Joined: 23 May 2012
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Re: Governments of developing countries occasionally enter into [#permalink]
05 Dec 2013, 22:51
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This answer choice very nicely captures the author’s purpose as revealed to us in lines 28-29
(B) is beyond the scope of the text. What solution? What problem?
(C) The author doesn’t offer any “new explanation;” he simply marshals evidence to rebut an
argument with which he’s not in agreement.
(D), too, is beyond the scope of the text. What “course of action” does the author supposedly
(E) Again, what problem? The author’s just countering an argument; he’s not out to solve any
• Don’t be thrown by choices phrased in abstract language. In global questions, always
look for the choice that’s consistent with the passage’s topic, scope, and purpose,
however it’s phrased.
In ¶s 2 and 3, the author contends that “general principles of law” don’t give governments the
right to alter unilaterally contracts that they’ve entered into.
(A) is beyond the scope of the text. The author isn’t concerned with the “special needs and
interests of developing countries” per se. He’s interested in the legal relationship between
governments and investors in general.
(B) is also beyond the scope of the text. The passage provides no information about when these
principles were first used to settle disputes.
(C) distorts the text. ¶3 makes it clear that American and British law are more akin to each
other than to French law.
(E) The author doesn’t take issue with the “general principles of law” themselves. He simply
argues that what some consider a general principle of law—the concept of administrative
contracts as described in the passage—is not in fact a general principle of law.
In lines 7-11, the author says that an “additional risk” (i.e., a risk on top of “normal economic
risk”) faced by foreign investors that enter into economic development agreements with
governments is that some governments may try to alter unilaterally the agreements’ original
terms to the detriment of foreign investors. That’s why some governments, the author notes in
lines 11-19, have made these agreements “more attractive” to foreign investors by, in effect,
telling investors that they (the governments) won’t try to change unilaterally the terms of
(A) The author never discusses the extent to which either governments or foreign investors
benefit from such agreements.
(B) draws a bogus distinction between the American and British legal systems. Indeed, the text
doesn’t allude to any differences between these legal systems.
(C) The passage doesn’t give any indication that economic development agreements have
become more numerous of late, even though it does say that some governments have recently
tried to make them more appealing to foreign investors.
(E) Since some governments have tried to make economic development agreements more
palatable to foreign investors, chances are that they’ve become more, not less, attractive to
those investors; but there’s no hard info in the passage one way or the other.
In lines 36-39, the author notes that contracts designated by French government agencies as
administrative contracts include “certain items not found in private civil contracts.”
(A) Lines 39-44 reveal that government agencies are only required to pay unanticipated costs
if these costs result from a unilateral change in the contract made by the government.
(B) Au contraire. If anything, administrative contracts generally provide contractors with fewer
guarantees than private civil contracts.
(C) distorts info in ¶2, which says that there are two ways that an administrative contract can
be created in France: (1) by statute or (2) through the initiative of a government agency.
(D) The passage says nothing about foreigners being discouraged from bidding on French
contracts. What the passage does imply is that some foreigners have been concerned about
entering into contracts with governments in developing countries.
Lines 54-56 explicitly state that, under the ordinary law of contracts, governments can
unilaterally change the terms of an agreement only if a provision allowing unilateral change is
incorporated into the original agreement itself.
(A), (B), and (C) ¶3, the only one that discusses the ordinary law of contracts, doesn’t refer to
government “economic risks” (A), “costs” to foreign investors (B), or increased “financial
burden” to investors (C). Moreover, (A) and (C) distort details from the wrong ¶s—¶s 1 and 2,
(D) The passage draws no connection between the ordinary law of contracts and “the general
principles of law recognized by civilized nations” (mentioned in ¶1).
In lines 48-51, the author contends that the concept of administrative contracts is not a “general
principle of law.” He then proceeds to show that contracts in both America and Britain are
governed by the ordinary law of contracts in order to support his point with evidence.
(A) Au contraire. American and British contract law doesn’t allow a government to “reserve
the right to modify unilaterally contracts that [it] enter[s] into....” If the government desires this
right, it must be explicitly written into the terms of the contract itself.
(B) is too broad an assertion. While the author does argue that the concept of administrative
contracts isn’t a “general principle of law,” he doesn’t conclude that there is no general
principle of law that governs contracts between governments and private individuals.
(D) If anything, the author is a critic of the concept of administrative contracts. He certainly
can’t be considered a champion of this notion.
(E) This answer choice is inconsistent with the entire thrust of ¶3, which suggests that, under
the ordinary law of contracts, government contracts are absolutely no different than private
contracts. In fact, answer choice (E) plays on a detail in the entirely wrong paragraph—¶2.
In lines 57-62, the author argues that “termination or modification clauses” in contracts are
proof that government has no inherent right to change unilaterally the terms of a contract to
which it is a party. If such clauses, however, were a mere acknowledgment of an inherent
government right, and had no legal standing of their own, the author’s reasoning would be
(B), (C), (D), and (E) bring up issues that are not relevant to the author’s point about the lack of
an inherent government right to terminate or modify contracts.