This cropped up when try to send to an email recipient where the email address had been a clicked on mailto: link sent by a colleague. At first I thought it was just an issue with one address but when it happened shortly after – I knew it was a bigger issue. Turns out that it may be a corrupt entry in the list of autocomplete entries.
In outlook 2012 to clear the cache of autocomplete entries select file / options / mail and scroll down to the send mail section and press the button marked “Empty Auto-complete list”.
Then try sending the email again by manually entering the email address – do not click on the mailto link.