BUSS 1004: Oman Business Law - Contract Law, Ethics, and Governance

This report provides an in-depth analysis of the legal environment for businesses in the Sultanate of Oman, focusing on contract law, business ethics, corporate social responsibility, and the Tanfeedh diversification plan. It discusses various types of contract breaches under Oman Commercial Law, the duties and obligations outlined in contract law, and the legal and Ease of Doing Business issues that need to be addressed for the success of the Tanfeedh plan. The report also examines the importance of business ethics, corporate social responsibility, and corporate governance in Oman, referencing relevant Oman statutes and examples throughout. It concludes by emphasizing the need for Oman to enhance its business environment to attract foreign investors and achieve its diversification objectives.

BUSINESS LAW

Table of contents
Introduction 3
Discuss all types of breach of contract and the remedies for the breach of contract under
Oman Commercial law. 3
The law of contract outlines duties and obligations of the parties to a contract and
eliminates ambiguity. Critically analyse, vis-à-vis the law of contract provisions. 4
Critically analyse legal and Easy of Doing Business issues that need to be addressed by
Oman so that Tanfeedh Diversification plan 2040 can achieve its objectives and succeed in
its diversification thrust 6
Business ethics, corporate social responsibility and corporate governance 6
The Oman government regulation 7
Reference list 9

Introduction
The legal system of the Sultanate of Oman might seem complex, however it is relatively
comprehensible and rational. The country is recognised as one of the advanced Arab countries
with significant economic stability. The government of Oman prioritizes its business sector,
maintaining ethics, social corporate responsibility and environment. The country competes with
other GCC countries to obtain global investment fund.
The report presents analyse the international and national legal environments of businesses in the
Sultanate of Oman. It strives to elucidate the major features of the judicial system and governing
laws of Oman. The report demonstrates legal information, issues and its analysis. The chief
objective of the report is to present a thorough and in-depth informative and critical analysis of
Oman legal system concerning ethics, environment and corporate responsibility.
Discuss all types of breach of contract and the remedies for the breach of contract under
Oman Commercial law.
As per the viewpoint Al-Kalbani et al. (2017), laws of legal contracts of Oman might be complex
yet it is fairly legible to comprehend. When two or more parties come to an agreement and make
contract, they are required to write the contract, stating its physical evidence. The contract law is
present in the Oman Commercial law. A valid contract is legally binding; it creates a binding
relationship among the involved parties. The contract sets the terms of obligations. A contract
which is well executed and clearly written is considered useful to clearly identify the bargain
acquired by each of the involved parties. The most important fact is, once the contract is written,
agreed with due signature, it is enforceable as valid. However, it should be said that a third party,
project, contract manager or contract holder is responsible to observe the success and completion
of the process. The third person possess the duty of executing the contract. Following the signing
of the contract, the parties are expected to act accordingly. However, one of the most common
reasons which leads one of the parties (or both) to litigation is the failure to understand the
process in which the contract functions (Barnett and Oman, N.B., 2016).
The companies need to make sure that parties involved in the contract. The party accused of
breaching the contract should be penalised, might be detained from participating in business.
Section of the merchant in general, article 26 states that individual who is guilty of breach of

trust would be deprived from conducting business. In other words, the individual or the company
should involve in business and trade. Considering the section of types or commercial sale, article
130 deals with agreement related to sale. The provision states that the third party involved and
aware about the breach of time would have to pay penalty for the breaching of the particular law
(Oman et al. 2016).
In terms of deciding whether or not the involved party is guilty of breaching the law, the court
shall interfere and be the entity to take the final decision. Contract breach also occurs when the
guilty company or individual fails to keep the contract. For example, contract breach due to poor
service, poor performance. Failure to maintain trust of another party also leads to contract
breach. The option of liquidated damage and penalties are present to compensate breach of
contract. Penalty clause is one of the common legal norm concerning contract breach. On the
other aspect, limitation and exclusion clauses are useful for managing and potentially reducing
contract risk (Krawiec and Liu, 2017).
The law of contract outlines duties and obligations of the parties to a contract and
eliminates ambiguity. Critically analyse, vis-à-vis the law of contract provisions.
It is necessary to state that in the country of Oman, contracts hold significant amount of
importance. Contracts are excessively important for individuals and organizations dealing with
government. It is true that the government offers various opportunities to the companies for
growth and development. However, working with government can be equally challenging and
complicated. Conducting government projects generally necessitates various contractors to
ensure delivery of projects on time. Relationship among the different contractors tends to be
complicated. Multiple number of departments are included during the formation of contractual
agreements (Schwenzer et al. 2012). For instance, ministry of communication and transportation
is responsible for making a particular road, however the concerned contract has to pass the tender
board, i.e. the legal affairs ministry and finance minister. The process takes considerable amount
of time. However, possessing clear contract would enable the departments to understand the
purpose and motive of the work. It should be stated that in Oman contracts need to be performed
in careful consideration as it is translated in Arabic and English. The formation process of
contract often leads to complication, especially in the final step if it tends to be incomplete. In
certain situation, the court of Oman tends to assign the presence of a contract even when the

parties have not signed the concerned contract. For instance, an agreement which is not signed
by the employee and the employer would still be considered enforceable and valid from the point
of Oman court (Ali, 2016). The validity of the agreement would be recognised on the basis of
payslip, regular transfer of salary.
In certain standard circumstance, two parties with substantial negotiation without any written
agreement, except in verbal contract, the situation is vague. In this situation, the court is likely to
investigate for any kind of documentation which might exist mentioning the contract.
Considering the commercial code, a contract can be proven in alternative ways other than signed
agreement. The courts of Oman acknowledge the existence of an agreement or contract even
though there is no written evidence of the particular contract. It is relevant to state the court of
Oman possess the ability to recognise the existence of contract on the basis of article 89 as per
the civil code of Egypt (Morrison, 2015). The code of Egypt states that agreement is formed the
moment when parties start to converse about and reaches to an agreement;
In spite of the fact that the Oman government gives great importance on the factor of contracts or
agreements, it certainly takes a modern approach regarding termination issue. Article 167 shows
that “if the contract is binding and valid, neither of the contracting parties may terminate or
amend thereof, save my mutual agreement or litigation” (Charabi and Al-Badi, 2015). The
statement suggests that the contract fails to possess the option of termination, then the parties
need to acquire the permission from the court. However, it should be mentioned that agreement
or contract should always hold termination provision in the content. Considering the opinion of
(Abdul-Wahab et al. 2017), contracts should have provisions of termination to enable the
involved parties to terminate the contract as and when required.
Critically analyse legal and Ease of Doing Business issues that need to be addressed by
Oman so that Tanfeedh Diversification plan 2040 can achieve its objectives and succeed in
its diversification thrust
Tanfeedh is a national programme and initiative that has been launched with an aim of building
the achievements regarding the plans that were made previously by the means of focusing on
some specific sectors.
The targeted sectors that have been identified by the Royal Decree (1/2016) includes the
transport and logistics, tourism, manufacturing, fisheries and the mining industries. This

diversification plan will focus on these specific sectors of the Oman economy to increase the
Gross Domestic Product (GDP) by the means of increasing the investments that are made in
these sectors and thus increasing the job opportunities within the nation (Al-Shaqsi, 2015). Here,
the role of the Tanfeedh is to link the various strategies of the sectors that are selected for the
purpose and with that provide for a platform that can enhance the services to the society by the
means of partnership between the private and the public sectors. For the success of this plan
Oman will have to plan for the long-term strategies that can end up with the enhancement of
every specific chosen sector for this purpose. Here, the two major issues that needs to be
addressed by Oman are:
1. Increase its participation of the prevailing private sector in the areas of funding the large
projects
2. Think and plan regarding the ways that can enhance the business environment and can
bring about the attraction of the investors.
In the overall Ease Of Doing Business Index, Oman was ranked at the 70th position as per The
World Bank - Doing Business Report, 2016. To achieve the targeted mission, the country must
concentrate on improving such rankings so as to attract the foreign investors to invest in the
country. Also the business environment must be given a special emphasis. In order to do that,
Oman may think regarding the privatisation of some of the Government-owned enterprises, with
that they can be listed in the stock market and thus the business environment will also be
enhanced with that. Along with that the country may plan regarding the alignment of the
business environment of the nation and the educational service providers so that the quality of
the training programmes organized are enhanced and improved as per the requirement of the
enhancement of business environment (Prints, 2015). With that to speed up the process, the
youth of the nation can be either trained to seek employment within the private sector or
encouraged to initiate the operations of the small and medium sized enterprises so that they can
effectively add to the entire productivity of the nation and help it in achieving its set target.
Along with that, relaxing the labor laws within the possible limit, planning strategies that can
enhance and create more employment opportunities in the selected sectors can also be a major
step for achieving the targets by Oman.

Business ethics, corporate social responsibility and corporate governance
The term ‘ethics’ refer to moral principles that determine an individual’s behaviour and code of
conduct. Business ethics indicates the code of conduct and moral principles with which an
organisation governs and runs its business. It is important to note that business ethics
concentrates on key principles, truth, integrity and commitment, honesty, law abiding and good
conduct. Conducting business ethics suggests that the company ensures quality, reliability,
confidence and responsibility towards its environment and society in general.
Corporate social responsibility states that the organization possess duty and responsibility
towards society in which it resides and operates. The concept of CSR focuses on community,
environment, marketplace and workplace. It encourages sustainable development of the
organization. The company considers welfare of external community, environment. On the other
aspect, the company ensures safety, security, welfare to employees working under the company.
Employees shows positive and behaviour to work in such company. Instead of solely giving
importance on company growth and profit rate, it tries to create a difference in society (Agarwal,
2017).
The concept of CG or corporate governance refers to a set of processes, principles and systems
which makes effort that an organization is administered in a way which assures best interest for
then involved groups of stakeholders. Taking into account the statement of Prins, (2015),
corporate governance is considered as the system with the help of which a company is managed
and directed. It enables the organization to promote transparency, accountability and corporate
fairness. Effective CG indicates good business.
Oman Gas Company is one of the leading gas and oil company, operates in the international
sphere. The company possess strong sense of business ethics, CSR views. As per the Oman laws
and regulations, the company attempts to maintain consistency in ensuring environmental
protection and social responsibility. It is responsible for community welfare. The company’s
decision directly impacts or influence the environment, safety and security of the entire country.
The company possess a strong framework of corporate governance. It attempts to provide safe
and secure work condition for contractors and employees. It offers assistance for social
development and performs business ensuring integrity. The Oman Gas Company along with
other oil and gas companies have increased job opportunity for employment seekers. In terms of
human resource, the company acknowledges contribution of working groups, hence it takes

initiative to offer training and development programs for enhancing employee skill and ability. It
assists employees to complete higher education for increasing qualification level (Abdallah, A.,
2015). The company strictly abides by environmental laws of the country, takes measures for
reducing level of waste materials produced during production and processing of oil and gas.
The Oman government regulation
Although the high level of pollution have made it really very difficult to sustain a healthy life overcoming
the risks and threats to the human race, yet the Sultanate Of Oman have taken several steps regarding the
various pollutions so as to secure the life of the human beings. The various pollutions and the requisite
government regulations regarding them are discussed below in details:
a) Marine pollution
Royal Decree No. 37/74, the law on marine pollution, 1974e, focuses on marine environment
safety. The chief purpose of the regulation is to reduce and curb the level of water pollutants
discharge by ships, organizations present near sea shore, especially in the pollution free zone of
Oman. Companies doing business in the particular area should make effort not to pollute water
bodies and affect marine environment. As per the law, ships, transport facilitators, companies
should not release any kind of pollutants Oman free zone. The zone is the water belt located
around territorial water area of Oman, it covers and stretches to 38 miles (Abdallah, 2015).
The royal decree asserts that individuals responsible for regulation violation would have to give
penalty of OMR 25,000. This is the maximum penalty amount for a single violation. On the
other aspect, for several violations, the guilty is charged with OMR 4 million. It is worth
mentioning that the person guilty of violating the royal decree despite multiple instances of
charge would be deprived of environmental rights, can be temporary as well as permanent (Al-
Busaidi et al. 2017).
b) Air pollution
Air pollution is responsible for affecting normal health condition, leading to deterioration of
health in the process. Air pollution leads to various diseases which have the potential to create
significant negative impact on an individual. The government of Oman is extremely concerned
with environment protection, resulting the regulation in the process. The ministerial decision no.
118/04 stresses on control of air pollution. The regulation is present in statutory source, and
highlights that corporate owners need to use and implement scientific methods that are stated by

the ministry (Al-Busaidi et al. 2017). The ministry is responsible for prevention of pollutants
discharge, disposal and treatment. The lay stresses that companies need to conduct proper
management of agricultural or organic waste. Before chimney installation, the company should
make effort to follow and conform to the regulation specification described in the legal rule.
c) Noise pollution
The Ministerial Decision No. 79/34 regarding noise pollution control in public places determines
noise level on the basis of categorisation of public places. It indicates external noise source as,
construction sites and industrial plants, commercial operation, airports along with aircrafts for
other purposes. The regulation considers variation of noise level standards during the holidays
and the weekdays. The variations in the noise level are measured as per global standards, and
the temperature, humidity and velocity direction are taken into consideration.
Ministerial Decision No. 80/94 deals with noise pollution in workplace. It stresses on equipment,
devices that creates noise during their installations and operation. Noise pollution of high level
disrupts health condition, affects work concentration, focus and such. Herein lays the importance
of managing noise pollution (Mohsin et al. 2018). So it is very much crucial to check for the
level of noise emission during the installation and the operations of the various gadgets and other
equipments that are used within the workplace.
Conclusion
The report that has been presented can assist the Sultanate of Oman in gathering a significant
economic stability. The implementation of the following strategies that are focused here in this
report can in the long run bring about some huge and major changes within the business
environment of the Sultanate of Oman giving relevant importance to the environment, corporate
responsibility, and ethics.

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