Some users have discovered they can't send sharing invitations when they right click on the calendar or contacts folder in their mailbox and choose Share, Share [folder].
When they try to send the email, they receive an error:
"Folder sharing is not available with the following entries because of permission settings on your network."
Cause and Solution
This happens when the user picks the recipient's name from the autocomplete list. The entry in the autocomplete list contains the SMTP address, not the Exchange x.500 information from the Active Directory, so Outlook thinks it's an outside address and denies it.
Delete the recipient's name when it comes up in the autocomplete list and select it from the Global Address List (GAL) instead.
Sending the sharing invitation from Outlook on the web should also work. If it fails in Outlook on the web, check the sharing settings in the Exchange Admin console.
Sharing the calendar won't automatically give the person you are sharing with the permission to view the calendar. You'll need to give them permission before you share the calendar, especially if the default permission is set to None.
To do this, right click on the Calendar and choose Properties. Click Add, select the person's name and assign permissions.