Lucent Technologies International, Inc. subcontracted with a Saudi Arabian company, National Group, for work that Lucent was
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Lucent Technologies International, Inc. subcontracted with a Saudi Arabian company, National Group, for work that Lucent was doing as part of a $4 billion telecommunications project for the Saudi government. National Group sued Lucent for damages for terminating the contract. The damages included an amount for lost profits. The contract contained no choice of law provision and Saudi law applied. The U.S. court had to decide if recovery of lost profits was prohibited as gharar. After all, gharar prohibits gambling, or the sale of the “calf while still in the womb” or of “fish in the sea.” What is gharar, and how does this Islamic law principle affect calculation of damages for breach of contract under Islamic law? Would this decision have been different under the CISG? National Group for Communications and Computers, Ltd. v. Lucent Technologies International, Inc., 331 F. Supp. 2d 290 (2004).
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A key doctrine within the Sharia is the prohibition upon gharar meaning risk or uncertainty Future a...View the full answer
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