International construction contracts

When advising on construction and engineering contracts for projects overseas, there are many additional practical and commercial factors that lawyers need to consider and alert their clients to. These factors can be grouped into commercial and political considerations and include the following issues:

Commercial and political considerations

Practical considerations arising from the location of the project include different:

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legal systems
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languages
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cultures
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negotiating practices
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business ethics
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time zones
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communication styles

The sources and types of funding for international projects can vary considerably, depending on the nature of the project and the territory. Funding in emerging markets, where there may be an element of political risk, will be different from that in the developed world where most project financing is fairly similar. Projects may be undertaken in jurisdictions where political, regulatory, currency or enforcement risk is perceived to be higher or less predictable. This can affect lender appetite, pricing, conditions precedent and the overall risk allocation within the project documentation. Political risk insurance, export credit agency support and multilateral development bank involvement may therefore play a more significant role in certain jurisdictions..

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