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communications report and need an explanation and answer to help me learn. The answers should be in report format 500-700 words Requirements: 500-700w INTELLECTUALPROPERTY& ANTITRUSTLAWS INTRODUCTIONTOINTELLECTUALPROPERTYDescribespropertythatisdevelopedthroughanintellectualandcreativeprocesslikeinventions,writings,trademarksthatareabusiness’smostvaluableasset.?IntellectualPropertyRightsArightthatishadbyapersonorbyacompanytohaveexclusiverightstouseitsownplans,ideas,orotherintangibleassetswithouttheworryofcompetition,atleastforaspecificperiodoftime.Theserightscanincludecopyrights,patents,trademarks,andtradesecrets COPYRIGHT?Alegalrightthatgivestheauthor,composerofqualifyingsubjectmatter,andwhomeetsotherrequirementsestablishedbycopyrightlaw,theexclusiverighttopublish,produce,sell,license,anddistributethework.Workincludeliterary,artistic,musical,films,soundrecordings,broadcasts. COPYRIGHTLAWINSAUDIARABIA?Royal Decree No. M/11, 19 Jumada I 1410 [December 17, 1989]?It is taken care of by Ministry of Culture and Information PROTECTIONOFWORKSUNDERSAUDICOPYRIGHTLAWThis Law shall protect the works created in the fields of literature, art and sciences, irrespective of their type, means of expression, importance or purpose of authorship, such as:?Written materials like books, booklets and others.?Works which are verbally delivered like lectures, speeches, poetry, songs and the like.?Dramatic works, plays, shows and similar presentations which involve motion, sound or both.?Works which are especially prepared for broadcasting or are presented through broadcasting.?Drawings, works of plastic arts, architecture, decorative art and artistic embroidery and the like.?Sound and audio-visual works.?Applied art works, whether handcrafted or manufactured.?Photographic works and the like. PROTECTIONOFWORKSUNDERSAUDICOPYRIGHTLAW?Illustrations, geographical maps, designs, plans, sketches and sculptured works related to geography, topography, architecture and science.?Three dimensional works of geography, topography, architecture or science.?Computer programs.Protection shall include the title of a work, if it is of creative nature, and not a common expression indicating the subject matter of the work. PROTECTIONOFWORKSUNDERSAUDICOPYRIGHTLAWDerivativeworks:Workbasedonapre-existingworkThisLawshallalsoprotect:?Worksoftranslation.?Worksofabridgement[summary],modification,illustration,editingoranyotherformsofalteration.?Encyclopedias[abookorsetofbooksgivinginformationonmanysubjectsoronmanyaspectsofonesubjectandtypicallyarrangedalphabetically]andanthologies[apublishedcollectionofpoemsorotherpiecesofwriting]whicharedeemedcreativewithrespecttotheselectionoftheircontentorarrangement,whethertheyareliterary,artisticorscientificworks.?Compilationsoffolkloricworksandexpressionsandselectionstherefrom,ifsuchcompilationsarecreativeastoselectionorarrangementoftheircontents.?Databases,whethertheyaremechanicallyreadableorcanbereadinanyothermanner,iftheyarecreativeastoselectionorarrangementoftheircontents.?Copyrightprotectionenjoyedbytheauthorsoftheworksmentionedintheaboveparagraphsshallinnowayjeopardizetheprotectionenjoyedbytheauthorsoftheoriginalworks. WORKSEXCLUDEDFROMPROTECTION?ProtectionprescribedbythisLawshallnotcoverthefollowing:?LawsandJudicialjudgments,decisionsofadministrativebodies,internationalagreementsandallofficialdocuments,aswellastheofficialtranslationsthereof,subjecttotheprovisionsconcerningthecirculationofthesedocuments.?Whatispublishedinnewspapers,magazinesandperiodicals,orbroadcastedindailynewsornews-likeevents.?Ideas,procedures,workmethods,conceptsofmathematicalsciences,axiomsandabstractfacts. EXEMPTIONOFCOPYRIGHTEDWORKFROMSAUDICOPYRIGHTLAWThefollowingusesofthecopyrightedwork,initsoriginallanguageorintranslation,arelawfulwithoutobtainingthepermissionofthecopyrightowner.Theseformsofuseare:?Copyingtheworkforpersonaluse,excludingcomputersoftware,audioandaudio-visualworks.?Quotingpassagesfromtheworkinanotherwork,providedthatsuchquotationbeconsistentwiththeconventionalpracticeandwithinthelimitsjustifiedbytheintendedobjective,andprovidedthatthesourceandnameofauthorshallbementionedintheworkwherethequotationiscited.Thisshallalsoapplytojournalisticsummariesabstractedfromnewspapersandperiodicals.?Usingtheworkbywayofclarificationforeducationalpurposes,withinthelimitsjustifiedbytheintendedobjective,ormakingacopyortwoforpubliclibrariesornon-commercialdocumentationcentersonthefollowingconditions:?Shallnotbecommercialorforprofit.?Copyingshallberestrictedtotherequirementsofactivities.?Shallnotimpairthematerialbenefitofthework.?Theworkisoutofprintorislostordamaged. PATENT?Itreferstotherightgrantedtoanyonewhoinventsanynewusefulandnonobviousprocess,machine,articleofmanufactureorcompositionofmatterandisindustriallyapplicable.?Itsanexclusiverightormonopolygrantedbygovernmentofaninventoroverhisinventionforalimitedperiodoftime.?Patentcanbeappliedforaproductoraprocess.?Prioritydate-firsttofile LAWOFPATENTS,LAYOUTDESIGNOFINTEGRATEDCIRCUITS,PLANTVARIETIESANDINDUSTRIALDESIGNINSAUDIARABIA?Invention:Anideadevelopedbytheinventorthatresultsinasolutionofacertainprobleminthefieldoftechnology.?Integratedcircuit:Aproductinitsfinalorintermediateforminwhichtheelements,atleastoneofwhichisactive,andsomeoralloftheinterconnectionsareintegrallyformedinoronapieceofmaterial,andthepurposeofthisistoperformanelectronicfunction.?Layoutdesign:Threedimensionaldispositionoftheelements–atleastoneofwhichisactive-andofsomeoralloftheinterconnectionsofanintegratedcircuit,orsuchathreedimensionaldispositionpreparedforanintegratedcircuitintendedformanufacture.??Plantvariety:Aplantgroupingwithinasinglebotanicaltaxonofthelowestknownrankwhich,irrespectiveofwhethertheconditionsforthegrantofabreedersrightarefullymet,canbedefinedbytheexpressionofthecharacteristicsresultingfromagivengenotypeoracombinationofgenotypesdistinguishedfromanyotherplantgrouping,bytheexpressionofatleastoneofthesaidcharacteristics,andconsideredasunitswithregardtoitssuitabilityforbeingpropagatedwithoutchange. LAWOFPATENTS, LAYOUTDESIGNOFINTEGRATEDCIRCUITS, PLANTVARIETIESANDINDUSTRIALDESIGN?Plantbreeder:Thepersonwhobreeds,discoversordevelopsanewplantvariety.?Industrialdesign:Acompositionoftwo-dimensionallinesorcolors,oranythreedimensionalshapethatgivesanindustrialproduct,oraproductoftraditionalcrafts,aspecialappearanceprovidedthatthisisnotonlyforfunctionalortechnicalpurposeincludingtextiledesigns. SOMEPROVISIONSOFTHELAWTheprotectiondocumentshallnotbegrantedif:?ItscommercialexploitationviolatestheShari'ah.?Theprotectiondocumentshallnotbegrantedifitscommercialexploitationisharmfultolife,tohuman,animalorplanthealth,orissubstantiallyharmfultotheenvironment. SOMEPROVISIONSOFTHELAW(a)Theprotectiondocumentshallbeapersonalrightofthepersoninwhosenameitwasissued.Thisrightmaybetransferredbyinheritance,aswellaswithorwithoutconsideration.(b)Ifthesubjectmatterofprotectionisajointworkofseveralpersons,theyshallbeequallyentitledtotheright,unlesstheyhaveagreedotherwise.(c)Nooneshallbedeemedapartnerunlesshecontributestothesubjectmatterofprotection,andhiseffortsareonlyconfinedtoassistanceinitsexecution.(d)Ifmorethanonepersonhaveindependentlydevelopedthesamesubjectmatterofprotection,theprotectiondocumentshallbegrantedtothefirstapplicant.(e)Thepersonwhodevelopsthesubjectmatterofprotectionshallhavetherighttostatehisnameinthatcapacityintheprotectiondocument. SOMEPROVISIONSOFTHELAW?Thepatentprotectionperiodshallbetwentyyearsfromthedateoffilingtheapplication.?Thelayoutdesigncertificateprotectionperiodshallbetenyearsfromthedateoffilingtheapplicationortenyearsfromthedateofstartofitscommercialexploitationanywhereintheworld.Inanycase,theprotectionperiodmaynotexceedfifteenyearsfromthedateofcreationofthedesign.?Theplantpatentprotectionperiodshallbetwentyyearsfromthedateoffilingtheapplication.However,theprotectionperiodfortreesshallbetwentyfiveyears.?The industrial design certificate protection period shall be ten years from the date of filing the application. TRADEMARK?Anytradename,symbol,word,logo,design,brand,letter,numeral,deviceoranycombinationusedtoidentifyanddistinguishgoodsofamanufacturerorsellerorservicesofaproviderfromthoseofothermanufacturers,sellers,orprovidersanddoesnotincludesoundorsmell. TRADEMARKLAWINSAUDIARABIA?UnderSauditrademarklaw,atrademarkcanbeanythingthattakesadistinctiveshape,suchasnames,words,signatures,letters,symbols,numbers,titles,stamps,drawings,pictures,inscriptions,packaging,figurativeelements,shapesorcolours,groupsofcoloursorcombinationsthereof;oranysignorgroupofsignsusedorintendedtobeusedtodistinguishthegoodsorservicesofoneundertakingfromthoseofothers,orintendedtoidentifyaservice,orusedasacertificationmarkinrespectofgoodsorservices. REGISTRATIONOFTRADEMARKINSAUDIARABIA?InSaudiArabia,trademarkownershipisestablishedbyregistrationwiththeSaudiTrademarkOffice.ItisdifficulttoenforceunregisteredtrademarkrightsinSaudiArabia,unlessthemarkiswellknowninaccordancewiththerequirementsofSaudilaw.?TheMinistryofCommerceandInvestmentcurrentlycontrolstheregistrationprocess.However,followingtherecentestablishmentoftheSaudiAuthorityforIntellectualProperty(SAIP),theadministrationoftrademarkswillbetakenoverbySAIP.?Thetotalofficialfeefromfilingtoregistrationofonetrademarkinoneclassis$2,405.?AtrademarkapplicantinSaudiArabiacanfileforthewholeclass,includingeithertheclassheadingorspecificgoodsorservicesofinterest.Theclassheadingcannotbepartiallyselected.Thegoodsorservicesmustbeselectedfromanonlinesystemandtheapplicantcannotchangethenomenclatureofterms. REGISTRATIONOFTRADEMARKINSAUDIARABIA?InSaudiArabia,ittakesthreetofourmonthsfromfilingtoregistration,unlesstherearefurtherofficeactions,inwhichcaseitmaytakeonemonthmore. APPEALSFORTRADEMARK?AppealagainstrefusalofatrademarkapplicationortheimpositionofconditionsbythetrademarkofficecanbefiledbeforetheAdministrativeTrademarkCommitteewithin60daysofissuance.Appealsarefiledthroughanonlineportal.Nohearingsareconducted.?Iftheappealisrejected,theapplicantcanappealthedecisionoftheAdministrativeTrademarkCommitteetotheAdministrativeCourtwithina60-dayperiod.TheAdministrativeCourtwillissueahearingnoticetobothpartiesandconducthearings.?ThedecisionoftheAdministrativeCourtmaybefurtherappealedbeforetheAdministrativeCourtofAppeal.IftheAdministrativeCourtofAppealremandsthecasetotheAdministrativeCourtwithobservations,theAdministrativeCourtmayreconducthearingsbyissuanceofnoticetobothparties.TheAdministrativeCourtmayeitherreverseormaintainitsearlierjudgment,thisdecisionmayagainbeappealedtotheAdministrativeCourtofAppealbytheaggrievedparty,inwhichcasetheAdministrativeCourtofAppealwilldecidethematter.AfinalappealcanbefiledbeforetheAdministrativeHighCourtonpointsoflawonly. TRADEMARKREGISTRATIONRIGHTS?TheregisteredtrademarkowneracquirestheexclusiverighttousethetrademarkinSaudiArabiaandtherighttoinitiateactionagainstanyunauthoriseduseofanidenticalorconfusinglysimilartrademarkbyanythirdpartywithoutpermission.?UnderSauditrademarklaw,therighttolicenseisrecognisedforregisteredmarksonly.?Registrationaffordsapresumptionoflawfulandtrueownership,unlessprovedtothecontraryinacancellationaction.?Therewillalsobeapresumptionofconfusionamongthepublicintheeventofunauthoriseduseofasimilarmarkbyanythirdparty.?Whenopposingthird-partytrademarksorininfringementactions,theownerofaregisteredmarkneednotprovideanyotherevidenceinrelationtoownershipclaims.?InfringementactionsinSaudiArabia,whetheradministrativeorbeforethecourts,arerecognisedonlyforregisteredtrademarks.?TheregisteredtrademarkownerisentitledtothebenefitsofbordercontrolmeasuresinSaudiArabiaagainsttheimportofcounterfeitgoods. NOTATRADEMARKUNDERSAUDITRADEMARKLAWUnder Saudi trademark law, the following cannot be considered as a trademark or part of a trademark:?amarkwhichisdevoidofdistinctivecharacterorwhichconsistsofrepresentationsthatarecustomarynamesgiventogoodsandservices,orconventionaldrawingsandordinaryimagesofgoods;?expressions,drawingsormarksthatcontravenepublicmoralsorpublicorder;?publicemblems,flags,militaryemblemsandotherinsigniabelongingtoanyoftheGulfCooperationCouncilstates,otherstates,Araborinternationalorganisationsoranyoftheiragencies,oranyimitationthereof;?symbolsoftheRedCrescentorRedCrossandanyothersimilarsymbols,aswellasimitationsthereof;?marksthatareidenticalorsimilartosymbolsofapurelyreligiousnature;?geographicalnames,iftheiruseislikelytocauseconfusionregardingthesourceororiginofthegoodsorservices; NOTATRADEMARKUNDERSAUDITRADEMARKLAW?thename,surname,photographorlogooranotherperson,unlessthatpersonorhisorhersuccessorshavepreviouslyconsentedtoitsuse;?informationrelatingtohonoraryoracademicdegreestowhichtheapplicantforregistrationcannotprovealegalentitlement;?markswhicharelikelytomisleadthepublic,orwhichcontainfalseinformationastotheoriginorsourceofthegoodsorservicesortheircharacteristics,andothermarkswhichcontainafictitious,imitatedorforgedcommercialname;?marksownedbynaturalorlegalpersonswithwhichdealingisbannedpursuanttoadecisionissuedinthisrespectbythecompetentauthority;?marksthatareidenticalorsimilartoamarkpreviouslyfiledorregisteredbyathirdpartyinrespectofthesamegoodsorservices,orsimilargoodsorservicesiftheuseofthelatermarkindicatesaconnectionwiththepreviousowner'sregisteredgoodsorservicesordamageitsinterests;?patented',registered',registereddrawing',copyright'orsimilar. NOTATRADEMARKUNDERSAUDITRADEMARKLAW?marks whose registration for some goods or services may reduce the value of goods or services distinguished by a previous mark;?marks which are a copy, imitation or translation of a third party's famous trademark or part thereof, to be used to distinguish goods or services which are identical or similar to those distinguished by the famous mark; TRADEMARKINFRINGEMENTInfringement means: Unauthorized use of another’s markThe following remedies are available under Saudi trademark law:?interim injunction and precautionary measures. In practice, the Saudi courts rarely grant interim injunctions;?permanent injunction restraining the defendant from further infringement;?court order for the destruction of all infringing goods;?award of damages to the plaintiff. This should be based on:?the profits earned by the defendant;?the value of the goods or services infringed, based on their retail price; or?any other criterion which the court deems fit under the circumstances;?award of adequate compensation other than infringer's profits, in case of deliberate imitation of the established mark; TRADEMARKINFRINGEMENT?courtorderobligingthedefendanttodiscloseinformationaboutallpersonsorentitiesthatcontributedtotheinfringement,througheithertheproductionordistributionofinfringinggoods;and?dependingonthenatureoftheinfringement,financialpenalties.,whichmaybedoubledincaseofrepeatedinfringement. TRADESECRETS?A formula, design, customer list, or other secret that sets a business apart from competitors. TRADESECRETSLAWOFSAUDIARABIA?AcommercialsecretisdefinedundertheTradeSecretsRegulationsasinformationnotknowninitsfinalformorwhereinformationisnotusuallyeasilyobtainablebythoseengagedinthistypeofbusiness,aswellaswheretheinformationisofcommercialvalueduetoitsconfidentiality,andwheretherightfulownertakesreasonablemeasurestomaintainitsconfidentiality.However,theTradeSecretsRegulationsdonotprotectcommercialsecretswhichareinconsistentwithShari'a,publicorderand/orpublicmorals.?Obtaining,usingordisclosinganycommercialsecretinamannerthatisinconsistentwith"honestcommercialpractices"andwithouttheconsentoftherightfulownerisdeemedanabuseofthecommercialsecretundertheTradeSecretsRegulations. LEGALFRAMEWORKOFTRADESECRETSINSAUDIARABIA?TradesecretsaregovernedbytheRegulationsfortheProtectionofConfidentialCommercialInformationissuedbyMinistryofCommerceandIndustryDecisionNo.3218(asamended),passedin2005(TradeSecretsRegulations). DURATIONOFRIGHTS?Aslongasreasonableeffortsaretakenbytheowneroftheinformationtomaintaintheinformationasatradesecret,theTradeSecretsRegulationsdonotexpresslyprovideforalimitonthedurationoftheright?Minimumprotectionperiodoffiveyearsisspecifiedsubjecttolimitedexceptionsinthecontextofsecretinformationsubmittedtoanofficialcompetentauthorityforthepurposeofapprovalofthemarketingofdrugsorchemicalagriculturalproductsinwhichnewchemicalsubstancesareused. REMEDIESFORTRADESECRETINFRINGMENT?RemediesincludeaclaimforcompensationfordamagesforanypersonharmedasaresultofaviolationoftheprovisionsoftheTradeSecretsRegulations. Antitrust Law INTRODUCTIONTOANTITRUSTLAW?A series of laws enacted to:?Limitanti-competitivebehaviorinalmostallindustries,businesses,andprofessionsoperatingintheCountry ANTITRUSTACTIVITIES?MonopolizationofMarket?MergerstocreatetheMonopoly?Price-Fixing-Firmssellingthesameproductagreetofixprices.?ExchangesofInformation-torestrainsthecompetitiveprocess.?TerritorialRestrictions-Occurswhenfirmscompetingatthesamelevelofbusinessreachanagreementtodividethemarkettoeliminatecompetitionamongthosefirms. GOALSOFANTITRUSTLAWS?Preserve small business?More competition is better?Prevent concentration of power?Preserve local control?Promote maximization of consumer welfare ANTITRUSTLEGISLATIONINSAUDIARABIA?The growth of large corporations increased the need for more constraints.?On 21/5/1425 H 9 JULY 2004. Saudi Arabia’s new Competition Law, as enacted by Royal Decree No. M 25. the Law came into force on 19/11/1425 H 31 Dec. 2004. APPLICATIONOFCOMPETITIONLAWINSAUDIARABIANaturalorjuristicpersonundertakingeconomicactivity,includingcommercial,agricultural,industrial,servicebusinessaswellassaleandpurchaseofcommoditiesandservicesinSaudi(theEstablishments).TheCompetitionLawdoesnotapplytopublic(i.e.government)corporationsandfully–ownedstateenterprises. AIMSOFCOMPETITIONLAWINSAUDIARABIAThebroadaimoftheCompetitionLawisto?protectandencouragetheoverallfaircompetition.?monitorandprohibitallcompetitionpracticesthatmightaffectthefaircompetitionandtheSaudiconsumers'rights.?enhancetheSaudicompetitionmarketandregulateallcommercialpracticesintheinvestmentmarket.?protectmediumandsmallbusinessestoensurethecontinuityoftheiroperationsinthemarket.?provideproductsandcommoditieswithsufficientqualityandfairprices PROHIBITEDACTS?EconomicConcentration:"anyactresultinginthewholeorpartialtransferofthetitletotheassets,rights,liabilities,sharesorstocksofanEstablishmenttoanother,orthemergeroftwoormoredepartmentsinonejointdepartment"?DominantPosition:"thepositioninwhichanEstablishmentorgroupofEstablishmentsarecontrollingand/orcapableofaffectingagivenpercentageofthemarketwheretheyarecarryingouttheiractivities"[Normally40%ofthemarket]?CompetitionArrangements:allagreementsand/orcontractsbetweenEstablishments,whetherwrittenorverbal,explicitorimplicit,thataimormightasaconsequencerestrictthetradingorfaircompetitioninthemarket. DISPUTESSETTLEMENTCOMMITTEE?TheCompetitionLawintroducestheformationofaspecialisedcommitteeforthesettlementofthedisputesandenforcementofthepenaltiesundertheCompetitionLaw(theCommittee).TheCommitteewillbecomprisedof(5)memberswithamembershipperiodof(5)years(renewable). PENALTIESANDCOMPENSATIONFinancialfineswillbedeterminedbasedonthenatureofthebreachingactivity.?thecircumstancesandconditionsofthebreach.?significanceofthebreach.?consequencesofthebreach.Financialfinenotexceeding(10%)oftheyearlytotalsaleswhichareunderbreachor(SAR10,000,000)iftheyearlysaleswereinestimable.Financialfinenotexceeding(5%)oftheyearlytotalsaleswhichareunderbreachor(SAR5,000,000).Finenotexceeding(SAR2,000,000)ofanyotherbreachesandwithoutprejudicetotheprovisionsoftherelatedarticlesundertheCompetitionLaw.Ifthebreachingpartyrepeateditsbreach,theCommitteemaydoubletheissuedfinancialfineinrespectofthefirstbreach. Chapter 6 ?Contractlawisthebodyoflawthatrelatestomakingandenforcingagreements.?Acontractisanagreementenforceablebylaw.?Contractlawistheareaoflawthatgovernsmakingcontracts,carryingthemoutandfashioningafairremedywhenthere'sabreach9-2 ?ContractlawinSaudiArabiaisgovernedbytheconservativeHanbalischoolofShariaLaw,whichadoptsafundamentalistandliteralinterpretationoftheQuran.?AnycontractthatisnotspecificallyprohibitedunderSharialawislegallybinding,withnodiscriminationagainstforeignersornon-Muslims.9-3 9-4 ?Acontractofsale(bay’)canbeconcludedfortheexchangeofanythingregardedasacommodityorproperty(mal).However,therearecertainthingsthatarenotincludedasmalunderShariaandthereforecannotbethesubjectofasale.Theseinclude:pigs,alcohol,andanimalsnotrituallyslaughtered.InaccordancetotheQuran,therearetwoexceptionstocontractformation:thetakingofinterest(riba),andtheuseofspeculativecontracts.9-5 ?Atcommonlaw,auctions,advertisements,displaysofgoodsonshelves,tendersandthelikearetreatedasmereinvitationstocreateanoffer.Incontrast,Sharialawrecognisestheseasvalidoffers(Ijab)which,uponbeingaccepted(Qabul),willbecomebindingbylawuponthepartiesinvolvedinthetransaction.?Generally,astatementwiththedescriptionandpriceofgoodsconstitutesanoffer,andadisplayofgoodswiththepricesimilarlyisanofferHowever,advertiserscanspecifythattheadvertisementisonlyaninvitationtotreat.9-6 9-7 ?Bilateralcontract:Acontractenteredintobywayofexchangeofpromisesoftheparties?“Apromiseforapromise”?Unilateralcontract:Acontractinwhichtheofferor’soffercanbeacceptedonlybytheperformanceofanactbytheofferee?A“promiseforanact”9-8 ?Formal contract: A contract that requires a special form or method of creation.?Most common forms of formal contracts are?Negotiable instrument?Letter of credit?Recognizance ?Contract under seal?Informal contract: A contract that is not formal?Valid informal contracts are fully enforceable and may be sued upon if breached9-9 ?Executory contract: A contract that has not been fully performedby either or both sides?Executed contract: A contract that has been fully performedby both sides?A completed contract?Express contract: An agreement that is expressed in written or oral words9-10 ?Implied-in-factcontract:Acontractinwhichagreementbetweenpartieshasbeeninferredfromtheirconduct.?Quasi-contract(implied-in-lawcontract):Anequitabledoctrinewherebyacourtmayawardmonetarydamagestoaplaintiffforprovidingworkorservicestoadefendanteventhoughnoactualcontractexisted?Thedoctrineisintendedtopreventunjustenrichmentandunjustdetriment9-11 Classification Description Valid contractA contract that meets all the essential elements of establishing a contract.Void contractNo contract exists.Voidable contractA contract in which at least one party has the option of voiding the contractUnenforceable contractA contract that cannot be enforced because of a legal defense9-12 •This requires an offer by the offerorand an acceptance of the offer by the offereeAgreement•A promise must be supported by a bargained-for consideration that is legally sufficientConsideration•The parties must have contractual capacity for the contract to be enforceable against themContractual capacity•The object of a contract must be lawfulLawful object9-13•This requires an offer by the offeror and an acceptance of the offer by the offereeAgreement•A promise must be supported by a bargained (thing, money, benefit)-for consideration that is legally sufficientConsideration•The parties must have contractual capacity for the contract to be enforceable against themContractual capacity•The object of a contract must be lawfulLawful object ?The manifestation by two or more persons of the substance of a contract or in simple terms it is an accepted offer.?Requirements of an offer?The offeror must objectively intend to be bound by the offer?The terms of the offer must be definite or reasonably certain?The offer must be communicated to the offeree9-14 9-15Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. ?Astatementofanofferhastobemadeinthepasttense(Sighatul-Madhi)tobeconstitutedasavalidofferinSharialaw.?Oncetheofferhasbeenaccepted,thesellerhasnorighttorevokehisoffer.?Ifhedoesrevokehisoffer,itwillbeconsideredabreachofpromiseonhisbehalf,whichisagreatsininIslamasitencouragesrivalryandmischiefamongthepeople.?Unlikecommonlaw,SaudiArabianlawrequiresacceptancetobemadebeforethepartiesattemptingtocontractphysicallypart.?CertaintermsmustalsobestatedforaSaudiArabiancontracttobeenforceable.Theseinclude:theitemsinvolved,quantity,price,partiesandhowpaymentwillbemade.9-16 ?Revocationofanoffer:Withdrawalofanofferbytheofferorthatterminatestheoffer?Rejectionofanoffer:Expresswordsorconductbytheoffereethatrejectsanoffer?Rejectionterminatestheoffer?Counteroffer:Aresponsebyanoffereethatcontainstermsandconditionsdifferentfromorinadditiontothoseoftheoffer?Acounterofferterminatesthepreviousoffer9-17 ?Lapse of time?A stated time period after which an offer terminates?If no time is stated, an offer terminates after a reasonable time?Termination by operation of law occurs if?The subject matter of the offer is destroyed through no fault of either party?Either the offeror or the offeree dies or becomes incompetent?The object of the offer is made illegal by law9-18 9-19Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. ?Anofferee’sacceptancemustbeunequivocal(leavingnodoubt)?Mirrorimagerule:Arulewhichstatesthatforanacceptancetoexist,theoffereemustacceptthetermsasstatedintheoffer?Acceptance-upon-dispatchrule(mailboxrule)?Arulewhichstatesthatanacceptanceiseffectivewhenitisdispatched,evenifitislostintransmission9-20 ?Something of legal value given in exchange for a promise?Legal value: Support for a contract when either?The promisee suffers a legal detrimentor?The promisor receives a legal benefit?Bargained-for exchange: Exchange that parties engage (thing, money, benefit)in that leads to an enforceable contract9-21 ContractDescriptionIllegal considerationA promise to refrain from doing an illegal act. Such a promise does not support a contract.Illusory promiseA contract into which both parties enter but one or both of the parties can choose not to perform their contractual obligations. Thus, the contract lacks consideration.Preexisting dutySomething a person is already under an obligation to do. A promise lacks consideration if a person promises to perform a preexisting duty.Past considerationA prior act or performance. Past consideration (e.g., prior acts) will not support a new contract. New consideration must be given.9-22 ?The parties must have contractual capacity for the contract to be enforceable against them9-23 ?Adoctrinethatallowsminorstodisaffirm(cancel)mostcontractstheyhaveenteredintowithadults?Theminormustberestoredtothesamepositionheorshewasinbeforetheminorenteredintothecontract9-24Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. ?Adjudged insane: Declared legally insane by a proper court or administrative agency?A contract entered into by a person adjudged insane is void?Insane but not adjudged insane: Being insane but not having been adjudged insane by a court or an administrative agency?A contract entered into by such person is generally voidable?Some states hold that such a contract is void9-25 ?A person who is under contractual incapacity because of ingestion of alcohol or drugsto the point of incompetence?A contract is voidable only if the person was so intoxicated when the contract was entered into that he or she was incapable of understanding or comprehending the nature of the transaction9-26Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. ?Contractscontrarytostatutes?Contractstoperformactivitiesthatareprohibitedbystatuteareillegalcontracts?Illegalcontract:Acontractthathasanillegalobject?Suchcontractsarevoid?Contractcontrarytopublicpolicy:Acontractthathasanegativeimpactonsocietyorthatinterfereswiththepublic’ssafetyandwelfare9-27Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. ?A contract that courts refuse to enforce in part or at all because it is so oppressive or manifestly unfair as to be unjust?Elements of an unconscionable contract?The parties possessed severely unequal bargaining power?The dominant party unreasonably used its unequal bargaining power to obtain oppressive or manifestly unfair contract terms?The adhering party had no reasonable alternative9-28Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. ?ClassicalSharialawrarelydiscussestheideaofcontractualfreedomoutsidethestandardcontracttypes.Instead,itprovidesforsituationwherestandardcontractscanbealteredorcombined.Therearespecificprohibitionsraisedbyotherhadiths,someimportantonesprohibitingaloanandasale,twosalesinone,andasaleofwhatonedoesnothave.?Stipulationsaredividedintothreetypes9-29Condition (ta’liq)conditioning of contract on a future eventConcomitance (iqtiran)varying the terms of the contractExtension (idafa)delaying the beginning of a contract until a future time ?Combinationsofcontractsconditionedoneachotherareopentomanyobjections,becausetheyconfusethepriceoftheindividualcontractsandobstructmetingoutfairremediesforbreach,therebyopeningadoortoribaandgharar.TherearetwomajortypesofcontractsthatareprohibitedinIslamiclaw:contractsinvolvingusury(lendingmoney)oruncertainty.9-30 ?The Quran forbidsribain the strongest terms.Ribais an unjustified enrichment and the principle encompasses a total ban on the charging of interest.?Usurious transactions were classified into three classes:9-31Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.ribaal-fadlunlawful excess in exchange of counter values in a contemporaneous transactionriba al-nasi'aunlawful gain by deferring the completion of exchange of counter valuesribaal-jahilyaexemplified by the lender asking the borrower at maturity date if he will settle the debt or increase it by charging interest ?Ribaal-fadlandribaal-nasi'aapplytotheexchangeoftwopreciousmetals(goldorsilver)andfourcommodities(wheat,barley,datesandsalt),basedontheProphet'stradition.?Promisesforfutureperformancewereforbiddenifgoodscomprisedthesearticlesasthetransactionsweresuspectedtocontainriba.?Theinterpretationofribahascontinuedtoberevisedunderthechangingeconomicsetting.Bytheturnofthecentury,theleadingIslamicscholarsAbduhandRidaheldtheviewthatribaal-Jahilyawasforbiddenbutitcouldbedeemedlawfulunderextremenecessity,andthatribaal-fadlandribaalnasi'aareunderarebuttablepresumptionofprohibition?Thebanagainstinterestrateshasbeencircumventedbybothpartiespretendingthatagreateramountwaslentorthatthedifferencebetweenloananddebtisactuallyacommissionrate9-32 9-33GamblingisanothertypeoftransactioncondemnedintheQuran.Intoxicants,gamesofchance[maysir],[worshipof]idols,and[divinationby]arrowsarebutanabomination,Satan'shandiwork...TheSunnatakesthisprohibitionmuchfurther;itnotonlycondemnsgamblingbutalsosalesofgharar(peril,riskorhazard).TheMessengerofGodforbadethe'saleofthepebble'[hasah,saleofanobjectchosenordeterminedbythethrowingofapebble]andthesaleofgharar.Besidesthis,othertransactionswhichareconditionedonuncertaineventsarealsoprohibited.Lackofknowledgeabouttheexistenceornonexistenceofthesubjectmatter,orconcerningitsquality,quantity,ordateofperformance,washeldtotriggergharar.Theongoingrefinementofthedoctrinehasbeennarroweddowntothepresenceorabsenceofuncertaintyaboutfutureperformanceandnottotheexistenceornon-existenceofthesubjectmatteratthetimeofcontract.Ifthenonexistentarticleorsubjectmatteriscertaintobedeliveredorperformedatafuturedatetheprohibitionofgharardoesnotapply. ?Rescissionisallowedunderspecificcircumstances,suchasthemerchandiseisdefectiveorthequantityincorrect;thequalityofserviceinferior;orwhenunforeseencircumstancespreventthecompletionofthecontract.?InaccordancewithIslamiclaw,remediesforcontractarerestrictedtodirectandactualdamages.Thecourtswillnotrecognizeeconomiclossofchance,interest,potentialprofitsandotherspeculativeawards.?SaudiCourtsalsoprecludeconsequentialdamagesbasedonanticipatedprofits.Courtswouldonlyawardreparationsforimmediatedamages.?Islamiclawfixestherelationshipofcontractingpartiestoanyobjectinvolvedinthecontractastoliabilityforlossordamage.Apartyholdstheobjecteitherasa'trustee'(amin)orasa'guarantor'(damin).Atrusteeisnotliableatallforinjurytotheobject,unlessshowntobeinbreachoftrust.Adamin,however,bearsthesameriskoflossasanowner.IfanobjectisdestroyedthroughanactofGodorforcemajeure,theguarantorhasnorecourse.9-34 9-35