3 Political & Legal Environment

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    In the Name of Allah

    OIL AND GAS LAWBy: Dr S N Ebrahimi

    LLB, LLM, PHDInternational law

    Imam Sadiq [email protected]

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    Overview of the Topics

    3. LEGAL AND CONTRACTUAL ASPECTS OF OIL ANDGAS CONTRACTS

    General Liability

    Contractual v. legal Civil liability v. criminal liability

    Termination Force majeour Applicable law Dispute Settlement

    Others Case study

    Buy-Back Production Sharing

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    The Political and LegalEnvironment

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    Introduction

    1. No single, uniforminternational commerciallaw governing foreign

    business transactionsexists

    2. International marketers

    must comply with thelaws of each countrywithin which it operate

    3. The legal systems ofdifferent countries are sodisparate and complex

    4. Best to get expert legaladvice when doing

    business in anothercountry

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    The Political and Legal Environment

    Learning Objectives:

    Understand the home country political and legal environment

    Understand the host country political and legal environment

    Adapting to different political and legal systems

    International politics and law

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    Home and Host Country Political Environments

    The Uncontrollable

    Sovereignty of nations and nationalism

    Stability of government policy

    Political risks in global business

    Confiscation

    Expropriation

    Domestication

    Embargoes, Boycotts and Sanctions

    Violence

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    Economic and Commercial risks

    Exchange controls

    Import restrictions

    Local-content laws

    Price controls

    Labor problems

    Tax controls

    Commercial risks

    Assessment of potential political risks

    Politically sensitive products

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    Reducing political vulnerability

    Good corporate citizenship

    Managing citizen affairs

    Understand the differences in political ideologies

    Strategies to lessen political risks

    Joint venture

    Expanding the investment base (Local financial partner)Marketing and distribution

    Licensing

    Planned domestication (Greater local participation)

    Use risk reduction through adequate insurance

    Political payoffs (U.S. Foreign corrupt practices act)

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    Strategies to reduce commercial risks

    Joint venture

    Investment base expansion

    Marketing and distribution

    Licensing

    Planned domestication (Greater local participation)

    Other

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    Role of Government in Encouraging Global Trade

    Trade liberalization

    Attract FDI

    Create and promote free trade zones

    Open up the market for foreign products

    Promote transfer of technology

    Tax holidays for FDISpecial incentives for importation of State of the art

    technologies

    Provide market information and incentives for local companies to

    seek foreign markets Host or encourage trade missions

    Promote competitiveness of target industries

    Provide/Invest in necessary business infrastructure

    development

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    Home and Host Country Legal Environment

    Bases for legal systems

    Common law (British/English)

    Code law (Roman law)

    Islamic law

    Socialist law

    Legal dispute situations

    Between governments

    Between companies and governments

    Between companies

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    Determination of legal jurisdiction

    Jurisdictional clauses included in contract

    Location of contract agreement Location of contract performance

    International dispute resolution

    Conciliation of mediationArbitration

    Arbitration centers

    Arbitration clauses

    Enforcement of Arbitration

    Litigation

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    Commercial law within Countries/Regions

    Marketing laws

    Green marketing legislation Antitrust laws

    European Union

    Treaty of Rome

    Articles 85-86 (Private Companies)

    Articles 92, 93, 37 (Government/States)

    Articles 222 and 90 (Public enterprises)

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    The Legal and

    Contractual Framework

    and Terminologies

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    Engineering and finance people should have a proper

    understanding of of legal and contractual aspects of law, e.g:

    International Sale Contracts

    Intellectual Property

    Employment Law

    Construction Contract

    Product Liability

    (Breach, Negligence, Fraud)

    Dispute Resolution

    The Legal and Contractual Framework andTerminologies

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    Contractual and Legal ConsiderationsPreparing Contracts For Services

    Interpreting Contracts once Project is Underway

    Managing To Minimize Personal and Organizational Liability

    Anticipating or Preparing For Expert Witness Testimony

    Being Aware of Local, and International Rules and Regulations

    Being Aware of Additional ResourcesFunding (Domestic and Foreign)

    Being Aware of Pending or Recent Legislations

    The Legal and Contractual Frameworkand Terminologies

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    Breach Violation of right, Duty or Law

    Fraud Intentionally deceitful practice

    Liability Being bound or obligated according to law or

    equity

    Negligence Breaches duty below the appropriate

    standard of care

    Tort Similar to wrong distinguished from a

    crime

    The Legal and ContractualFramework and Terminologies

    Th L l d C t t l

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    The Legal and Contractual

    Framework and Terminologies

    Issues Affecting Ability to Trade andOperate Oil and Gas Offshore Contracts

    differences between legal systems

    question of which laws will apply in disputes rules of competition

    patent registration

    extra-territoriality of overseas legislation product liability

    Th L l d C t t l

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    The Legal and Contractual

    Framework and Terminologies

    General Contract Terms

    Those clauses of a contract which are notnegotiated.

    These clauses, often in fine print, may ormay not be read and may or may not becomprehended or comprehensible.

    Thus courts may, at their discretion, setthem aside if manifest injustice resultsunder a theory of unconscionability.

    Th L l d C t t l

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    The Legal and Contractual

    Framework and Terminologies

    Capacity

    The law presumes that the parties to acontract have the requisite contractualcapacityto enter into the contract.

    Certain persons do not have this capacity:

    Minors

    Insane persons

    Intoxicated persons

    Th L l d C t t l

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    The Legal and Contractual

    Framework and Terminologies

    Freedom of Contract and Legality "Freedom of contract" within limitations prescribed by the law. Breaching these limitations causes the contract to be null and void. Partially void if it concerns only some of the provisions and the void

    provisions are not essential for the contractual relationship.

    Contracts against the law are void. Against mandatory provisions Illegal subject matter Fraud against the law Contracts against public morals limitations to restriction of personal rights Extent of restraints of trade

    Objective impossibility makes a contract void.

    "Freedom of form" but if the law prescribes a specific form, observing it is acondition for validity.

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    The Legal and Contractual Framework and

    Terminologies

    Written Instruments all legal transactions to establish, transfer,

    convert, renew, state, or release a right must beproved by a written instrument.

    Necessary written form Simple written form Official form

    Public notary Land registry official

    Registration Publication

    The Legal and Contractual

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    The Legal and Contractual

    Framework and Terminologies

    Illegality One requirement to have an enforceable contract is that the object

    of the contract must be lawful. Contracts with an illegal object are voidand therefore

    unenforceable.

    There are two key categories of illegality: Contracts contrary to statutes Contracts contrary to public policy

    Since illegal contracts are void, the parties cannot sue fornonperformance.

    The court will generally refuse to enforce or rescind an illegal

    contract. The court will generally leave the parties where it finds them

    The Legal and Contractual

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    The Legal and Contractual

    Framework and Terminologies

    Necessary Legal Implications of International SalesContracts

    Defining key terms (eg. Incoterms 2000 which are the standardtrade definitions most commonly used in international contracts)

    limiting agreement to the contract

    describing the goods contents of the payment clause the retain property until payment clause trade terms (shipping terms, as with Incoterms 2000) force majeure dispute resolution applicable law and jurisdiction fees and charges - including what you are responsible for and what

    your buyer is responsible for

    The Legal and Contractual

    http://www.austrade.gov.au/australia/layout/0,,0_-1_-2_-3_STAG220909-4_-5_-6_-7_EXTERNAL,00.htmlhttp://www.austrade.gov.au/australia/layout/0,,0_-1_-2_-3_STAG220909-4_-5_-6_-7_EXTERNAL,00.html
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    The Legal and Contractual

    Framework and Terminologies

    Force Majeure:

    Force majeure as a concept does exist in thecommon law but is limited to man made

    disasters. In French law however force majeure

    encompasses all unforseeable disasters whetherman made or not.

    Unforseeability is the key element to theexclusion of liability which may arise via forcemajeure.

    The Legal and Contractual

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    The Legal and Contractual

    Framework and Terminologies

    Act of God An unforseeable natural disaster which cannot be

    prevented. Where the injury is uniquely due to an act ofGod it is a defense against liability. Acts of God will nothowever excuse delays in fulfilling contractualcommitments because the duties assumed arenegotiated including the responsibility for lossesresulting from natural disaster. Thus if the duty of theparty is in tort acts of God will excuse their liability. Butif the duty of the person is in contract then the

    contractor must have included a clause covering acts ofGod even though the misfortune was unforseeable andcould not have been prevented. Most insurancecontracts include clauses to exclude liability of theinsuror for acts of God.

    The Legal and Contractual

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    The Legal and Contractual

    Framework and Terminologies

    Act of God A latin maxim applie: Actus Doi nomini facit

    injuriam: An act of God does wrong to no one

    thus no one is responsible in tort for the resultof an inevitable accident.

    Acts of God can be distinguished in the common

    law from force majeure: Acts of god are naturaldisasters whereas force majeure, at least in thecommon law, consists of man made disasters.

    The Legal and Contractual

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    The Legal and Contractual

    Framework and Terminologies

    Organisational Duty The liability of a corporation is the same as that

    of a natural person. However the corporations shareholders unlike

    its board of directors and employees will onlybe liable for the torts of the corporation to theextent of their investment.

    Like any employer a corporation can be held

    liable for torts to its employees which occur atthe workplace according to the vicarious liabilityimposed by the principle of respondeat superior

    The Legal and Contractual

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    The Legal and Contractual

    Framework and Terminologies

    Unconscionability Some lawful contracts are so oppressive or manifestly unfair that

    they are unjust.

    To prevent the enforcement of such contracts, the courts havedeveloped the equitable doctrine ofunconscionability.

    A contract found to be unconscionable under this doctrine is calledan unconscionablecontract, or a contract of adhesion.

    Elements that must be shown to prove that a contract or clause isunconscionable:

    The parties possessed severely unequal bargaining power.

    The dominant party unreasonably used its unequal bargainingpower.

    The adhering party had no reasonable alternative

    The Legal and Contractual

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    The Legal and Contractual

    Framework and Terminologies

    Immunity

    Exemption from legal duties.

    In so far as torts are concerned,immunities may be classified according totheir extent, being absolute or qualified,or their object, being governments orpersons.

    The Legal and Contractual

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    The Legal and Contractual

    Framework and Terminologies

    TYPES OF IMMUNITIES:

    Absolute Immunity

    Absolute immunity is unconditional immunity from all

    personal civil liability, e.g. diplomatic immunity.

    Charitable Immunity

    Immunity from civil liability and particularly as regards

    negligent torts that is granted to a charitable ornonprofit organization such as a hospital.

    The Legal and Contractual

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    The Legal and Contractual

    Framework and Terminologies

    Corporate Immunity

    Immunity from liability in tort granted to anofficer of a corporation who acted in good faithwithin the scope of their duties.

    Discretionary Immunity

    Qualified immunity from civil liability for tortious

    acts or omissions that arise from a governmentemployee's discretionary acts performed as partof their duties

    The Legal and Contractual

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    The Legal and Contractual

    Framework and Terminologies

    Executive Immunity Immunity granted to officers of the executive branch of

    government from personal liability for tortious acts oromissions done pursuant to their duties. E.g. the USpresident's executive immunity is absolute, the immunityof other federal executive officials is qualified.

    Judicial Immunity

    Absolute immunity from liability that is granted to judgesand court officers such as grand juries and prosecutorsand for tortious acts or omissions done within the scopeof their jurisdiction or authority.

    The Legal and Contractual

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    The Legal and Contractual

    Framework and Terminologies

    Legislative Immunity

    Absolute immunity from liability that is granted

    to legislators for tortious acts or omissions donein the course of legislative activities.

    Official Immunity

    Discretionary immunity from personal liabilitythat is granted to public officers for tortious actsand omissions

    The Legal and Contractual

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    The Legal and Contractual

    Framework and Terminologies

    Governmental immunity The principle of the common law is that the king can do

    no wrong that is that there be no remedy against thesovereign because of sovereign immunity unless thesovereign waive that immunity.

    A principle precluding the institution of a suit against thegovernment without its consent.

    Governmental immunity exempts the government fromliability for its torts. It is referred to as eithergovernmental immunity or as soveriegn immunity. Theterms are synonymous.

    The Legal and Contractual

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    The Legal and Contractual

    Framework and Terminologies

    Enterprise liability

    Liability of a business either for the on-the-job injuries of its employees or for thecollective liability of an entire industrialsector where it is clear that that sectorhad produced a defective product but

    where the specific manufacturer cannot beidentified.

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    Monetary Damages

    Monetary damages are the ordinarily presumedremedy in the common law.

    They seek to compensate the injury of theplaintiff via a determination of the cashequivalent of the loss to the defendant, theinterest thereon, and the pain and sufferingsuffered by the defendant.

    They must be distinguished from real restitution.

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    Nominal damages

    An award to a plaintiff of a symbolic sum tofullfil the satisfaction interest of the injured

    plaintiff; Purely symbolic damages awarded toremedy an injury to a plaintiff where nodamages occur.

    The objective of nominal damages is to provideemotional satisfaction to the plaintiff.

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    notice of termination

    A written or verbal notice given by oneParty versus other to end a Contractemployment. Also known as "notice ofdischarge".

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    Possession Possession is the fact of occupation or use of an

    object without regard to the legal right to do so. Thus possession is either rightful or wrongful.

    Rightful possession is one of the rights of property,namely the right of use or usus.

    The right of property consists in the absolute andexclusive control of the object and includes the rightsof usus, use, abusus, abuse, and fructus, fruits, that

    is all that grows thereon. Possession is the right of usus i.e. to enjoy and

    dispose of an object or right.

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    Quasi-Contract

    A quasi-contract is the legal act of aperson, by which he obligates himself

    towards another without any agreementbetween them.

    For example, a physician who treats an

    unconscious patient at the scene of anaccident will have an action in quasi-contract for the cost of her services.

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    Remedies It is a maxim of law that for every wrong there is a remedy. Remedies are those legal aids that may be invoked by plaintiffs to

    cure the injuries done to them by defendants. There are a variety of remedies:

    monetary damages, injunctions, specific performance, and replevin among others such as writs of mandamus and habeas corpus.

    The remedies which most concern tort and contract law are moneydamages, injunction, and specific performance.

    Common law prefers money damages and does not ordinarily awardspecific performance.

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    Civil Liability

    Liability in tort for negligent, reckless, orimputed liability due to strict negligence.

    Liability not on the bases of privatecontract or other promise but because ofsocial relations.

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    Tort

    A tort is a violation of a legal dutyresulting in damages to the plaintiff.

    Delict is a synonymous though rarely usedin English despite the fact that it is theterm for tort both in French (dlit) and in

    German (Delikt).

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    Unjust enrichment Unjust enrichment occurs where a defendant has

    wrongfully profited at plaintiffs expense. There would clearly be a remedy at equity for unjust

    enrichment. Statutes may also fashion legal remedies. The court regards the unjust enrichment as held in

    constructive trust by the defendant. To prove unjust enrichment plaintiff must show a

    deprivation of their property corresponding to anenrichment, that is an augmentation in the plaintiffswealth without however any legal reason for thatenrichment.

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    Warranty

    A promise, whether express or implied,that a good shall be free of defect.

    Thus cases of products liabilities may befounded on a theory of warranty as well,either as an independent or alternative

    theory of liability.

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    Implied warranty.

    A warranty which the law imputes to thecontracting parties based not on the express

    terms of the contract but on the conduct andcircumstances which give rise to implicitassurances of protection and usefulness of theproduct.

    Implied warranties may be a foundational oralternative theory to products liability claims

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    Burden Of Proof The burden of proof is the duty of one party in a lawsuit to prove

    the point which they assert. Ordinarily the movant bears the burden of proof, expressed in the

    maxim "actor incombit probari".

    Different levels of proof are required depending on the type of case. In a civil case the plaintiff must prove the elements of their claim by

    a "preponderance of evidence" i.e. that their assertion is more likelythan not true.

    In a criminal trial the burden of proof required of the prosecutor isto prove the guilt of the accused "beyond a reasonable doubt," amuch more difficult task.

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    Capacity

    Legal capacity is the ability of a person, whether naturalor artificial, to perform civil acts .

    This concept is in fact somewhat confused because the

    notion of legal existence is confounded with the notionof capacity to alienate.

    Legal capacity is divided into two concepts: legalpersonality and legal capacity.

    While all legal persons enjoy rights and bear duties, onlypersons possessing legal capacity can voluntarily acquireor alienate rights and duties.

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    Duress

    Overwhelming force which compels adefendant to act or fail to act to the injuryof another.

    Though that act or omission wouldnormally constitute a tort, here it may not

    if the defendant can prove that theirconduct was justified because of duress.

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    Causation The notion that one event leads to another. Law distinguishes between remote causes which

    while necessary were not sufficient and material

    causes i.e. necessary and sufficient causes. Those causes but for which the accident would

    not have occurred are necessary but not alwayssufficient.

    When a cause is both necessary (legalcausation, i.e. sine qua non causation) andproximate, i.e. sufficient, that is legal causation,then a tort will exist in common law.

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    Defective Product Where a product is defective the products manufacturer

    can be implicated in tort on a theory of strict liability.

    A product is in a defective condition, i.e. is unreasonablydangerous to the user, when it has a propensity ortendency for causing physical harm beyond that whichwould be contemplated by the ordinary user.

    A defective condition is a legal cause of injury if itdirectly produces the injury. A defective condition maybe a legal cause of damage even though it operates incombination with the act of another, or some othernatural cause.

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    Thus, in cases involving defective or unreasonablydangerous products the manufacturer may be liableeven though it exercised all reasonable care in thedesign, manufacture and sale of the product in question.

    Manufacturers are not on always liable for accidentsresulting from misuse of their products.

    The manufacturer is not an insurer. The mere possibility that injury result from the use of a

    product is insufficient to impute liability to amanufacturer.

    Manufacturer is required to make a product free ofdefective and unreasonably dangerous conditions.

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    Due Care / Standard of Care The care that an ordinarily reasonable and

    prudent person would use under the same orsimilar circumstances.

    Proving the failure to exercise due care toward aperson who one has a legal duty resulting in

    injury to that person establishes a prima facietort.

    Due care is one of the standards of care in tort.

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    Fault

    The entire system of negligent torts, withthe exception of strict liability, is

    predicated on the notion of some fault,i.e. the absence of the care of areasonably prudent person.

    Fault can be defined as negligence or thefailure to perform a legal duty.

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    DEFAULT: The failure to fulfill a legalobligation, such as neglecting to pay back a loanon schedule.

    DUTY TO WARN:The legal obligation to warnpeople of a danger. Typically, manufacturers ofhazardous products have a duty to warncustomers of a product's potential dangers andto advise users of any precautions they shouldtake.

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    Negligence

    The failure to meet the duties of socialobligation, general judged by the standard of a

    reasonably prudent person.

    GROSS NEGLIGENCE:

    Failure to use even the slightest amount of carein a way that shows recklessness or willfuldisregard for the safety of others.

    The Legal and Contractual

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    The Legal and ContractualFramework and Terminologies

    Disclaimer / Waiver Ordinarily a tort will imply a remedyfor every right

    there is a remedy. However a plaintiff may have waived their right, either

    expressly or implicitly. Where that waiver was knowing, (i.e. appreciating the

    risks and dangers) intelligent and voluntary (absence ofcoercion) that plaintiff will not be able to recover forthey have accepted the risk and thus the damage.

    To avoid tort liability manufacturers and merchants willoften include disclaimer clauses in their sales contracts.

    However these clauses may or may not be declaredvoid as against public policy.

    The Legal and Contractual

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    e ega a d Co t actuaFramework and Terminologies

    ARBITRATION:A method of alternativedispute resolution in which the disputingparties agree to abide by the decision of

    an arbitrator.

    ASSIGNMENT: The transfer of legal

    rights, such as the time left on a lease,from one person to another.

    The Legal and Contractual

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    gFramework and Terminologies

    GOOD FAITH/BONA FIDE: Honestly and without deception. An agreement

    might be declared invalid if one of the partiesentered with the intention of defrauding the

    other.

    BAD FAITH: Dishonesty or fraud in a transaction, such as

    entering into an agreement with no intention ofever living up to its terms, or knowinglymisrepresenting the quality of something that isbeing bought or sold.

    The Legal and Contractual

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    gFramework and Terminologies

    BANKRUPTCY: Insolvency; a process governedby the company law to help when people cannotor will not pay their debts.

    COMPANY BY-LAWS: A corporation's rulesand regulations. They typically specify thenumber and respective duties of directors and

    officers and govern how the business is run.

    The Legal and Contractual

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    gFramework and Terminologies

    COLLATERAL: An asset that a borrower agreesto give up if he or she fails to repay a loan.

    CONFLICT OF INTEREST: Refers to asituation when someone, such as a lawyer orpublic official, has competing professional orpersonal obligations or personal or financial

    interests that would make it difficult to fulfill hisduties fairly.

    The Legal and Contractual

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    gFramework and Terminologies

    FIDUCIARY DUTY: An obligation to actin the best interest of another party. Forinstance, a corporation's board member

    has a fiduciary duty to the shareholders, atrustee has a fiduciary duty to the trust'sbeneficiaries, and an attorney has a

    fiduciary duty to a client.

    The Legal and Contractual

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    gFramework and Terminologies

    JURISDICTION: A court's authority to rule onthe questions of law at issue in a dispute,typically determined by geographic location and

    type of case.

    LIEN:A claim against someone's property. Alien is instituted in order to secure payment from

    the property owner in the event that theproperty is sold. A mortgage is a common lien.

    The Legal and Contractual

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    gFramework and Terminologies

    LIQUIDATED DAMAGES: The amount ofmoney specified in a contract to be awarded inthe event that the agreement is violated.

    MALPRACTICE:Improper or negligentbehavior by a professional, such as a doctor or alawyer. The failure of a professional to follow

    the accepted standards of practice of his or herprofession.

    The Legal and Contractual

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    gFramework and Terminologies

    Representation

    Entering into a legal transaction in thename of another person.

    Representative

    Principal

    The Legal and Contractual

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    gFramework and Terminologies

    Liability

    Liability is the legal obligation of a personto be held responsable for the injury to

    another whether that injury is contractual(breach of contract) or tortious(negligence, strict liability, intentional

    tort).

    The Legal and Contractual

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    Liability is defined as being bound or obligated according to

    the law.

    Strict Liability - Liability even when there is no proof of negligence. Often

    applicable in product liability cases against manufacturers, who are legallyresponsible for injuries caused by defects in their products, even if they were

    not negligent.

    Many Opportunities to Incur It

    Breach Negligence Fraud

    The Legal and ContractualFramework and Terminologies

    The Legal and Contractual Framework

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    There are two general theories in product liability:

    Negligence

    Strict Liability in Tort

    Strict Liability in Tort:

    Manufacturing defects

    Design defects

    Failure to warn

    The law defines failure to warn as the problem in two situations:

    Foreseeable risks could have been protected by instructions or

    warnings

    The warnings themselves, when followed caused the injuries.

    gand Terminologies

    Th L l d C t t l F k d

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    Liability: Minimizing It

    Insurance: Financial Protection

    Preventive practicesIncorporate Practice

    Limit Practice to Safer Disciplines

    Incorporate High-Risk Services and Areas Separate

    Maintain Currency and Competence

    Use Standard Contract Forms

    Utilize Tested Legal Language

    Develop, Maintain, and Use Written Guidelines

    Document Everything

    Supplement Written Documentation

    Accept Primary Responsibility fir Use of Computer Programs and Models

    The Legal and Contractual Framework andTerminologies

    The Legal and Contractual Framework

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    Liability: Minimizing It

    Preventive practices

    Separate Facts and OpinionsHire Only Insured Sub-Consultants

    Respond In A timely Fashion

    Limit Project Comments to Knowledgeable Persons

    Avoid Financial Interest in Project

    Use Peer Review

    Do It Right The First Time

    Sign Reports In Corporate Name Only

    Communicate With Those You Serve

    Place Liability-Limiting Provision in Contracts

    The Legal and Contractual Frameworkand Terminologies

    The Legal and Contractual Framework and

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    Strict liability is a tort theory of recovery based on the alleged carelessness of the

    defendant's behavior.

    False or True?

    Negligence is the theory of liability based on careless behavior while strict

    liability focuses on liability without fault due to the extreme danger of the

    behavior engaged in (transporting cases of dynamite).

    The primary purpose of tort law is to undo injury to someone through the

    mechanism of compensatory money damages.

    False or True ?

    The goal of this area of law is to try to make an injured party "whole" again byproviding money damages to cover all the costs (pain and suffering, lost salary,

    medical expenses, property damage, etc.) attributable to the injury causing

    behavior of the defendant.

    ApplicationTerminologies

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    BUY-BACK V. PSC

    Main Elements of Irans Buy-

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    yBack

    1) Objective

    Government Sovereignty and Control overNatural Resources

    Access to Foreign Funds

    Keeping its Market Share

    Access to Advanced Technology andKnow-How

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    2) Awarding Procedure

    Tender Requirement

    Approval of High Economic Council

    Awarding Contracts to Foreign Companies

    Local Content Requirement

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    3) Contents Title to Assets Financing Project Inspection, Audit and Verification Contractors Reimbursement Control by the State Local Employment and Training

    Safety, Health and Environment Assignment of Contract Dispute Settlement

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    ii) Key Differences between Buy-Backand PS

    1) Scope of Work

    Development v. Exploration, Developmentand Production

    Exploration and Development v. Exploration,

    Development and Production

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    2) Cost Recovery

    3) Contractors Profit

    Remuneration Fee v. Production Sharing

    4) Contractors Risks versusContractors Incentives

    5) Tax Implications