2.5 Application Check

A US distributor demands exclusivity but the draft states only annual sales targets; it does not define territorial scope, audit rights, consequences of missed targets, or a cure period. US counsel confirms applicable law permits the parties to negotiate these safeguards.

Which contractual protections should Meditech require before granting territorial exclusivity?

A proposed US service agreement makes Meditech liable for all downstream losses even when the distributor alters a device contrary to Meditech’s written instructions. The parties can negotiate an allocation of responsibility and the governing legal requirements have been reviewed.

How should Meditech allocate liability arising from distributor modifications?

Meditech needs SAR 4 million of identifiable laboratory equipment in Saudi Arabia. A Saudi bank offers a genuine Murabaha transaction: it will acquire and briefly own the specified equipment, then resell it to Meditech at an agreed cost-plus price payable over 24 months. Independent advisers confirm the proposed sequence meets the applicable financing conditions.

Which financing execution should Meditech authorize for the Saudi laboratory equipment?

The Saudi financing team wants funds for future construction labor, not identifiable goods currently available for bank purchase. It proposes using the same equipment Murabaha documents without identifying any asset. The bank offers to assess another Sharia-compliant financing structure with local counsel.

What financing approach should management evaluate for the construction-labor payments?

Meditech’s Indian joint-venture partner needs calibrated equipment settings to assemble devices, but the complete source files for a separate patented production process are unnecessary for this phase. The agreement allows staged technology access and audit.

What technology-access arrangement should Meditech approve for initial local assembly?

A revised Meditech product contains a highly sensitive manufacturing secret that must never leave Meditech-controlled facilities. A prospective Indian licensee requires unrestricted access to that secret, while a wholly owned operation is financially viable but will enter the market later. No immediate delivery deadline exists.

Which entry mode best satisfies the non-negotiable requirement to protect the manufacturing secret?

An Indian subcontractor is suspected of copying Meditech’s calibration software. Meditech has versioned code, contractual access logs and an applicable confidentiality obligation, but no forensic review has established copying. Management wants an immediate public accusation.

What should Meditech establish before pursuing an intellectual-property infringement claim?

Meditech’s South American factory proposal promises high nominal returns, but the forecast excludes currency devaluation and possible restrictions on outbound dividends. A board decision is due next week; no reliable scenario analysis exists.

What analysis must the board require before authorizing the South American investment?

A South American decree transfers ownership of Meditech’s factory to the state for symbolic compensation. Meditech holds a policy that may cover expropriation, subject to prompt notice and documentation; counsel has not yet established whether investment-treaty arbitration is available.

What immediate sequence best protects Meditech’s rights after the expropriation?

Meditech’s South American subsidiary has earned local profits but a lawful foreign-exchange control currently prohibits most dividend transfers. A proposed headquarters management fee has no underlying service and would only reclassify a dividend. The local factory has an approved productivity upgrade with a positive risk-adjusted business case.

How should Meditech deploy restricted local profits without breaching exchange controls?

Meditech’s South American subsidiary has 12 million local currency units in cash. The verified current rate is 4 local units per US dollar, but exchange-control approval permits only 20% of this balance to be remitted now. Ignore taxes, fees and other restrictions.

What US-dollar amount is presently remittable to headquarters?

Before expanding the South American facility, Meditech learns that a proposed private security contractor has credible unresolved allegations of violence against community protesters. A vetted alternative is available at higher cost. Both can meet the required response time.

How should Meditech select the security provider while addressing human-rights exposure?

Meditech signs a technology license with an Indian partner that specifies audit rights and employee confidentiality training. Six months later the partner has provided neither audit data nor training evidence. The contract requires written notice and a 30-day corrective period before material-breach termination.

How should Meditech enforce the contractual training and audit requirements?

After Meditech’s South American plant opens, the government announces a new technical certification for imported components, effective in 90 days. Compliance engineers say certification is feasible in 60 days, provided testing begins now. The plant can lawfully continue using current inventory until the effective date.

Which transition plan protects production while meeting the new certification requirements?

Meditech’s US contract team, Saudi financing team, India venture team and South American plant each maintain isolated risk files. The board repeatedly approves expansion stages without seeing cross-market obligations or limits on remittable funds. A shared review gate can be introduced without delaying current safety actions.

Which governance adjustment best integrates country risks into expansion approvals?