LAW

Project Finance and the Law Summative Essay

Project Finance and the Law Summative Essay

Introduction

The common perception of the legal documents by corporate entities is associated with its rigid nature. The widely accepted definition of legal contracts is that they are designed to protect the organisations from unexpected and unexpected events. They serve as hedge against any new claims made by the opposing party. These contracts are used as evidence in case of litigation and law suits. Sometimes, the rigid clauses in the document stand against the firm itself, whereas, most of the time, they facilitate the legal proceedings and provides a guideline to the firm in terms of legal issues. The policies create a discipline for the firm and its employees, with regards to their operations and working environment. The description mentioned above is the classical view of legal documents, which is perceived and accepted worldwide. However, the current economic scenario has developed a need for a new definition of the legal documents.

The changing environment and increasing market competition have posed numerous challenges to the Legal society to maintain the rigidity of the clauses. Moreover, the increasing trend of long term contracts, strategic alliances and business relationships have made it difficult for both parties to maintain their stance on the original laws in the contract. For example, a company enters into a contract with a new supplier. The legal representative of the company incorporates some hard laws in the contract to protect the company from the risk of default and incompetency of the new supplier in the market. As time passes, the supplier company proves itself capable in terms efficiency and quality work. The company now intends to build and maintain strategic alliance with the company. The rigid conditions of the original contract pose difficulties for the company to proceed in this direction. It is a possibility that either party has been affected negatively by the economic crisis, and need to amend the initial laws of the contract. Such situations have highlighted the need and importance of flexibility in the clauses. The extent of flexibility, their advantages and drawbacks, breach of law, consequences and remedies are another issues in the contemporary society.

The successful alliances and long term contracts with other stake holders requires flexibility in the legal documents. One major challenge in this regard is the conflict of interest between the two parties . One party may take advantage of Flexible laws by transferring the risk on the counter party, rather than sharing it. Therefore, coordination, transparency and integrity are the vital requirements for successful implementation of such programs. Moreover, the coordination and organisation of the business processes is more significant in case of long term cooperation and alliances. These types of projects may also demand systematic and continuous process documentation. In such cases, the probability of agent conflict minimises as the interests of the parties comes in alignment to one another, thereby decreasing the level of contradiction, thus facilitating flexibility. The Partnership contract and strategic alliances are ideal examples that ...