Error on Calendar/Contacts sharing in Outlook

I 've encountered a problem sharing Contacts from within Outlook. We were trying to share a contactgroup where both parties are from the same company, so on the same Office365 license.
However, on trying to send out a share request we stumbled upon following error:

"Problem: Your organization's policy does not allow you to share with this recipient."

At first it seemed that there should be anything wrong with the organizations settings made in office365. But nothing strange was configured there... Setting the permissions to the other mail addres did seem to work. What got me questioning there would be anyhting wrong in the configurational settings.

It turned out there was a difference when trying to share the contact or setting the permission. And after realising this, even sharing the contact worked just fine... without changing any of the configuration settings!

Solution

What turned out to be the problem than?

when the user started typing the recipient name in the "To" box of the "Share invitation" dialog, the recipient was picked up by autocompletion. However, the autocompletion picked up the recipient from the Contacts instead of from the Global Address List. So the name of the recipient appeared as "User Name <user@company.com>", where it had to be "User Name" when you choose from the Global Adress list.

So on sending the email invitation to share the contact list, Microsoft Exchange considered the recipient to be outside the organization. Which resulted in the above error message of course.