The Civil Transactions Law, issued by Royal Decree No. (M/191) dated 29/11/1444 AH, is considered one of the most significant legislative achievements made by the Saudi regulator in recent years. This law has addressed many problems and challenges faced by society in general, particularly those related to civil cases and contractual relationships. One of the most notable aspects of the Civil Transactions Law is the clarification of named contracts, which include contracts related to ownership, usufruct, work, partnership, and guarantee contracts. This article will explain each type of these contracts separately:

First: Contracts Related to Ownership

  • Sale Contract: A contract by which the seller transfers ownership of the sold item to the buyer in exchange for a monetary price (Article 307).
  • Barter Contract: A contract involving the exchange of property for property, where neither is money (Article 361).
  • Gift Contract: A contract by which the donor transfers ownership of an item to the donee during the donor’s lifetime without compensation (Article 366).
  • Loan Contract: A contract whereby the lender provides the borrower with fungible goods to be returned in kind (Article 382).
  • Settlement Contract: A contract whereby disputing parties settle an existing or potential dispute by mutually relinquishing claims wholly or partially (Article 391).
  • Competition Contract: A contract where a person commits to rewarding whoever wins a race or contest, with the winning contingent on the participant’s effort (Article 403).

Second: Contracts Related to Usufruct (Benefit)

  • Lease Contract: A contract whereby the lessor permits the lessee to benefit from a non-consumable item for a certain period in return for rent (Article 307).
  • Loan for Use Contract (Gratuitous Use): A contract whereby the lender permits the borrower to use a non-consumable item for a specific period or purpose without compensation, with the obligation to return it (Article 451).

Third: Contracts Related to Work

  • Contracting Contract: A contract whereby the contractor commits to producing something or performing work in exchange for payment, without being an employee or agent of the employer (Article 461).
  • Agency Contract: A contract by which the principal grants the agent authority to act on their behalf legally (Article 480).
  • Deposit Contract: A contract whereby the depositor entrusts their property to the depositary, who must return the same property (Article 506).
  • Custody Contract: A contract whereby the custodian manages, preserves, and returns disputed property and its profits to the rightful owner (Article 517).

Fourth: Partnership Contracts

  • Partnership Contract: A contract where two or more partners contribute money, work, or both to a project to share its profit or loss (Article 529).
  • Mudarabah Contract (Profit Sharing): A contract where the capital provider entrusts money to a working partner in exchange for a shared portion of the profit (Article 550).
  • Output Sharing Contract: A contract where the capital provider entrusts a non-consumable item to a user in exchange for a shared portion of the output (Article 566).
  • Agricultural Partnership Contract: A contract where land or trees are entrusted to a worker for farming or irrigation in exchange for a shared portion of the yield (Article 571).

Fifth: Guarantee Contract

  • Guarantee Contract: A contract whereby the guarantor commits to fulfilling the debtor’s obligation to the creditor if the debtor fails to fulfill it (Article 578).

If you want, I can provide further detailed summaries or explanations for each type of contract or translate additional legal texts for your needs.

References:

Official Saudi legal resources and legislative documents.

Saudi Civil Transactions Law, Royal Decree No. (M/191), 29/11/1444 AH.

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