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    Choice of Law and Venue

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    An American corporation contracted to have athletic footwear manufactured by a foreign company overseas. The American company later was horrified to learn that the foreign company used slave labor to manufacture the shoes and refused to honor the contract. Slave labor clearly violates American law but is legal in the foreign country. The contract in question contained an arbitration clause requiring an arbitration panel made up of members from outside the U.S. to meet and decide in a neutral, third-party country, and a choice of law clause designating the law of the foreign company's location. In what forum would the matter be heard, what law applied, and what is the likely outcome if the foreign company claims breach of contract?

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    First, the proposed venue here would not work. It produces an undue hardship on both the company and the manufacturer (the foreign country) because neither is from that country. It also produces a problem since no other country knows the laws of either the foreign country or the U.S. and to make them apply such law would be impracticle. Thus, the venue has to be in either ...