1-A is an investor.

2-B is construction Company.

A has contracted with B to construct a factory in Oman. The first payment has been received by B and started working for three months. Oman has adopted new regulation relating the security in the factories. This regulation required new materials and changes in the construction of the factory. All of this has raised the price of the actual contract. A has asked be to include the materials and the do the changes according to the new regulation adopted by the government at the same price and conditions according to the contract signed. B has decided to stop the work and asked to renegotiate the contract and the prices. A has no budget to finance the new materials and the changes in the factory and asked B to continue work and do the changes.

You are B, Please answer the following:

1.Identify A and B according to the law and their responsibility.

2.DoesAhave the right to impose the changes adopted by the government without amending the contract?

3.What do you qualify the action taken byB? And on which conditionsBshould re-start work?

4.Is it permissible forBto claim compensation and remedies if there were no agreement to re-start work?

5.Please in your conclusion, could you explain how could A and B avoided this misunderstanding.