Frankenstein or Cinderella, Considering Legal Strategies While Building and Adhering Commercial Relations
Diana Maher, Senior Legal Counsel, Kone Corporation, Finland
Joining forces in different ways may bring accelerating benefits for entities operating in different markets. Common forms of cooperation among others contain joint venture, distributorship and research and development arrangements. In all of them, the key for the success is to align the parties’ expectations from the very beginning.
In co-research and development arrangements it is rather common that the parties have had well time to establish the terms and expectations of the planned cooperation. Joint ventures on the other hand can be more complex set ups and include forms of joint ownerships on the full range of business instead of just developing part of it. Joint ventures may end up being like acquisitions and in some situations rushed whereby parties get together after only superficial knowledge of each other’s’ concepts and methods. Distributorship arrangement are on the other hand a less complicated form of cooperation. Since it does not include joint shareholding structure, the exit situation in case of unwanted outcome can be relatively easy.
However, in each of the above cases, the parties need to review and understand comprehensively what their future partners’ expectancies are in respect of the planned cooperation. Once the expectations are properly established and communicated, the actual steps required for the cooperation will be easier to plan and implement – and contract.
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