This happens when you disconnect the Outlook account from the Exchange server and then reconfigure it, but this time with the local PST file instead of the one from server. The Global Address list items will stay cached in the Outlook client and cause this error.
To find the problem, use a file manager or Windows Explorer and navigate to the following path:
Delete the .nk2 files and restart Outlook.
Note: The .nk2 files are hidden system files that you might not find. To show the files in Windows Explorer, go to Tools > Folder Options > select the View tab and select "Show hidden files and folders". Also uncheck "Hide extensions for known file types" and "Hide protected operating system files".