Aware of Joans’ and Pharma Heal’s successful product development, a new country, Brazil, has invited Pharma to do business in their country. Brazil has no insider trading laws. Brazil offered Joan a contract for two years giving her company exclusive rights to product development and sales. Joan accepted and signed this contract. One year later the government administration changed and canceled the contract resulting in huge business losses for Joan. The new government told Joan that they were not bound by anything that the old government did and refused to honor the old contract. Joan asks you for advice on what to do. Keeping in mind all the issues of expropriation, insider trading, and international business, develop a plan for Joan.
American business owners often let profits get in the way of good business common sense. Often, the leadership of foreign governments changes, bringing untold problems to the American business in that particular country. Discuss what these problems could be and how you would handle the situation