Business Law

1. Gharar can be described as a technical regulation in Saudi that has specific implication when settling disputes. It is forbidden in Islamic law by Qur’an when the operation concerned is risky and could result in deceit of one of the parties (http://www.investopedia.com/terms/g/gharar.asp). In this case, the U.S could claim that the reparation cost of breaching the contract could be classified as Gharar as it is specific to Islamic law: Saudi being an Islamic country with applicable jurisdiction, the US could claim gharar as the cost of breaching the contract was not specified and could be speculated against one party or the other. This principle would not be applicable under the CISG as it does not take into the account the specific laws of individual countries but provides a more universal overview. In this case, the US would have to pay the ful reparation cost that it cause to National Group because of the breach of the contract ( reparation=loss principle) but as Saudi is not a member of CISG, it is impossible to apply.

2. a) One can disagree with Kiffe’s claim of impracticability of the contract as the train wreck is a specific but foreseeable event that companies should assume when signing a legally binding contract and naming prices for their services. Therefore Bende’s claim of a breach stays valid before the court as the fact that Kiffe did not provide for this excuse in the contract implies that they were willing to take any unforeseen risks.

b) When Kiffe made a contract with Bende upon the delivery of shoes in Ghana, it did not include the force majeure clause that would protect itself against the occurrence of such a specified event as transportation failure. This force majeure case would have excused Kiffe for non-performance but since this was not considered and included, one can disagree with Kiffe’s statement that the contract was rendered commercially impracticable. Even though Kiffe might argue that the delivery was impossible