The Use of Foreign Forms to Circumvent Local Liability Rules
Liability assignments for wrongs committed within ajurisdiction are generally intended to apply equally to all local and foreign persons. Local liability policy, however, can be circumvented through the use of foreign legal forms. Both local and foreign persons may reduce their liability exposure by conducting their activities in the local jurisdiction through a foreign form that has been endowed by its jurisdiction of origin with a wider limitation of liability. The differences in liability exposure are often significant. They appear to be tolerated or embraced because they serve local commercial, professional, and governmental interests. Ultimately, the costs of the resultant elevated risk of loss are borne by local residents.
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