Cheap Off-shore Web Design is Risky Business
Thursday, March 24th, 2011
Telephone conversations can be revealing. A recent discussion came around to an Australian professional consultancy and their choice to contract work out to a perceived cheaper option – a Bulgarian web design firm. It’s a strong business temptation in the hyper-networked world.
But before they went down that route I’d have offered some food for thought.
Some Contracts may resemble Toilet Paper
The first point to clarify is the country the contracts apply to… where they were signed… the jurisdiction of any legal resolution – where you have to appear in court if the contract comes to a dispute.There are three major legal systems and they don’t treat contracts equally – Common Law (the British System), Civil Law (the European System) and Islamic Law. Each individual country also has it’s own business context including political risk and economic profile. And specific countries offer unique challenges to doing business that should be considered.
If the contract is Bulgarian then you might have to hire lawyers and attend hearings on specified dates in Eastern European Civil Courts.
On the other hand, if this is an Australian contract then how do you force the Bulgarian web design firm to appear on a given date in the appropriate court in Sydney? And how do you force them to adhere to the Australian court’s judgement? If you were awarded AUD$20,000 damages then how would you enforce that fine in Bulgaria? Or African or Middle Eastern countries? Or the United States where you might be sued on that contract, have to fly to appear with US lawyers and fight an extended and expensive legal battle with huge monetary consequences if you lose.
Were you to have a legal contract with an Indian firm… any court would take between 10 and 20 years to hear the case due to stress on the Indian legal system. You may never see a resolution.
The bottom line is that a contract you can’t enforce or that has you at such a disadvantage is worse than toilet paper to your business. It might lead to your being sued in a foreign country under a different legal system and possibly in another language.
