1.  In respect of existing business-to-business (B2B) agreements that do not contain an explicit price adjustment clause:
    1. a. Is the supplier permitted to unilaterally increase prices (or does it have other rights regarding price increases)? If so, to what extent?
    2. b. Do (extreme) price increases give the customer the right to terminate the agreement? If so, are there any specific rules or regulations to comply with?
  2.  In respect of future B2B agreements:
    1. a. Is it permissible to include an explicit price adjustment clause in the agreement? If so, what price adjustment clauses typically exist in your jurisdiction?
    2. b. What legal issues need to be considered (if any) to ensure that the price adjustment clause is enforceable? Is there any key legislation or case law that parties should be aware of regarding enforceability of price adjustment clauses in your jurisdiction?
    3. c. Are there any other issues that parties should consider when formulating a price adjustment clause (e.g. any sector-specific regulation)?
  3.  Do any additional considerations or rules apply to the inclusion of price adjustment clauses in business-to-consumer (B2C) agreements?

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Oman
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1. In respect of existing business-to-business (B2B) agreements that do not contain an explicit price adjustment clause:

a. Is the supplier permitted to unilaterally increase prices (or does it have other rights regarding price increases)? If so, to what extent?

If an agreement between two businesses does not contain an explicit price adjustment clause, the supplier is not permitted to unilaterally increase prices and they do not have any other rights regarding price increases.  

The price, however, can be increased either by the parties’ agreement or through a court order. With regards to the latter, if there has been a significant change of contractual circumstances the supplier can apply to Omani court to balance the contract on the grounds that, without increasing the price, the contract will not be reasonable anymore. The decision will be at the judge’s total discretion. The extent of the increase will also depend on the circumstantial fact and the judge decision.

b. Do (extreme) price increases give the customer the right to terminate the agreement? If so, are there any specific rules or regulations to comply with?

The customer’s right to terminate the agreement will depend on the contract provisions. If the price increases through a court order, the customer also can file a claim to terminate the contract with the increased price. The decision will be at the judge’s discretion. 

2. In respect of future B2B agreements:

a. Is it permissible to include an explicit price adjustment clause in the agreement? If so, what price adjustment clauses typically exist in your jurisdiction?

Yes, it is permissible to include an explicit price adjustment clause in B2B agreements. The supplier can include a clause stating that the price will be reviewed for instance annually or every six months and the supplier will inform the customer of the new prices. 

An example price adjustment clause is as follows: “The Supplier will review the price on [●] each year and will notify the customer in advance (being not less one (1) calendar months’ notice) in respect of any changes in relation thereto”.  

It is recommended to draft the price adjustment in a clear and reasonable manner. Otherwise, it can be considered as a vague condition which might not be enforceable before Omani courts.  

There is no key legislation and we are not aware of any case law that parties should be aware of regarding enforceability of price adjustment clauses in Oman. 

c. Are there any other issues that parties should consider when formulating a price adjustment clause (e.g. any sector-specific regulation)?

We are not aware of any other issues that parties should consider when formulating a price adjustment clause.  

3. Do any additional considerations or rules apply to the inclusion of price adjustment clauses in business-to-consumer (B2C) agreements?

Yes, B2C agreements in Oman are governed by the Consumer Protection Law issued by Royal Decree No. 66/2014 (the “CPL”) and the Regulation to the Consumer Protection Law issued by Omani Decision No. 77/2017(the “Regulations”). Under the provisions of the CPL the supplier is not allowed to collect a price that is higher than the one announced previously (Article 28). Additionally, Article 19 of the Regulations prohibits the provider from: 

  • increasing the prices upon the discovery of any crises or natural disaster, or exceptional circumstances or special abnormal situation in the market; or  
  • receiving a price (for the commodity) higher than the advertised price