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- Title
Let's Shake on it: Perceived Pre-contractual Risk in Cross-border Investment.
- Authors
Fandl, Kevin J.
- Abstract
This article asks whether a legal system that provides protection for commitments made prior to contract formation is more or less conducive to risk-taking by foreign investors than a legal system that does not. I surmise that increased levels of protection for pre-contractual commitments establish an environment more hospitable to new business development, giving potential entrepreneurs added security in their ventures. And I further surmise that different legal traditions provide different levels of protection for these pre-contractual commitments. To better understand the risks faced by cross-border business investors, this article describes the key distinctions between legal systems that create potential liability for an unwitting investor and how they affect pre-contractual liability. It then links these risks with levels of investment by performing a quantitative assessment of the relationship between legal tradition and entrepreneurial activity, followed by a contextual analysis of conversations with cross-jurisdictional legal practitioners. It concludes by showing the distinctions in pre-contractual liability rules between civil and common law legal systems have a significant impact on potential investment.
- Subjects
UNITED States; FOREIGN investment laws; JUSTICE administration; LEGAL status of capitalists &; financiers; LEGAL liability; FOREIGN investments; INVESTORS; CIVIL law; COMMON law
- Publication
University of Miami Business Law Review, 2019, Vol 27, Issue 2, p215
- ISSN
2376-4007
- Publication type
Article