DOING BUSINESS IN THE USA Gallet Dreyer amp Berkey

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About the Author, Aaron N Wise is a partner of the New York City law firm Gallet Dreyer Berkey LLP Mr. Wise s areas of expertise include corporate commercial and contract law taxation intellectual. property law and other areas dealt with in this guide Mr Wise holds law degrees from Boston. College Law School New York University Law School and the University of Paris France He. is a frequent lecturer inside and outside the USA and is listed in Who s Who in America Who s. Who in American Law and other Who s Who publications Mr Wise is proficient in German. French Italian Spanish Portuguese Russian and Japanese and has a basic working knowledge. of several other languages He also practices in the sports law field both domestically and. internationally He is the author of the multivolume work International Sports Law and. Business Kluwer Law International The Hague and Cambridge Mass 1997 He has been a. speaker at seminars held both outside and inside the USA on subjects involving doing business. in the USA and on sports law and business topics Mr Wise has considerable experience in. representing non US foreign clients their subsidiaries and affiliates in connection with their. U S and international legal and tax matters,Services of Gallet Dreyer Berkey LLP. Gallet Dreyer Berkey LLP GDB based in the heart of New York City offers a full. array of legal and tax services GDB is capable of handling client matters throughout the USA. as well as clients international legal and tax matters Examples of GDB s fields of expertise. direct investments in the USA of all kinds including acquisitions and mergers joint. ventures setting up of companies and manufacturing facilities. contracts of all kinds,commercial law, bank law and regulation bank transactional matters finance law financing transactions and. law and contracts regarding construction and engineering projects. real estate,technology transfer and licensing,industrial and intellectual property. computer law and contracts internet law and contracts. tax law and tax planning,visas and immigration, litigation mediation and arbitration including product liability cases.
trusts and estates probate wills domestic and international. white collar criminal litigation,sports and entertainment law. other areas of U S and international law dealt with in this Guide. TABLE OF CONTENTS, INTRODUCTION The Purpose and Organization of this Guide. Chapter 1 Exporting and Selling to the USA Contracts with American. Distributors and Agents,Chapter 2 Product Liability in the USA. Chapter 3 Creating a U S Subsidiary to Sell or Manufacture. in the USA, Chapter 4 Dealing with Employees Overview of Key Features of. U S Law and Practice,Chapter 5 Joint Ventures in the USA.
Chapter 6 Intellectual Property Licensing Technology Transfer and. Franchising in the USA, Chapter 7 Internet Business An Overview of U S Cyberlaw. Chapter 8 Buying An Existing U S Company or a Part Ownership. Chapter 9 An Overview of U S Taxation, Chapter 10 U S Business Related Visas for Foreign Nationals. Chapter 11 Litigation and Arbitration in the USA,Chapter 12 Errors Frequently Made by Foreigners. ANNEX The Author s Other Cost Free Publications Relating to the. INTRODUCTION,THE PURPOSE AND ORGANIZATION OF THIS GUIDE. The overall purpose of this guide is to provide valuable information and tips to foreign. business persons when they are contemplating planning or actually engaged in. business in the United States of America, how to deal with disputes with American parties meaning.
possible or actual litigation, As a guide it obviously cannot deal in great depth with the subjects nor can it cover every. area encompassed by this broad field It does nevertheless cover many areas It is written. primarily for the non lawyer the business person To the extent possible the author has tried to. make it readable for him or her without overdoing the legalese The reader will hopefully. obtain useful insights on the basics and some of the details on the subjects treated. Caveat The present Guide and the other publications cited herein are not intended as a. substitute for the advice of competent legal or other advisors in connection with any particular. matter or issue and should not be used as a substitute While the writer has made efforts to be. accurate in his factual statements contained in this Guide neither he nor his law firm or anyone. connected with it make any representation or warranty in this regard Opinions interpretations. and predictions expressed herein are the writer s own. EXPORTING AND SELLING TO THE USA CONTRACTS WITH,AMERICAN DISTRIBUTORS AND SALES AGENTS. Your Products and Services Make sure that your products and goods can be lawfully. imported into the USA that all legal requirements of U S customs and import laws are. met that you have all required licenses and permits to import and sell the products and. that your export and import documentation complies with U S law Also stated very. generally there is US legislation relating to particular types of products what they can. and cannot contain their labeling etc Failure to comply can in some instances subject. the manufacturer seller and possibly others to fines and penalties It can also be. ammunition for product liability lawsuits for persons harmed by such infringing products. Here are a few specific examples chosen randomly, The Consumer Product Safety Improvement Act a federal law passed in the summer. of 2009 makes it illegal for anyone to sell children s toys books clothes or jewelry and. certain other goods if the items contain more than trace levels of lead or phthalates. Penalties are stiff with violators facing potential prison terms and fines of up to. US 100 000 per violation The Act applies not only to new items but existing stock as. Recent federal legislation often called for short the Bioterrorism Act applies to. exporters of food and beverage products intended for humans and animals It requires. registration with the U S Food and Drug Administration the appointment of a U S. representative certain document filing with regard to each shipment and certain record. retention by the exporter The consequences for violations can be severe. Certain products destined for the U S market can be tested and certified by a private. industry organization e g Underwriters Laboratories being one for particular types of. products there are others Companies will typically want to obtain certification for. their relevant products for several reasons two being difficulty in marketing them in the. USA without it and to reduce to some degree the company s product liability exposure. Certain services may require special licenses or permits or may be subject to particular. legal requirements, Trademarks Other Intellectual Property If you intend to sell goods or services to the. USA under a particular trademark brand name promotional slogan etc have your U S. lawyer search before you start business whether the use of the mark name slogan etc. might infringe any existing third party trademark If it does not consider applying for. U S trademark protection covering that mark name slogan etc That applies for the. USA and any other Western Hemisphere countries in which you may wish to market your. products or services Essentially the same points apply to other types of intellectual. property you may have and should protect e g patents copyrights and designs though. the search and application procedures for each type and the nature of the rights conferred. are different, Filing Your Copyrighted Works with the U S Copyright Office If you own items.
that are or may be protected by copyright you need to protect them in the USA That is. done principally by filing an application for registration with the U S Copyright. Office Doing that in a proper and timely way is really a must failure to do that can. result in serious problems for the copyright owner See Chapter 6 under the. subheading Intellectual Property in the USA for more on this subject. What Are They and What Do I Want Be sure you understand the differences between. a distributor or dealer and a sales agent or sales rep Decide carefully which you. want for the U S market, How Many Think through carefully whether you want to have one exclusive. distributor dealer sales agent or rep for the U S market or several of them If several. should be the answer should each have exclusivity for a particular part of the USA or. should they all be non exclusive for the entire USA There is no one pattern that will. suit each and every company A good market study may be a worthwhile expense. Due Diligence Check out your prospective U S distributor s dealer s sales. agent s and sales rep s in advance before engaging them There are several areas you. should check These include their legal status financial situation and banking. information references Your U S lawyer can obtain for you at a relatively low cost. valuable information about your prospects Too many non U S companies rush into deals. with U S parties without doing a proper due diligence and the result is often a messy. The Drafting Initiative A Critical Point You the foreign party should take and keep. the initiative in drafting contracts and non binding summaries of key terms NB. SOTs Try your level best not to let your eventual U S contracting party submit the. first or any later contract draft or any NB SOT Insist that the U S side comment on. your NB SOTs and contract drafts rather than submit its own drafts The drafting. initiative is a critical element in arriving at what from your standpoint is a good. contract Remember the distributor dealer sales agent or rep will want a short contract. that places on it few obligations with a long duration and severe restrictions on your right. to terminate no or low minimum targets to meet excellent payment terms no security. for payment and disputes resolved in the U S party s back yard under that U S state s. laws You the supplier will want essentially the opposite and you should insist on it. After all they are your products See below regarding the NB SOT. Importance of First Class Contracts Reducing Risks of Lawsuits The importance to. you the foreign supplier of properly drafted first class contracts for the U S market is. paramount They will help you to attain what you want and to avoid pitfalls potential. claims and lawsuits Also if you do have an actual or potential lawsuit a signed contract. that has been properly drafted protecting your interests will give you certain key. advantages First class U S style contracts are your first line of defense and one of your. primary assault weapons Many lawsuits arise in the USA precisely because of poorly. drafted contracts oral contracts contracts established by letters or memos or de facto. contracts particularly where non U S parties are involved It is better to incur legal fees. to prepare contracts and related documents properly at the outset than to pay the. probably much higher litigation costs plus of course the potential damages and losses. NB SOT Very often it makes good sense to begin formal negotiations not with a. contract draft but with a non binding summary of key terms NB SOT prepared by. your side with the aid of competent counsel Some call it letter of intent There are. important strategic and tactical advantages of commencing with a NB SOT. Partial List of Important Points for Distributorship and Dealership Contract This list. of important points is not meant to be complete nor are the points presented in any. particular order, 1 Contract Products These should be clearly defined If during the course of the. agreement you develop other products should they automatically fall under the contract. 2 Sales Territory Exclusive or Non Exclusive Rights These points must be clearly. articulated in the contract The contract should clearly define what is meant by a sale by the. distributor or dealer within its specified territory Where the territory is large e g all of. USA Canada and Mexico or even all of the Western Hemisphere you may wish to grant. exclusive rights for part of it and non exclusive rights for other parts You may wish to. reserve certain customers in the agreed territory for direct sales by you the foreign supplier. 3 Sales To Only Specified Type of Customers You might wish to confine the. distributor s or dealer s sale of your products to a particular type of customer industry. segment or to customers who will use your products only in a particular way. 4 Can the Distributor or Dealer Appoint Subs and Sales Agents Should the. distributor or dealer have the right to appoint sub distributors or sub dealers and or sales. agents or sales reps If yes can that be done only with your supplier s prior written. consent Should you attach to the distributorship contract a model of such agreements that. the distributor or dealer must use, 5 Sales Outside of Territory or Outside of Permitted Scope Those points should. normally be dealt with in the contract There is for example American case law holding. that if the contract does not clearly prohibit it a distributor or dealer can lawfully sell. outside of its assigned territory, 6 Duration Will the contract be for a fixed term with or without an option to renew. or of indefinite duration Either way there should be termination clauses See point 19. About the Author Aaron N Wise is a partner of the New York City law firm Gallet Dreyer amp Berkey LLP Mr Wise s areas of expertise include corporate commercial and contract law taxation intellectual property law and other areas dealt with in this guide

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