set and tapestry wall covering in the dining room; b) fire place fixtures throughout; c) the sun parlor furniture. I would appreciate you confirming that these items are a part of the transaction, as they would be difficult to replace.”
The Horans did not agree to include those items in the sell, so they refused to sign the contract and returned the check to Ardente. He sued the Horans for specific performance of the contract (order by court requiring the party who created the wrong to perform the obligations she promised in the contract). The trial’s judge held that Ardente’s letter was a counteroffer, so there was no contract. Ardente appealed but his appeal was dismissed.
Contract law is the key in order to have efficient international trade, and its important to consider three important aspects: Effective contract law, Private property rights, and freedom to acquire and protect information.
As we know some of the countries from Eastern Europe have some type of Communist background, decisions about production and the allocation of resources were made primarily by the government.
.
Additionally, information was controlled and there was very little need for business law.
Since the fall of communism, countries of Eastern Europe have had different degrees of success when adapting to a capitalist perspective. To promote local industries, most have worked to create open markets. Production decisions are now made by private citizens who look after their own interests and well being.
Furthermore Governments in the area are also working hard in terms of developing contract law, in order to attract foreign investors, foreign partners play a essential roll as well, providing with economic resources and their knowledge to help local businesses.
Aware that investors will not invest in these countries unless they believe contracts will be properly enforced; most countries have invited legal scholars to teach contract law to local lawyers.
One of the most serious issues that these countries are facing and are working on at the present time is the lack of private property; governmental authorities have had a hard time assigning private property to citizens.
I opted to use the World Bank as a primary source of economic information about Eastern Europe Countries and, in order to narrow down my research process, I chose 2 countries that were recently added to the EU and that are some of the most relevant economically speaking in the area.
The first country I would like to refer to is CZECH REPUBLIC. After joining the EU, this country has accelerated their output growth further. When analyzing some of their macroeconomic variables we can observe an improvement as well. Real GDP growth jumped to 4.1% in Q2-2004 up from 3.1% in 2003. Moreover, The CZECH Government pushes ahead privatization. The government plans to privatize the two remaining large state-owned enterprises by 2006 (telecommunications, electricity conglomerate) will result in a 6% increase on the Country’s GDP in terms of revenues. CZECH REPUBLIC fiscal deficit might be lower than expected in 2004, but it will still be substantially higher than last year as a result of the costs related to subsidies and lending and other expenses associated with partnering with the EU. Another economic variable that has responded positively is inflation. Despite of new wages and new taxation law inflation is considered to be stabilized.
The second Country I used for my research is SLOVENIA. After been added to the EU, SLOVENIA has also experimented a accelerated growth output. The Country’s GDP growth reached 4.6% in Q2-2004, compared to 3.7% in Q1. Additionally, the current account balance remains strong. The deficit in January-July 2004 reached $24 millions, significantly less than the $95millions recorded during the same period last year. The SLOVENIAN government seems to have a good grip on inflation as well.
Further macro-economical variables such as the Country’s budget seem to be promising. According to the World Bank, the budget for 2004-05 appears to be on track. Following a fiscal deficit of 2.0% of GDP in 2003, the authorities expect the budget deficit for this year to come in around 1.5% of GDP.
In conclusion, Eastern Europe countries are combining efforts to bring their economies to a higher standard. Even though some countries in the region still have a long way to come along, the strongest economies are showing positive signs.
