Q2. Critically explain reasons why it may become necessary to terminate contracts.

Oman is now diversifying its economy to prepare for life after oil under Tanfeeth
Diversification Plan 2040. Critically analyse legal and Easy of Doing Business issues
that need to be addressed by Oman so that Tanfeeth Diversification Plan can
achieve its objectives and succeed in its diversification thrust, as Oman competes
with other GCC countries for global investments funds, (Hint: please address
Customs clearance turnaround issues, new business formation turnaround issues,
cost of new business formation processing fees, bureaucratic issues, red-tape, the
One Stop Shop Concept of Investment Processing and tax holidays or tax
exemptions)(17 marks)
 Reasons why it may be necessary to terminate contracts (cite)
 Explain Tanfeeth Diversification Plan 2040 (cite)
 Factors for legal and ease of doing business
• Customs clearance turnaround issues
• New business formation turnaround issues
• Cost of new business formation processing fees
• Bureaucratic issues
• Red-tape
• One Stop Shop Concept of Investment Processing
• Tax holidays or tax exemptions
 Explain the current situation in Oman and how these factors must be resolved so that Oman can
achieve its aim of diversification
 Example: In UAE it takes only 7 days to set up a business while in Oman it takes a month
 You will earn more marks if you go beyond the lecture
 Refer to one journal article to answer this question

Question 2 in Assignment 2 can only be answered by interviewing Customs Department of Oman and companies who do
imports and exports about their views on Customs procedure efficiency in Oman, and interviewing Ministry of Industry
and Commerce about their views on efficiency/speed/turnaround of Oman investment procedures versus other GCC
countries and the world at large. You analyse their answers in that interview. You must tell us the person you interviewed
and his/her position or lose marks. This is a very applied assignment. Mr Mansoor (the industrial guru and technocrat)
can help connect you with firms and Ministry where possible, if you need help.

First part of Question 2

http://smallbusiness.chron.com/causes-terminating-legal-contracts-44938.html

Causes for Terminating Legal Contracts

by Bri James

Lack of Consideration

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In legal terms, "consideration" refers to something of value given by both parties to a contract that induces them to enter into the
agreement. Consideration must have an objectively determined value. Thus, a promise of love or affection is not enforceable
because its value is subjective. If there has been no consideration, or bargained-for exchange, a court will deem the contract
invalid and it can be terminated.

Lack of Capacity

A court will not observe the contractual obligations of an individual that lacks capacity. Examples include persons who are
under 18 or are mentally incompetent. While a court will not recognize the contractual obligations of a minor, contractual
obligations made by an adult to a child are enforceable. If a minor does enter into a contract, he or she can affirm the contract
once they are of legal age. A person is considered mentally incompetent if he lacks the ability to understand the agreement. If
incapacity is temporary, an individual can affirm or disaffirm when she is no longer deemed to be mentally incapacitated.

Statute of Frauds

Certain types of contracts must be written to be enforceable. These include pre-nuptial agreements, service contracts not capable
of being performed within a year, land contracts, and contracts for goods of $500 dollars or more. Even though such contracts
must be written, a court has discretion to determine whether "informal writings," such as invoices or letters, meet the Statute of
Frauds requirements.

Mutual Mistake

If both parties entering into a contract are mistaken about the facts relating to a contract, the contract might be voidable. This is
true if the mistake concerns a central element of the contract, and the mistake has material effects on the contract terms.

Misrepresentation

A misrepresentation is a false assertion of fact that induces someone to sign the contract. There is no intent of wrongdoing
required for misrepresentations. Thus, even if the misrepresentation is not fraudulent, the contract is voidable if an innocent
party relied on the information that turned out to be false.

Breach

A breach arises when a party fails to perform any term of a contract absent a legal excuse. A contract cannot be terminated
simply because a party breaches the contract. It depends on whether the breach was major or minor. To determine whether a
breach was major or minor, the courts will look at several factors: the amount of the benefit received by the non-breaching
party; the extent of part, or partial, performance of a contract; and the negligent or willful behavior of the breaching party,
among others. If there is a substantial performance of the contract, then the breach is not material. A material breach permits the
aggrieved party to terminate performance of the contract.

Discharge by Frustration

If there is some supervening act that the parties did not reasonably foresee and the purpose of the contract has been completely
or almost completely destroyed, the contracting parties will be discharged of their obligations. These situations typically mean
the contract is either impossible to perform or no longer serves its commercial purpose
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Inability to Perform

Performance of contractual duties can be excused under an impossibility theory. Types of impossibility theories observed by the
court include acts of God, death, or legal impossibility. If the performance is only partially impossible, it is only discharged to
that extent. Temporary impossibility suspends performance.
Explain Tanfeedh Diversification Plan 2040 (cite)

 http://www.oman.om/wps/portal/index/interact/tanfeedh/!ut/p/a1/hc9Nb4JAEAbg3-KBKzO7UKK9jVrrgobg-
oF7MdisqwZZgyj9-aLxYtLq3N7J8yYzoCAFVWSXncmqnS2y_JZVsIoTFrBhjFF7nnwhTUgmxDhH9BuwbAD-
M4TvlIXsAB1ZzKMulL4HOOBZChIDHs9mnI2Cx7Aw2_EuCPG0XRMyL35IOyMAq_f9x_gxR0hKJPb9f2nJRVrr2
1AlXqjS12657JZb6vqePp00MG6rl1jrcm12MPDv5V2dpTBemzhOMh_RX7j_wyotYVxtkRFA!!/dl5/d5/L0lKQSEvU
Ut3SS80RUkhL2Vu/
 https://www.scp.gov.om/en/Page.aspx?I=15
Tanfeedh is a government initiative that aims mainly at linking the strategies of the main vital sectors of
Manufacturing, Tourism, Transport & Logistics, Mining and Fisheries to each other in order to diversify the
national income resources and fulfill the objectives of the Ninth Five Year Development Plan 2016 – 2020. It
also works towards a sustainable participation between the public and private sectors.
Tanfeedh will be identifying the challenges and opportunities of the government projects and community by
outlining an inclusive roadmap with the participation of the public to ensure better solutions and fulfillment of
KPIs of the government. The main objectives of Tanfeedh are:
 Accelerating the pace of executing economic diversification plans.
 Assist the Government to utilize the best economic and social planning practices, put its budget in projects with good
economic returns and added values.
 Achieve the goals, programs and policies for economic diversification as identified in the Ninth five year Development
plan.
 Provide a clear and sound plan to increase foreign and domestic investment in the Sultanate.
 Enable the Sultanate to upgrade its competitiveness in the various economic and social indicators.
 Support organizations to implement projects and plans based on best practice.
 Enhance execution efficiency and strengthen cooperation and participation between stakeholders.
 Provide clear KPIs and objectives, complemented by an accurate mechanism for monitoring execution.
 Specify no less than 80% of non-government Capital investment to finance the program’s initiatives.
 Increase Oman GDP.

Second part of Question 2

http://www.doingbusiness.org/rankings

Economy Rankings
Economies are ranked on their ease of doing business, from 1–190. A high ease of doing business ranking means the
regulatory environment is more conducive to the starting and operation of a local firm. The rankings are determined by
sorting the aggregate distance to frontier scores on 10 topics, each consisting of several indicators, giving equal weight to
each topic. The rankings for all economies are benchmarked to June 2017. Read the methodology, explaining how
the ease of doing business rankings and the distance to frontier measure are calculated (PDF).

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Compare ease of setting up a business in Oman with other countries using the above information.

You may get some ideas to answer Question 2 from the web page (link) below:

https://photos.state.gov/libraries/oman/231771/PDFs/20160616_oman_country_commercial_guide.pdf

The following information has been collected from this web page:

http://www.doingbusiness.org/~/media/wbg/doingbusiness/documents/profiles/country/omn.pdf

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There are many procedures to be followed for doing business in Oman. The following snapshot has been taken from
the same website. Please visit this web site for more information and ideas to complete Question 2 in Assignment 2.