Let’s Get Known to The Nitty-Gritty of The Legal Framework and Contract Law in The Sultanate of Oman.

Lukshila Akshini | 07 September 2022

THE LEGAL SYSTEM OF THE SULTANATE OF OMAN

With Muscat as its capital, the Sultanate of Oman is a major Islamic monarchy in the Arabian Gulf. It is divided into five areas to be known as the internal, the central, the middle, the eastern, and Al Zahira, as well as four districts namely: Muscat, Musandam, Sohar, and Al Barimi. Sultan (the monarch) Qaboos has been in charge of the Sultanate since it attained independence in July 1970. The National Day of Oman is celebrated annually on the 18th of November to honour the country’s independence from the Portuguese sway and it is declared to be an official holiday in the Sultanate of Oman which is celebrated in grandeur with fireworks, military parades, exhibitions, concerts and colours.

The Sultanate of Oman has two different legislations: primary legislation and secondary legislation. The Royal Decree, issued by the Sultan, is the primary piece of legislation. According to particular authority granted by the Royal Decrees to the relevant executive or ministerial body, secondary legislation is promulgated as a result of Ministerial decisions. The Anglo-Saxon and Islamic legal systems are combined to form Oman’s judicial system. Islam is the official religion of the country, and Islamic Shari’a serves as the legal framework provided in article 2 of the constitution.

WHAT IS A CONTRACT?

A contract is an agreement between two or more private parties that creates legal obligations for both parties. The fundamental components necessary for the contract to be valid are offer and acceptance, adequate consideration, capacity, legality and mutual consent.

LAWS GOVERNING CONTRACTS IN OMAN

The Oman Commercial Code Royal Decree 55/90 (“the code”) and the recently passed Civil Transactions Law, Royal Decree 27/2013, both codify the law that applies to the establishment of contracts (the “Transaction Law”). According to the code, an offer and acceptance alone are sufficient to constitute a contract.

WHAT IS A COMMERCIAL CONTRACT?

A commercial contract is an arrangement made legally between two or more parties to carry out a business transaction. It is governed by certain statutes and common law principles.

WHAT MAKES A CONTRACT NOT VALID?

The contract will not be enforceable if the subject matter is unlawful (Illegal subject matter). Any federal or state law must not be violated by any of the contract’s clauses. The contract is void if it requires one party to disobey the law in order to be formed or to carry it out.

WHAT IS A BREACH OF CONTRACT?

When one party to a legally binding agreement fails to perform in accordance with the terms of the agreement, a breach of contract occurs. Both written and oral contracts are subject to a breach. A breach of contract can be resolved through negotiations between the parties or in court.

The parties may agree on the basic terms of the contract but reserve decisions on the finer points until after, according to Article 79 of the Civil Transactions Law published by Sultani Decree 29/2013 (the “Civil Code”).

The code calls for the precise fulfilment of contractual responsibilities in an effort to strengthen the remedies available for breach of contract (hence not restricting claims to damages). This would be a very important step for Oman’s contract law if the courts there began to enforce non-payment contractual obligations in this way.

TERMINATION OF CONTRACTS

Termination of contracts or dissolution of contracts are covered by the provisions of the Oman Civil Transactions Law, Royal Decree 27/2013 (“The code”).

The act of ending the obligations imposed by a contract is alluded to as termination of a contract. Unless the parties clearly agree that certain duties and obligations will continue to be in force after the termination of the contract, termination has the effect of stopping the obligations of the parties from the time the contract is terminated.

Contracts may often be terminated unilaterally, by consent of the parties, or by court action.