Commercial Contracts in Saudi Arabia

Commercial contracts in Saudi Arabia

The firm covers Saudi matters in cooperation with an announced partner office in Saudi Arabia. That partner office is not a branch owned by the firm, and the firm does not itself hold a Saudi law practice license; local licensing and representation are assessed for each matter in the Kingdom. We draft, review and negotiate commercial contracts of all types - for example supply, distribution, agency and services agreements - and advise on how the contract should be framed before it is signed.

The legal framework in Saudi Arabia

Commercial contracts in Saudi Arabia are governed mainly by the Civil Transactions Law (Royal Decree No. M/191 of 29/11/1444H, 18 June 2023). The law was published on 19 June 2023 and entered into force 180 days later, in December 2023. It is a single codified statute that governs civil transactions and, to some extent, commercial ones, so it is the first text a Saudi contract is checked against. Which rules apply depends on the contract type, the parties and the chosen forum.

How we work on a contract

We start with the parties, who can sign for them, the governing law and the forum. We then review or draft the clauses that carry the risk: price and payment, delivery and acceptance, termination, liability, confidentiality and dispute resolution. Signed versions, notices and the negotiation record are kept so a later disagreement can be handled on evidence. Where a disagreement already exists, see our dispute resolution practice, or read the General Commercial & Corporate overview. To scope a specific contract, contact our team. For Saudi Arabia, every clause is read against the Civil Transactions Law.

Drafting points for Saudi Arabia

For a Saudi counterparty we compare the Arabic text with any other language version and state which one prevails. We align termination, liability and payment clauses with the codified rules, and we check which version of a rule applies to a contract signed before December 2023. The counterparty's entity form and signing authority are checked against the Companies Law (Royal Decree No. M/132 of 2022). Local licensing and representation questions go through our partner office instead of being assumed.

MENA coordination

The firm was founded in Kuwait in 1986 and has a branch in Cairo. It covers MENA matters in cooperation with partner offices in Saudi Arabia, the UAE and Qatar, and partner offices in Turkey and the United States. Those partner offices are not branches owned by the firm; local licensing and advice are assessed in the relevant jurisdiction.

This page is general information, not advice for a particular entity or transaction.

Frequently asked questions

What law governs commercial contracts in Saudi Arabia?

Mainly the Civil Transactions Law (Royal Decree No. M/191 of 29/11/1444H, 18 June 2023). Which provisions apply depends on the contract type, the parties and the chosen forum.

When did the Saudi Civil Transactions Law enter into force?

It was issued by Royal Decree No. M/191 on 18 June 2023, published on 19 June 2023, and entered into force 180 days after publication, in December 2023.

Does the firm have an office in Saudi Arabia?

The firm covers Saudi matters in cooperation with an announced partner office in Saudi Arabia. That partner office is not a branch owned by the firm, and the firm does not itself hold a Saudi law practice license; local licensing and representation are assessed for each matter in the Kingdom.

Other markets

Company Formation in Saudi Arabia · Commercial Contracts in Egypt · Commercial Contracts in the UAE · Commercial Contracts in Qatar · Commercial Contracts in Oman · Commercial Contracts in Bahrain