Risks Analysis Under Construction And Engineering Contracts*

Article by Mr Saleh Majid (Advocate (Iraq), Rechtsbeistand (Germany) for business laws of Arab countries, B.A.Law (Baghdad), Dip.Air Law, Postgrad Dip.Law (London), M.C.I. Arb.

INTRODUCTION

Statistics show that construction projects are often exposed to risks and hazards, arising either from purely contractual and legal problems or unforeseen circumstances or natural hazards. Often, contractors are faced with unexpected events, which were not calculated in the offer and the programme of works, leaving the contractor with unforeseen costs and losses.

A decision whether to calculate the risks or not in the offer is a matter of policy and market conditions. If the contractor calculates most of the risks and prices them, then most probably, he is out of the race. If he does not calculate and the risk is fatality, it will any way put the contractor out of business. The industry is well advised not to place all the risks on the contractors by drafting extremely