Instructions:

Read the case study below, then answer the questions that follow.
In 2015, Karam started making tooled leather belts as a hobby. He used to sell these items to
his friends and relatives. As demand increased, he decided to get into the business of making
and selling belts and other leather goods under the trade name “Cintura”. He decided to open a
business concern which is located in Samer’s premises in a popular area in Beirut. Karam and
Samer concluded a lease contract to period of six years, which includes a condition stating that
Karam can’t transfer the lease contract without the prior consent of Samer.
To start up the business, Karam took a loan of $30,000 from IBL Bank to pay the needed
expenses and to buy leather stock needed for the manufacturing of belts.
In 2016, Karam decided to expand his business operations and sign a contract for four years
with an Italian company Grifatti to be an exclusive distributor for leather equipment and to sell
its products on the Lebanese territories. Although Grifatti’s brand name became popular in the
region as a result of Karam’s efforts, Grifatti later informed Karam that due to the
reorganization of its activities on the Lebanese territories, it has decided to terminate the
exclusivity contract with him.
In 2019, Karam’s business faced difficult conditions due to the cancellation of the exclusivity
contract and the poor economic situation in the country. After several warnings, he failed to
repay the bank’s loan payments. The bank initiated a case on February 2019 in this regard.
To solve his financial problems, Karam convinced Manal, a wealthy business woman, to buy his
business concern. The two parties concluded the sale contract at the notary public on July 26,
2019.
Question number one (25 marks)
Explain if Grifatti has a lawful right to cancel the exclusivity contract with Karam.
Question number two (25 marks)
a. IBL Bank presented a case before the court claiming for the repayment of the loan.
Indicate against whom the case should be presented: Karam or “Cintura”. Justify your
answer.(15 marks)
b. Select the role of each of the following parties (10 marks)
Roles Parties
Karam:
Principal
Samer:
Owner of the Business Concern Landlord
Manal:
Buyer of the Business Concern Sole distributor
Italian Company Grifatti:
Question number three (25 marks)
After concluding the sale contract, Karam refused to abide by the legal procedures in
terms of registering the sale contract at the special commercial register and going into
the publications’ formalities. Explain the consequences of such a decision.
Question number four (25 marks)
Is the lease contract between Samer and Manal valid? Justify your answer.