Oman Contract Law Assignment: Torts & Omani Companies

Q1) Mr. Asaad decides to buy a new BMW car as a new model from XYZ Company, the total amount is O.R. 18000 and he pays O.R. 2000 as an advance and the remaining amount is paid by cheques in installments for five years, Mr. Asaad also provides all the required documents and he gets the car.
From the above case answer the following questions with evidences from the law of Contracts.
a. Explain with articles when Asaad can become the owner of the car?
b. By the end of the first year Asaad decides to sell the car to somebody else before paying all the cheques, because of his critical financial position. Discuss the important steps to be followed by Asaad.
c. What will happen if Asaad delays in paying the installments on time?
Q 2) Explain any one of the following Torts:
d. a. Tort of Negligence
e. b. Tort of Nuisance
f. c. Tort of Defamation
g. Give example for any one case which you have chosen.
Q 3): Distinguish between Limited Omani Joint stock Company and General Omani Joint Stock Company; give examples of organizations representing both of them.

Experts Answer on Above Questions on Law

Sale of the BMW car

When does Asaad become the owner?

The specification with respect to the ownership of a movable item is provided under article 375 of the Omani civil transaction law and it implies that the ownership transfer to the buyer once the sale is completed. But with respect to the sales that took place in installment, article 378 provides the seller with the option of retaining ownership until the entire purchase price has been paid, even if the buyer has already received the car.
In the given case scenario, Asaad has received the BMW car, but he will become the owner when the sale is completed, unless his contract specifically mentions a retention of title clause. If any such Clause is included by XYZ, the ownership will remain with XYZ until Asaad pays OMR 18000.

Selling cars before paying all installments

It is important for the Asaad to check all the sale agreements and evaluate whether XYZ retained ownership until full payment as per article 378. In case if the ownership was transferred, Asaad can sell the car, but he will be responsible for the unpaid installments under his original contract. However if the ownership is with XYZ, Asaad cannot sell the car as the ownership is still not transferred to him. It is important that proper communication be made to the proposed buyer about any outstanding contractual restriction over the vehicle.

What happens if there is a delay in the installments

As per article 220, it is important to perform all contractual payment obligations, and if the party refuses, compulsory performance may be sought. In case of delay resulting in loss to XYZ, there is adequate provision for compensation for non performance or delayed performance in article 264. In the given scenario, the failure of Asaad to pay does not simply result in cancellation of his debt. XYZ can pursue the unpaid installment and also adopt a legal approach for the same.

Tort of negligence

Negligence takes place when a person fails to take reasonable care and causes legally recognised harm to another person. As per article 176 of the Omani civil transactions law, the act of negligence would require compensation to be paid to the party suffering harm. In case if the harm is caused indirectly, the liability requires fault/trespass.
For example, a driver while driving his car uses mobile phone and hits another car causing damage. This is the careless approach by the driver, and the insured owner can therefore claim compensation for the loss. As per article 176, the assessment of compensation is done on the basis of actual loss and lost benefit under article 181.

Limited/closed Omani joint stock company vs General/public joint stock company

A closed Omani joint stock company is owned by a limited group of shareholders where as in case of a public joint stock company, shares can be offered to the public and they are traded on the stock market. The minimum capital required in case of a closed Omani joint stock company is OMR500000 whereas it is OMR 2 million for a public Omani joint stock company. The liability of shareholders in a closed Omani joint stock company is limited only to the value of their shares, whereas in case of a public Omani joint stock company, the shareholders are liable for the value of their shares.
The example of a closed Omani joint stock company is Oman Air whereas for a public Omani joint stock company, it is Omantel.

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