. 45. www.keglerbrown.com45 www.keglerbrown.com45 U.S. Antitrust Laws • Pursuant to U.S. antitrust laws, U.S. asserts antitrust jurisdiction over certain actions, even if they take place outside U.S. borders. • The primary test is whether they have “intended or actual,” “substantial or foreseeable” effects within the U.S.
  46. 46. www.keglerbrown.com46 www.keglerbrown.com46 Summary: Export Control and Related Laws • Overall, enforcement has increased in recent years • Penalties are very severe, including prison sentences and financial penalties, including as much as $500,000 per violation • Laws are very complex and relevant lists are updated periodically, so do not rely on historical knowledge
  47. 47. www.keglerbrown.com47 www.keglerbrown.com47 Intellectual Property
  48. 48. www.keglerbrown.com48 www.keglerbrown.com48 Protect Your Intellectual Property Against Misuse by Your Overseas “Partner” • Must be provided for in your written agreement – Often, missing or inadequate in “form contracts” – Critical because usually intellectual property is often a very valuable part of a company’s business – U.S. Courts have extended protection of U.S. trademark law, for example, to violations by companies acting outside of U.S., so long as some effect on U.S. Commerce.
  49. 49. www.keglerbrown.com49 www.keglerbrown.com49 Protect Your Intellectual Property Against Misuse by Your Overseas “Partner” • Related considerations: – Specify injunctive relief to prevent continued misuse once it is discovered Often, damages are too little too late – A non-competition clause is usually appropriate and can provide powerful protection along with a clause forbidding misuse of IP – Require overseas representative to use only your Trademarks on your goods – Consider separate license agreements (some countries require them) – Make sure restrictive provisions are permissible & make sure any “magic words” are incorporated • Caution: Some countries require transfer of some or all IP rights to local representatives after certain period of time.
  50. 50. www.keglerbrown.com50 www.keglerbrown.com50 Protect Your Intellectual Property From Misuse by Others in Overseas Markets – Must take steps to protect your IP rights in any current market and those in which you expect to sell in near future -- Register before first product shipped. – Protection, if properly obtained, can help you both against overseas companies and U.S. companies acting in those markets – E.g., you have a U.S. patent for technology that will be sold in other countries, which are members of an International Patent Convention. You can gain certain important benefits by applying for registration of your patent in those countries within a certain time frame
  51. 51. www.keglerbrown.com51 www.keglerbrown.com51 Protect Your Intellectual Property From Misuse by Others in Overseas Markets • Considerations – Particularly with products difficult to reverse engineer, formal patent protection may not be desirable -- because the patent application is public and patent protection in most countries is only 15 to 20 years – Tip: Determine quickly whether your IP needs protection via registration in overseas markets. • If so, promptly take the necessary legal steps • If not, consider implementing “trade secret” steps
  52. 52. www.keglerbrown.com52 www.keglerbrown.com52 Dispute Resolution
  53. 53. www.keglerbrown.com53 www.keglerbrown.com53 Dispute Resolution • KEY: Must consider these issues before and during contract negotiations – Do not let the excitement of Your Impending “Business Marriage” Cloud Your Judgment!
  54. 54. www.keglerbrown.com54 www.keglerbrown.com54 Mediation • What is it? – Usually an informal process, with few established rules – Often uses independent mediator, who may or may not be experienced in the particular business sector – Technically not binding • Advantages – Can be least expensive method of dispute resolution – Even though not binding, might be effective because of the threat of costly arbitration or litigation
  55. 55. www.keglerbrown.com55 www.keglerbrown.com55 Mediation • Disadvantages – Can be hard to know what the ground rules are, or to define them in advance – Can simply add another level of expense to ultimate arbitration or litigation, if mediation is not successful – Depending upon the relationship of the parties at the time of the dispute, can be entirely a waste of time – Mediators can act like “Solomon” and seem arbitrary • Considerations – Selection of mediator – Choice of ground rules
  56. 56. www.keglerbrown.com56 www.keglerbrown.com56 Arbitration • What is It? – More formal procedure than mediation – Usuallygoverned by the parties’ choice of rules of, for example, the American Arbitration Association or some overseas arbitral body. -- E.g., The Hague; London; Hong Kong
  57. 57. www.keglerbrown.com57 www.keglerbrown.com57 Arbitration • Advantages – Might less expensive than litigation, but is more expensive than mediation – Might be quicker than litigation – Its greater informality, compared to litigation, can make the process less of a drain on the company's employees, especially if discovery is limited – If properly chosen, arbitration judgments are enforceable in many countries, particularly those that have signed the U.N. Convention for Enforcement of Foreign Arbitral Awards (the “1958 New York Convention”)
  58. 58. www.keglerbrown.com58 www.keglerbrown.com58 Arbitration • Disadvantages – Expenses, such as filing fees and fees for arbitrators, in overseas arbitrations, particularly can be quite high • E.g., International Chamber of Commerce Rules – Some greater risk of an arbitrary result – Depending on the court (which could have been selected in place of arbitrator), arbitration is not always quicker
  59. 59. www.keglerbrown.com59 www.keglerbrown.com59 Arbitration • Considerations – Select location of arbitration – Select number and qualifications of arbitrator(s) – Determine if the overseas party is from a country that is a signatory of the 1958 New York Convention – Determine likely fees and weigh advantages and disadvantages versus mediation and litigation – Will the arbitration decision be final or appeals allowed? – Enforceability. Key question is where are the assets against which any decision would be enforced?
  60. 60. www.keglerbrown.com60 www.keglerbrown.com60 Litigation • What is It? – Most of you are familiar with U.S. litigation (unfortunately), but litigation in other countries can be radically different – Examples: Unavailability of legal remedies, such as lost profits, punitive damages – Also, procedures such as discovery or cross examination at trial are often severely limited – Often, no jury
  61. 61. www.keglerbrown.com61 www.keglerbrown.com61 Litigation • Advantages – Depending on country, relief a court may award could be broader than by an arbitrator – Court rules are usually clearer and more consistently applied. • This can result in fewer fights over what rules should be applied and how they are interpreted – If you are plaintiff, and you are in a court with a fast track, justice can occasionally be fairly swift – Sometimes, discovery can reveal critical "smoking guns" which you may never learn about in a mediation or arbitration • This can be critical in fraud cases, for example.
  62. 62. www.keglerbrown.com62 www.keglerbrown.com62 Litigation • Disadvantages – Cost – Disruption to employees from discovery – Time to get a decision, especially with appeals – Potential unenforceability (in other countries) of judgments, particularly those including certain forms of relief, such as punitive damages • Considerations – Same considerations as above concerning mediation and arbitration.
  63. 63. www.keglerbrown.com63 www.keglerbrown.com63 Hague Convention on Discovery • Must be Considered If Litigation is Chosen • Practical Pointer – If you chose litigation in U.S. Courts, and the overseas party complies with that provision and sues in the U.S. Courts, you may be able to force them to bring their employees to the U.S. for deposition • Hague Convention Can Help, and Occasionally Hinder, Discovery of Documents and From Witnesses Abroad
  64. 64. www.keglerbrown.com64 www.keglerbrown.com64 Hague Service Convention • Scope – Most industrialized countries are signatories, but many of them have exceptions to overseas service of process – Tip: Provide for agreed-upon easy methods of service of process in the agreement
  65. 65. www.keglerbrown.com65 www.keglerbrown.com65 Choice of Law • Importance – Relief available varies greatly from country to country – Often, form contracts, such as purchase orders, will contain choice-of-law provisions. Pay attention to them – Usually try to avoid “Battle of the Forms”
  66. 66. www.keglerbrown.com66 www.keglerbrown.com66 Choice of Forum • Importance – This is often overlooked, but can be more important than choice of law. – If choice of law is made, without choice of forum, it can create a legal battle over where the dispute will be resolved • Home Court Advantage
  67. 67. www.keglerbrown.com67 www.keglerbrown.com67 Miscellaneous Legal Considerations
  68. 68. www.keglerbrown.com68 www.keglerbrown.com68 Timing Of Use of U.S. Counsel • Business Planning Stage – KEY: Define your Goals! – Legal considerations can radically affect your business plan • Negotiations Stage – If you wait until the end of negotiations to bring in legal counsel to draft the agreement, it can be very difficult to change provisions agreed upon orally – Written agreements – What is a contract?
  69. 69. www.keglerbrown.com69 www.keglerbrown.com69 Timing Of Use of U.S. Counsel – Written agreements can make disputes less likely and reduce the costs of them. – Importance of writing clearly and in plain English. • Your lawyer should write in clear English • Need for concise legal documents, especially in overseas transactions
  70. 70. www.keglerbrown.com70 www.keglerbrown.com70 Use of Overseas Legal Counsel • Work Through Your U.S. Counsel – For example, Kegler Brown has relationships with overseas counsel in major industrial centers around the world. • Use U.S. Counsel Experienced in Working with Overseas Counsel as a “Reality Check” – U.S. Counsel can help to frame relevant questions and interpret the answers • Importance of Overseas Law even if Ohio law governs – You must be able to enforce any judgment in the other country unless the other party has sufficient assets are in the U.S. to satisfy any judgment in your favor and those assets are not easily moved
  71. 71. www.keglerbrown.com71 www.keglerbrown.com71 Conclusion
  72. 72. www.keglerbrown.com72 www.keglerbrown.com72 Conclusion • Exporting is not just a small change from domestic/U.S. transactions • You cannot use the same contract terms for both • Always define, question and refine your goals and strategies
  73. 73. www.keglerbrown.com73 www.keglerbrown.com73 Thank You Please Note: Information in this Power Point is intended to give the reader an overview of many of the issues involved in the negotiation and performance of international transactions. It cannot be considered as legal advice, in part because the relevant facts and applicable law will vary from one transaction to another. Your lawyer should be consulted on the issues relating to your particular international transaction. Copyright 2012 - S. Martijn Steger Kegler Brown Hill & Ritter Co., LPA Direct Dial: 614 462 5495 Email: msteger@keglerbrown.com Web: www.keglerbrownglobal.com