International Business Law

You are the Vice-President of International Acquisitions for a small antique wholesaler, Antiques R Us Inc.

Six months ago Antiques R Us Inc. purchased from an Australian firm, Boomerang Antiques, a vase from the Ming dynasty. The relevant portions of the contract, which was in the form a letter by Antiques R Us Inc. to Boomerang Antiques, reads as follows:

“We confirm our verbal agreement to purchase from you one authentic vase from the Ming dynasty for $100,000.00, payable by us to you thirty (30) days after delivery of the vase.”

The reason for the purchase was that you knew a collector of Ming vases to whom you thought Antiques R Us Inc. could resell the vase at a handsome profit.

When the collector came to look at the vase he did not wish to purchase it and indicated to you that perhaps the vase was not authentic.

The Boomerang Antiques is demanding payment. You have advised Boomerang Antiques that Antiques R Us Inc. is unsatisfied with the authenticity of the Ming vase and were therefore not prepared to pay for it. The Boomerang Antiques has refused to accept the return of the vase and is insisting on payment.

Your boss, the President, has told you that he does not want to pay for the vase for a number of reasons:

1. There are doubts about its authenticity; and

2. Antiques R Us Inc. has a severe cash flow crunch and does not have the money to pay.

The President has instructed you to drag the matter as long as possible but to maintain good relations with Boomerang Antiques, which is an important supplier.

The President has asked you to deliver to him, by no later than 6:05 p.m., April 9, 2013 a report, in a form of a term paper of approximately 2000 words, outlining a strategy for dealing with this problem. Such term paper should not only set out the strategy, in detail, but also the alternative strategies which you considered and the reasons for choosing one particular course of action over others. Finally, he has asked you to discuss the possible disadvantages of the course of action that you recommend.

David Wise, a U.S. inventor, has developed and patented a revolutionary new running shoe that increases one’s speed significantly. His invention has achieved considerable success in the Mid-western region of the United States. Two European companies have offered him a joint venture package to take his invention to the track-happy Europeans. Barthelemy Plus Grande, S.A. is a French sportswear giant with a marketing and distribution system that includes every major city in Western Europe and massive capital resources. Pek Tarsasag, a recently privatized Hungarian firm, offers substantially lower labor costs.
Answer 2 questions:

1. Mr. Wise’s marketing experts advise him that the Japanese market is hungry for his shoes. Focusing on technology transfer issues, discuss whether he should seek a Japanese joint venture partner or enter through a wholly owned subsidiary.

2. Analyze the same issued raised in question 2, but assume Mr. Wise is considering entry into a “prior approval” country.