ABSTRACT
This chapter deals with two primary matters: feasibility studies; and the types of risk a party may be required to consider in negotiating an international contract. In negotiating any international contract the probable risks that might frustrate its performance must be considered. Risks may relate to the country in which the contract would be performed or they may relate to the subject matter of the contract or both. One of the means of determining risks is to develop a feasibility study, which may be prepared by sellers or investors themselves, or by experts who are available to prepare such studies. Risks may be broadly divided into two categories: pre-completion and post-completion risks. It has been explained in the chapter that the incidence of traditional risks in investment in developing countries over the last decade has diminished. The negotiators of international commercial contracts should avoid the risk of expert dependency by making provision for alternative sources of experts and materials.
