Memorandum of Advice
International commercial trade deals are a lot more complicated owing to variations in the laws that govern them, with each country having slightly differing legal statutes to address such matters. This memorandum of advice is aimed at discussing some of the laws that govern import of manufacturing equipment from emerging overseas markets, but with a special attention being paid to the risk mitigation factors that managers need to understand before undertaking to source for such components from emerging markets abroad. This is done by the identification of possible risks and laws that could be applied or encountered in such deals, and how these affect consumers. It also offers advice on the possibility of reselling some of the imported manufacturing components locally directly to other manufacturers and what difficulties, if any, are likely to be encountered in the entire process.
The Relevant Laws Relating to Manufacturers Liability
There are a set of laws that govern the transacting of business by two independent organizations as is the case here. The first one, and perhaps one of the most important of them, is the law that deals with contracting and trading. This is the most important because contracts are usually binding and any breach of contract will subject the offending party to the contract to a prosecution for the offense of breach of contract. In essence, breaching a contract will make a manufacturer liable to prosecution in a court of law. Therefore, it is critically important that the company understands that once it signs on the dotted line to enter into the agreement, the contract becomes binding. Unless a contract is legally binding, it is not a contract at all and in the event of non-compliance, there is no liability to the offender. There are several ways in which a contract can be breached, including breach by late performance, breach by poor or substantial performance, breach by total failure to perform, breach by partial performance, and anticipatory breach. A manufacturer ought to understand all kinds of breaches, written or implied, so as to be free from liability.
Another common law is that regarding the products or components that a manufacturer produces, whether they are imported or manufactured locally, as long as they are legally in the ownership of the company in question. It is critical that before the company can import the components, it has to verify that they are safe to handle and that they will not cause undue harm, injury, or damage to the people who handle or use them. A closely related law is that of negligence. The manufacturer will be liable to negligence claims if or when the imported products are poorly handled at any stage of their use or handling once they have been transferred into the manufacturers custody. The components being imported are supposed to be carefully handled so that no-one gets injured or harmed.
Then there is strict liability, a law requiring that the product sold to clients is not defective whatsoever. Strict liability laws are never so much considerate of the role of the manufacturer in the production of the product but rather places all the focus on the product itself. This means that if the imported products are resold, the manufacturer ought to ensure that all the components are in the correct standard because failure to do so will make the importer liable to prosecution for selling defective components even though the importer might not have had a role in the making of the products. The sale of goods legislations can make a manufacturer liable to prosecution by law in the event that the manufacturer fails to deliver the goods in the right form andor quantity. A good example of this is the Goods Act of 1958 which, although an implied law, requires manufacturers to supply goods to customers in the correct quality, quantity, and within the specified time frame.
Any components that the company wants to sell to customers ought to meet the above requirements. Although this is an implied kind of law, it is critical to be cognizant of its consequences because failure to supply goods in the correct form, identity, quantity, and quality will make the company liable to offences. The use of agents to execute any duty on behalf of the company can lead to liability if the agent acts in a manner contrary to the legal requirements. This is because there are certain acts that an agent can do which, if wrong, the company that the agency represents will be held liable. This will depend on whether the agency acts on implied or express authority. If there is express authority, then all liability goes to the principal company.
Both express and implied authority makes the principle liable and responsible for the actions of them agency. In addition, the principle is liable if the agency has apparent authority even if lacking either implied or express authority, or both. Agency is therefore a factor for the firm to consider unless there is going to be a direct importation of the manufacturing components. While selling out the components, the company ought to give all the correct information that the client may require in order to make an informed decision. This is regardless of whether this is being done by an agent or not. Failure to give correct information or to deliberately conceal information will make the company liable and may be prosecuted.
How These ProvisionsLegal Principles Protect Consumers
In all cases where there is exchange of goods andor services between sellers and buyers, there is also the tendency for there to be attempts by one party, usually the seller, to wish to act in a manner that will cause trouble for the buyer. Quite often than not, sellers of products and services usually use different means and techniques to exploit their customers. It was as a result of such and more behavior that certain legislations were formulated and adopted in order to help protect consumers from the exploitative behavior of some sellers. Consumer protection is a priority of any government, federal or state. While not every law is designed to protect the consumers, most of those that are listed above can do this work well enough.
In order to understand how the laws protect consumers, it is important that we understand how they work individually. The laws that regard breach of contract are able to protect the consumer in that by purchasing the commodity, the consumer enters into a contractual term with the seller to do as stated or implied in the agreement between the two parties. In the event of a breach of the contract by the seller, by failing to honor any part of the agreement, the consumer has enough legal grounds to sue the seller. Another law that is in the forefront in consumer protection is the one relating to agencies. Sometimes agents act in a wrong manner and as such the consumer would find it hard to sue them. Instead, depending on the specific case, the principal can be involved, ensuring that the client gets justice.
A law that applies directly to the client here is the sale of goods legislations such as the Goods Act which clearly details how a seller of goods has to behave. This includes giving to the consumers goods in the right forms, quality, and amount as communicated to himher. These laws closely relate to those requiring that the seller reveals to the buyer all the necessary information about the goods being sold so that the seller can decide whether or not to buy. All these laws enhance the power of the consumer by ensuring that heshe is protected by law.
Possible Difficulties When Sourcing Components from Emerging Markets
While sourcing components from emerging markets is usually a good business deal, it is very difficulty to achieve. One hindrance is that emerging markets are usually prone to producing poor quality goods and as such reselling such goods locally would lead to problems. Poor or low quality components would lead to substandard produce from the firm and this will cause a backlash on its products and a loss of revenue. Emerging markets are also poorly equipped to transport goods safely to other countries overseas, and losses are likely to be higher. The reliability of emerging markets is also not good as some of their production is not sustainable, and might lead to shortages in the importing country.
Emerging markets are usually still in the infant stages in their international trading relations and as such they form poor regular suppliers. Although they may perform very well in the short term, long term deliveries might either have to delay or be cancelled altogether owing to fluctuations in production levels. Another problem with sourcing components from emerging markets is that they might not be compatible with the local specifications and this might render their use impossible. It is usually a good practice to match components with market preferences and tastes. This is more often than not an impossible occurrence in the developing world. The high prevalence rate of counterfeit products in emerging markets has been a matter of concern recently. Once emerging markets understand that demand for their products is souring in the foreign, overseas markets, they seek to duplicate products in order to have them appear either as equivalent products or as close substitutes whose pricing is much lower.
Counterfeit products have particularly been reported in emerging markets like China. The risks that are associated with counterfeits are far greater than any potential profits that can come. It is essential, as a risk manager, to ensure that there is a firm assurance that the products supplied will be of the specified quality, quantity and other specification. Finally, the issue of clearance for one to get the legal license to import such components is never an easy one where emerging markets are concerned. Nations like China are still conservative enough and their communist governments are never the best when it comes to clearing foreign operators. As such, there is likely to be unnecessary delays before the components can be delivered.
Conclusion
Commercial law in the country has been applied and reinforced from time immemorial in order to ensure that there are good commercial morals and ethics, especially with regard to relations between sellers and consumers. There are different laws which when overlooked will make a manufacturer liable to criminal prosecutions, depending on the specific breach committed. Laws have also been designed with the aim of protecting consumers of goods and services from the exploitation by the sellers or dealers of the products. As far as sourcing of manufacturing components from emerging markets in the world is concerned, there has to be the exercising of caution before embarking on such deals because there are concerns about safety, health, and time. Sourcing components from emerging markets is also an avenue for the exporters to get rid of their substandard, low, andor poor quality products which are purchased by unsuspecting foreign firms. Such processes are also laden with logistical problems like licensing and clearing the goods from source country to their destination.
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