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Contract Law
Although it is not difficult to enter into contracts in Honduras, problems lie in the absence of legal provisions for novel contract types and in inadequate supporting institutions.
Modern contracts, such as leasing, franchising, factoring, and electronic contracts, are not addressed by the current legal framework for contracts. Distribution agreements are unfavorably regulated on behalf of local distributors. Powers of attorney granted in a foreign country, including other Central American countries, are not valid unless they pass through a complicated process of legalizations and permits.
Contract enforcement is complicated, slow, and expensive. The judicial system is ill prepared to deal with international business. Although the Supreme Court was recently appointed through a transparent mechanism, public concerns remain that reforms may meet resistance. Alternative dispute resolution mechanisms for contract enforcement are neither widely present nor widely utilized.
Lawyers, in general, are not well trained in international business principles.
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