The authors claim the only purpose of cross-cultural negotiations is to product a "contract" or an agreement, which they define as an "exchange of conditional premises in which each party declares it will act in a certain way" only on the condition that the other parties involved agree to live up to their promises (p. 111). As with anything, cultural factors may influence how a contract is used and interpreted. The authors note for example, that in Korea, if one signs a contract in red ink, they can "expect the outcome to come to a bad end" (Hendon, Hendon & Herbig, p. 111). The authors also proclaim there are two primary forms of contract that can result from cross-cultural negotiations. These include an explicit and detailed contract that outlines every contingency contained within a contractual arrangement; a second type of contract is one...

111). It is important for business people to recognize the significance a contract holds when signed; for example, from an American or Western perspective, a contract may represent a binding agreement that summarizes the collaborative negotiations achieved with a second or third party. For others a contract may symbolize an opportunity to create more intimate, personal relationships with members of other countries and cultures. Among the Chinese as noted, a contract symbolizes the start of, rather than the closing, of business negotiations with another party (Hendon, Hendon & Herbig, p. 112) Understanding these differences will…