Discussion Board Question:

Even though contract law in the U.S. can be complicated,

this country has a very robust system of contract law,
which means that the rules of contracts are widely known
and courts enforce them to make sure that everyone plays
by those same rules. Not all countries operate this way.
Discuss (pros and cons) two reasons why it might be
difficult to do business in a country where the rules of
contracts are not as closely adhered to as they are in the
U.S., or where different contract rules apply to different
parties, depending on their political influence, wealth, etc.
I believe that the economic stability of a country is dictated by
how well it can adhere to its contract laws, and also related to
how developed a country is economically. Countries such as
Singapore show a high rate of contract enforcement also happen
to be highly developed. This can be shown true, since the
advancement of a countrys institutions is an indication of how
accountable its processes are. Low corruption rates, high
education rates allow room for further processes to take place and
developments to occur. Business investors are ensured that their
finances are secured, and legal malpractice is at its minimum.
However, there is a different scenario in developing countries,
where political influence and wealth cause a distortion in the
default processes. This distortion can be positive or negative:
depends on how dirty the hands of the ruling body are. Countries
like China possess such distortion in political influence, however
also regulate a strict governance of rules, which helps businesses.
This distortion is however negative in most develop ing countries,
like Pakistan since the lack of accountable institutions causes
countries to suffer in untrustworthy hands. This gives businesses
lesser incentive to open up, and harder for reform to take place.