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Assume that you are the director of an Australian company that does business in a number of overseas countries. Your company has decided that there is an opportunity to do business in the country that you researched in Assessment 1 (chosen country).

Your task is to prepare a written document appropriately referenced, that address the following matters:

  1. State the nature of business your company is involved in. Be as creative as possible. For example, you may decide that you are a manufacturer who wishes to export goods to the chosen country. Alternatively, your company may provide services which can be offered in the chosen country or your company may wish to import goods and/services from the chosen country.
  2. Explain in as much details as possible the business opportunity that has arisen for the company.

Making contracts is fundamental to business practice. Your company will need to make contracts in the scenario country. Please ensure you

Identify the types of contracts that your business would need to enter in order to do business successfully in the scenario country. Explain why these contracts are necessary. Identify and explain the sources of contract law in the chosen country.

Identify and explain the legal requirements for the creation of a valid contract in the chosen country.

Explain the remedies for breach of contract in chosen country.

Discuss whether it would be necessary to appoint an agent in the chosen country and an explanation for your decision.

Identify whether Australia has a Free Trade Agreement with chosen country and explain the implications of this.

Identify any specific regulations that apply in the chosen country based on the nature of your company’s business.

Discussion

This paper discusses that the nation of Russia is the chosen nation where business is to be conducted. The manufacturer is keen on doing business and trade with the nation of Russia. The manufacturer is particularly involved in the business of firearms and ammunitions (Puffer et. al., 2018). The manufacturer is inclined to export firearms and ammunitions to the nation of Russia. It is discussed in this paper that the manufacturing organization must establish an agreement regarding purchase and sale with the nation of Russia and the contract must be changed and modified as per the ideals and principles related to the Vienna Convention in relation to the International Sale and Purchase of Goods. Such modification needs to be done because the nation of Russia is a signatory in relation to this particular Convention. This paper discusses the various sources regarding contract in the nation of Russia. This paper mentions that business custom, binding and obligatory case laws and statutory laws are the different sources regarding contract in the nation of Russia (Ershova, 2017). It has been mentioned in this paper that in order to establish a valid and effective contract the essential requirements must be met. The essentials regarding a valid and obligatory contract involve parties regarding the contract, the intention regarding legal commitments, free consent, competency regarding the parties and a lawful consideration. The remedies in relation to the violations caused regarding any particular contract has been mentioned in this paper. This paper also focuses on the employment and the appointment of representatives and agents in the nation of Russia in order to conduct business and trade relating to firearms. This paper have provided discussion regarding free-trade agreements and whether such agreement exist between the nation of Australia and the nation of Russia. Certain legislations regarding firearms in relation to the nation of Russia have been mentioned in this paper.

The Russian manner of undertaking trade, commerce and business is profoundly and comprehensively prejudiced by the cultural and traditional context and framework of the nation and the Soviet history of the nation (Epifanova et. al., 2015). The communist history of the nation favored ‘collectivism’ as a particular manner of life. However, the current economic and political situation distinguishes and recognizes individuality. The World Bank considers the nation of Russia as among the most difficult regions where doing or conducting any trade or business is challenging (Kusznir, 2016). The business and trade negotiations of the nation of Russia are characterized by a blending and amalgamation of manipulative conduct or behavior and rigid and firm approach.

Types of contracts that are required to be established for doing business and trade successfully in the nation of Russia

The contracts that are most commonly utilized by the foreign organizations and companies, which may start and continue business or trade in the nation of Russia, are as follows:-

  • Agreement regarding purchase and sale: This contract is required in relation to the import and the export of commodities and goods that the foreign organizations and companies engage in, with the nation of Russia. It is mentioned that the contract must be changed and modified as per the ideals and principles related to the Vienna Convention in relation to the International Sale and Purchase of Goods. Such modification needs to be done because the nation of Russia is a signatory in relation to this particular Convention (Maksim, Irina & Olga, 2015).
  • Distribution Contract: This contract is required when a particular foreign organization or company appoints a Russian organization or company in order to distribute its commodities and goods in the region of the nation of Russia or only a part of the region. The Russian organization again sells the commodities and the products to the manufacturing organizations in case of machinery and supplies related to industries, and to the retailers in case the commodities are consumer products (Epifanova et. al., 2015).
  • Supply Contract: This contract is required when the foreign organization makes supply of the commodities and products on a constant and steady basis, to the Russian organizations. The Russian organizations utilize the commodities for manufacturing methods and procedures.  
  • Agency Contract: An agent may be appointed by the foreign organization, who might be a legal entity or a natural individual, in order to seek clients and give effect to transactions, specifically in the region of the nation of Russia. Commissions and fees are provided to the agent according to the sales that is achieved by the agent.
  • Representation Contract: This contract is parallel to contract relating to agency. In this case, the representative may negotiate the conditions of the sale regarding the commodities, with the Russian organization, as per the commands and clauses that is directed by the foreign organization (Gurkov, 2016).
  • Consultancy Services Contract: This contract is utilized by foreign organizations that offer Russian organizations a varied and extensive series of facilities and services such as management of business, consultancy, training, teaching and research of the market.
  • Non-Disclosure and Confidentiality Agreement: This agreement between the Russian and the foreign organizations, is utilized in case of introductory and initial negotiations prior to licensing, distribution and strategic alliance.

However, the law of the nation of Australia restricts indirect or direct supply, transfer or sale to the nation of Russia in relation to utilization of the commodities by Russia and for the benefit. Such commodities include arms or materials related to it (Besley, 2015).

The Minister regarding Foreign Affairs may allow sanctions, approvals and permits that may authorize any such activity, which may contradict such restrictions, only when the Minister is satisfied that such activity is in relation to the welfare and national interest of the nation of Australia (Wagner & Disparte, 2016).

The contract law of the nation of Russia embodies three primary sources, that is, business custom, case law and statutory law. Hence, the pursuit and exploration in relation to the rules of the modern contract law of Russia reviews past statutory law and dives into zones of market place activities and judicial lawmaking (Orlov, 2016).

The first primary source is the statutory law. It is considered as the most inclusive and wide-ranging quintessence of the rules that govern the contract law of the nation of Russia. This law is separated and allocated into two distinct parts. One part comprises the general laws regarding contract. Another part deals comprises the special laws regarding 29 separate and singular nominate contracts (Volkova et. al., 2015).

The second primary source is binding and obligatory case law or ‘normative judicial legislation’. The Supreme Court of the nation of Russia delivers these decrees and rules in the system and arrangement of advisory opinions and ideas (Graziano, 2019).

The third primary source is the business custom. This source involves any particular general rule in relation to conduct, for instance, any method that is accepted traditionally regarding the performance of definite kinds of responsibility or accountability, which is broadly acknowledged in any particular range of business related activity, including customs relating to international business (Smits, 2017).

The essentials for the establishment of a valid contract are as follows:-

  • Two parties: A valid and enforceable contract shall include the involvement of minimum two parties. One party shall forward the proposal and another party shall accept and assent to the proposal. The parties to the contract shall have legal existence, that is, legal entities (organizations, schools, companies) and natural individuals (Shashkova, 2015).
  • Intention for legal commitments: The parties that may be involved shall have clear and unambiguous intentions for the creation and the establishment of legal relationship between them. Hence, it means that any particular domestic or social agreements cannot established as contracts (Nagurnanova, 2015).
  • Free consent: The idea of consent is significant in relation to a valid contract and hence, consent is significant regarding a valid and effective contract. No party to a contract shall be coerced or forced to give effect to a particular contract; it must be done with a free consent.
  • Competency regarding the parties: The parties to the contract must be competent to contract, that is, the parties to a particular contract should have the capacity to entirely understand and comprehend the terms, which are mentioned in that particular contract, and during the time the contract is formulated.
  • Consideration and it must be lawful: There must be a consideration regarding the contract that is established. It may be in any form and the consideration must be lawful and not illegal (Lyutov, 2019).

The violation of any particular may be referred to the failure to perform any particular term or condition regarding the contract in the absence of any kind of legitimate and genuine excuse of legal nature. Usually, the typical violation of contract relate to judicial remedies in connection to monetary damages, specific performance and injunction orders. Preliminary and initial injunction procedures and actions shall be utilized in instances of repudiatory violation regarding contract, material violation regarding contract or violation of contract in the nature of tort law (Savelyev, 2017).

Sources of Contract law in Russia

Usually, the purchaser contains two primary rights in the instance where the violation is caused by seller. The purchaser may return the commodity to the seller in lieu of the value paid by the purchaser earlier and possibly make a claim in relation to compensation for other expenses incurred by the purchaser. The purchaser may demand a reduction in the price and discount in relation to the commodities. These rights are in relation to implied warranties (Giliker, 2016).

Regarding consequential loss, damages in order to recuperate consequential loss may be demanded; although it shall be problematic and challenging to prove and demonstrate in the court. The courts are generally unwilling and unenthusiastic to compensate for huge sums of damages, specifically those that are in relation to consequential loss (Sanford & Stratigopoulos, 2018).  

Regarding loss of revenues or profits, damages in order to recuperate loss of revenue or profit may be demanded. However, it is problematic and challenging to prove in the court. The courts are generally unwilling and unenthusiastic to compensate for huge sums of damages, specifically those that are in relation to loss of revenues or profits (Sitdikova et. al., 2016).    

Provisions relating to grossing up are generally unenforceable. However, in certain instances, they are incidentally dispensed with the help of pricing expectations, norms and assumptions.

It is necessary and important to employ and appoint a representative or an agent in the nation of Russia. The organization shall employ and appoint any particular legal entity or a natural individual, in order to seek clients and give effect to transactions, specifically in the region of the nation of Russia. The representative or agent shall be paid commission or fees in relation to sales that is achieved by this particular representative or agent. An agency contract or a representation contract needs to be established with the representative or the agent. It shall be helpful if a representative or an agent, who is a local resident of the area in the nation of Russia, where the business shall be conducted, is employed and appointed (Shevchenko, 2017).

Inclusive and wide-ranging Free Trade Agreements (FTAs) reinforce the economic relationships of the nation of Australia, and deliver Australians with enhanced and improved entree to crucial trading markets transversely a series of business and trade interests, including services, goods, venture and investment. They offer and deliver businesses and trades with a competitive superiority in relation to new markets (Kugiel, 2017).

Legal essentials for establishment of valid contract in Russia

Contact between the nation of Australia and the nation of Russia started in the year of 1807. Consular relations between the two nations started in the year 1857 and diplomatic relations in the year 1942. An embassy was established by the nation of Russia in the year 1943. The nation of Russia has embassy in the city of Canberra, in the nation of Australia. These two nations have engaged in several significant multilateral and international meetings and opportunities, including matters regarding regional security.

However, there is no bilateral free-trade agreement between the aforementioned two nations. However, the law of the nation of Australia restricts indirect or direct supply, transfer or sale to the nation of Russia in relation to utilization of the commodities by Russia and for the benefit. Such commodities include arms or materials related to it. The Minister regarding Foreign Affairs may allow sanctions, approvals and permits that may authorize any such activity, which may contradict such restrictions, only when the Minister is satisfied that such activity is in relation to the welfare and national interest of the nation of Australia. Therefore, in order to export firearms to the nation of Russia, the organization of the nation of Australia must convince the Minister regarding Foreign Affairs.

The primary legislation in relation to firearms in the nation of Russia is the Federal Law on Weapons. This legislation contains provisions regarding the firearms in the nation of Russia. Other legislations include Criminal Code of Russian Federation and Federal laws regarding state protection and countering terrorism, which contains provisions in relation to firearms.

Conclusion

In order to conclude it may be stated that there are several things that might be considered and there are several procedures that an organization must go through, if any particular organization or any particular individual is inclined to start and continue a specific business or trade in the nation of Russia. Any organization or any individual planning to do trade or business in the nation of Russia must begin the procedures keeping in mind the basic considerations like whether one may be able to operate legally any particular business or trade, or whether any individual or any particular organization may relate to a business idea, which may possibly work. After such thoughts, the organization must move onto the practical scenarios like selecting a particular legal framework, creating and compiling documents, registering itself in the register of the Russian organizations and creating a bank account for business and trade related purposes. In this paper, certain aspects have been discussed in relation to doing business in the nation of Russia. In this paper, the object in relation to exporting firearms and ammunitions to the nation of Russia have been mentioned. This paper have aimed at explaining various facets regarding the starting and continuation of business in relation to firearms and ammunitions, the legal requirements regarding contract and appointment of representative or an agent. To conclude it can be said that the nation of Russia is considered among the most difficult regions in the world, where operating any business is problematic and challenging. The paper have briefly discussed the manners and ways that is mandatory to consider in order to start and continue a business or trade in the nation of Russia. This paper have specifically mentioned that in order to export arms and ammunitions to the nation of Russia from the nation of Australia, one must obtain the permission of the Minister regarding Foreign Affairs as per the Australian Law.

Remedies regarding violation of contract in the nation of Russia

References

Autonomous Sanctions Regulations, 2011.

Besley, T. (2015). Law, regulation, and the business climate: The nature and influence of the World Bank Doing Business project. Journal of Economic Perspectives, 29(3), 99-120.

Criminal Code of Russian Federation.

Epifanova, T. V., Romanenko, N., Mosienko, T., Skvortsova, T., & Kupchinskiy, A. (2015). Modernization of institutional environment of entrepreneurship in Russia for development of innovation initiative in small business structures.

Epifanova, T. V., Romanenko, N., Mosienko, T., Skvortsova, T., & Kupchinskiy, A. (2015). Modernization of institutional environment of entrepreneurship in Russia for development of innovation initiative in small business structures.

Ershova, N. (2017). Investment climate in Russia and challenges for foreign business: The case of Japanese companies. Journal of Eurasian studies, 8(2), 151-160.

Federal Law on Weapons.

Giliker, P. (2016). Studies in the Contract Laws of Asia: Remedies for Breach of Contract, edited by Mindy Chen-Wishart, Alexander Loke and Burton Ong [Oxford University Press, Oxford, 2016, ISBN 978-0-19-875722-1, 536pp,£ 75.00 (h/bk)]. International & Comparative Law Quarterly, 65(4), 969-971.

Graziano, T. K. (2019). Comparative contract law: cases, materials and exercises. Edward Elgar Publishing.

Gurkov, I. (2016). Human resource management in Russian manufacturing subsidiaries of multinational corporations. Post-Communist Economies, 28(3), 353-372.

Kugiel, P. (2017). EU Relations with Australia: Time for a Strategic Partnership.

Kusznir, J. (2016). Doing business in Russia: The main political risks and challenges for international companies. In State Capture, Political Risks and International Business (pp. 115-133). Routledge.

Lyutov, N. L. (2019). STRIKES IN ESSENTIAL SERVICES—THE RUSSIAN FEDERATION. Kutafin University Law Review, 6(1), 150-197.

Maksim, T., Irina, T., & Olga, C. (2015). Transaction Costs under Globalization: The Example of Russian Economy. European Research Studies, 18(2), 107.

Nagurnanova, G. F. (2015). The Moment of Entering into a Contract Under Russian and US Law. Research Journal of Applied Sciences, 10(12), 838-840.

Orlov, V. (2016). Introduction to business law in Russia. Routledge.

Puffer, S., McCarthy, D., May, R., Shirokova, G., & Panibratov, A. (2018). Managing Emerging Markets in Russia. In The Oxford Handbook of Management in Emerging Markets.

Sanford, S. A., & Stratigopoulos, M. D. (2018). Democrats and Republicans Seek Federal Jurisdiction over Cybercrimes by Foreign Actors in DNC v. Russian Federation and Broidy Capital Mgmt. v. State of Qatar. JL & Cyber Warfare, 7, 1.

Savelyev, A. (2017). Contract law 2.0:‘Smart’contracts as the beginning of the end of classic contract law. Information & Communications Technology Law, 26(2), 116-134.

Shashkova, A. V. (2015). Study Manual on the Bases of Russian Law. Cambridge Scholars Publishing.

Shevchenko, I. (2017). The central government of Russia: from Gorbachev to Putin. Routledge.

Sitdikova, L. B., Shilovskaya, A. L., Volkova, M. A., Lenkovskaya, R. R., & Stepanova, N. A. (2016). Legal regulation of the professional liability insurance of a consultant in Russia and abroad. Journal of Advanced Research in Law and Economics, 7(2 (16)), 392.

Smits, J. M. (Ed.). (2017). Contract law: a comparative introduction. Edward Elgar Publishing.

Volkova, M. A., Sitdikova, L. B., Starodumova, S. J., & Shilovskaya, A. L. (2015). Legal problems of the information services implementation in Russian civil law. Review of European Studies, 7(6), 273.

Wagner, D., & Disparte, D. (2016). Transactional Risk Management. In Global Risk Agility and Decision Making (pp. 267-288). Palgrave Macmillan, London.

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