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Legal Aspects of Purchasing

Legal aspects of tendering and outsourcing
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Legal tender
Legal tender or forced tender is payment that, by law, cannot be refused in settlement of a debt denominated in the same currency.

Legal tender is a status which may be conferred on certain examples of money, which may depend on circumstances including the amount of money. The term legal tender does not refer to the money itself.

Legal tender is a concept that is frequently misunderstood: this is often a result of differing legal definitions in different jurisdictions. Cheques, credit cards, debit cards and similar non-cash methods of payment are not generally defined as legal tender. Only specific coin and note examples of cash money are usually defined as legal tender. Some jurisdictions may, by law, forbid or otherwise restrict payment made other than by legal tender. For example, such a law might outlaw the use of foreign coins and bank notes, or require a license to perform financial transactions in a foreign currency.

In some jurisdictions legal tender can be refused as payment if no debt exists prior to the time of payment (for example, where the obligation to pay arises substantially contemporaneously with the offer of payment). Consequently vending machines and transport staff do not have to accept the largest denomination of banknote for a single bus fare or bar of chocolate, and even shopkeepers can reject large banknotes — this is covered by the legal concept known as invitation to treat. However, restaurants that do not collect money until after a meal is served would have to accept that legal tender for payment of the debt incurred in purchasing the meal.

The right, in many jurisdictions, of a trader to refuse to do business with any person means a purchaser cannot demand to make a purchase, and so declaring a legal tender other than for debts would not be effective.

Legal outsourcing

Legal outsourcing refers to the practice of a law firm obtaining legal support services from an outside law firm or legal support services company. When the outsourced entity is based in another country the practice is sometimes called Offshoring.

Legal Outsourcing has gained tremendous ground in the past few years in the United States. Legal Outsourcing companies, primarily from India, have had success by providing services such as document review, legal research and writing, drafting of pleadings and briefs and providing patent services.

In-house law departments of major multinational corporations outsource some of their work in order to save costs. While it will not be prudent to list those firms here for confidential reasons it is expected that as they move to save costs they will outsource more work.
Initially, the Asian subcontinent were targets for different types of outsourcing with the legal field gaining traction. However, in recent years the so called "near shore", "back-door" "specialized legal firms" have sprung up to satisfy law firms and corporations that demand quality and confidentiality.


Most firms and corporations outsource primarily for cost saving measures and this is considered the biggest advantage for legal outsourcing. While an attorney in major legal markets such as the US charge at minimum 250 dollars for work, countries that are offering legal outsourcing charges just a faction. Some countries, especially in the sub continent have gain prominence due to the fact that some of their attorneys with higher degrees work at meager salary. This has attracted major corporations to outsource some of the minor and less sensitive work in their legal departments. Another comparable advantage is the turnaround time since most countries that offers legal outsourcing or either on the other side of the Atlantic and generally with customers from the US.

At face value, it would appear that outsourcing service work to another country is detrimental to the U.S. workforce. This is only at the surface, though. The net effect created is a positive one for the U.S. The creation of jobs in countries such as India leads to the creation of new wealth, and a new class of consumers will have increased purchasing power to buy U.S. goods. Countries like India, to which jobs have been outsourced, make for new markets for the U.S. to export to, and this in turn creates revenue for the U.S..

The outsourcing of service work also lends itself positively to the overall development of a U.S. business. Workers can focus more on specialized areas and precious resources can be freed up to further these. In turn, more specialized and focused businesses have a chance of creating additional jobs for more skilled workers by branching off into areas that require a special skill set. On a more macro level, the overall wealth of a nation like the U.S. can improve if companies are focusing on developing core businesses.

It goes without saying that the LPO trend offers great benefits. India’s legal services are affordable, efficient, and above all, skilled. Outsourcing legal work to India costs up to 80% less than the cost of using the services of American law firms. Because it is far less expensive to hire talent in countries such as India, an outsourcing company is in the enviable position of being able to commit larger teams of talented workers to more specific areas of concentration. An LPO, for instance, can afford the luxury of dedicating an entire team to register trademarks or process immigration visas.

But it isn’t just cost savings that make the LPO an attractive business prospect for U.S. companies and forward-looking law firms. As is the case with the BPO and the KPO, LPO users can avail of a range of benefits, not least saving time on getting important work done. LPO users can gain more operational efficiencies by focusing on core business activities while having access to a breadth of skills, technology and service offerings, at a reduced cost.


Legal aspects of tendering and outsourcing