Hofstra Law Review
International business transactions are often unavoidably linked to specialized areas of law. Lawyers increase their risk of committing legal malpractice when representing international clients in business transactions because they may find themselves in a precarious position by accepting work they are inexperienced to perform. Moreover, a client may expand into international waters and their lawyer may not be cognizant of the legal consequences. While malpractice may be asserted through negligence, fraud, breach of contract and other failures of standard of care, failure to know the law is no excuse. However, the standard of care depends on whether the defendant acted as a reasonably prudent lawyer would in similar circumstances. Not informing a client of one’s recognized or unrecognized deficiencies may result in laying the foundation of a legal malpractice lawsuit.
Conflicts between domestic and international law play a central role in contract drafting, arbitration, and transactions. Informing a client of the consequences of choosing a particular domestic or international law is critical in preserving a claim of prudent exercise of counsel. A lawyer practicing international business transactions should limit the scope of representation. The exercise in judgment rule may further protect a lawyer allowing them discretion in choices dependent on relevant facts and laws. A lawyer’s duty includes disclosure of material risks and alternative courses of action, therefore the choice of law in contract becomes a relevant fact in evaluating a lawyer’s performance. A client must be equally informed about the risks and alternatives to choices in dispute resolution. Because international business transactions involve large amounts of money, a lawyer must intelligently and prudently approach the consequential issues of the matter and inform her client of the risks and alternatives to protect herself from malpractice liability.
Vincent R. Johnson, Legal Malpractice in International Business Transactions, 44 Hofstra L. Rev. 325 (2015).