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Business and Corporate

Commercial Contract Drafting and Review in Dammam Commercial Contracts

A business may need a commercial contract drafted with care, or an existing contract reviewed to understand clearly what it requires.

Situations where this may apply

  • You need a new commercial contract drafted.
  • You want an existing commercial contract reviewed to understand its obligations and legal implications.
  • You have a question about a specific clause or obligation in a commercial contract.

Legal framework

The Civil Transactions Law, issued under Royal Decree No. M/191, governs contract rules in Saudi Arabia, including the following:

  • Where a contract is made by adhesion, meaning acceptance of set terms laid down by the offeror that are not open to discussion, and it contains oppressive terms, a court may amend them or release the adhering party from them as justice requires, and any agreement to the contrary is void. Articles 40 and 96
  • Where exceptional general circumstances that could not be foreseen at the time of contracting make performing the obligation so onerous that it threatens the debtor with grave loss, the debtor may, without unjustified delay, invite the other party to negotiate; asking to negotiate does not entitle the debtor to stop performing, and if no agreement is reached within a reasonable time a court may reduce the onerous obligation to a reasonable level. Article 97
  • A right is not extinguished by the passage of time, but a claim for it will not be heard against a party who denies it once ten years have passed, unless a legal provision sets another period or the right falls within the exceptions the law sets out. Article 295
  • For claims within the jurisdiction of the Commercial Courts, a claim will not be heard, absent a special provision, after five years from the date the right claimed arose, unless the defendant acknowledges the right or the claimant presents an excuse the court accepts. Article 24

Common types of matters

  • Drafting a new commercial contract or reviewing a proposed draft before it is signed.
  • Reviewing a specific clause in an existing contract to understand the obligation it creates.
  • Assessing whether changed circumstances make performing an existing contract onerous enough to warrant revisiting it.
  • Questions about whether terms set by the other party without genuine negotiation are fair.

How a matter may proceed

  1. A commercial contract is formed when an offer is matched by an acceptance, and intent may be expressed in words, in writing, by an understood gesture, or by conduct, expressly or impliedly, unless the law, the parties' agreement, or the nature of the transaction requires otherwise.
  2. Where an adhesion contract contains an oppressive term, the disadvantaged party may ask a court to amend or excuse it.
  3. Where an exceptional general circumstance makes performance onerous, the process starts with inviting the other party to negotiate without unjustified delay while continuing to perform, and moves to court if no agreement is reached within a reasonable time.

Key considerations

  • Relief for unforeseen circumstances requires a genuinely exceptional, general, unforeseeable event that makes performance onerous enough to threaten the debtor with grave loss, not an ordinary shift in market conditions or costs, and asking to negotiate does not permit stopping performance.
  • Amending an adhesion contract's terms requires showing a term is genuinely oppressive, not merely unfavorable to one side.
  • As a general rule, a claim will not be heard after ten years under the Civil Transactions Law, or after five years for claims within the jurisdiction of the Commercial Courts, with shorter periods for specific situations, so confirming the right period depends on the nature of the claim itself.

Documents typically needed

  • The contract itself, whether in draft or signed form.
  • Any later amendments or side letters to the original contract.
  • Correspondence relevant to the disputed clause or obligation.
  • Evidence supporting an unforeseen circumstance, where the question concerns asking for the contract to be reconsidered.

Frequently asked questions

In certain cases, yes. If exceptional general circumstances that could not be foreseen arise after contracting and make performing the obligation so onerous that it threatens the debtor with grave loss, the Civil Transactions Law allows the debtor to invite the other party to negotiate without unjustified delay, without entitling the debtor to stop performing, and if no agreement is reached within a reasonable time a court may reduce the obligation to a reasonable level. An ordinary shift in market conditions is not enough on its own to meet this bar.

If the contract is an adhesion contract, where acceptance is limited to submitting to terms the other party set and would not discuss, the law allows a court to amend an oppressive term or release the adhering party from it as justice requires, and any agreement to the contrary is void.

It covers both. It includes drafting a new commercial contract, and reviewing a proposed draft before it is signed or an existing contract to understand its obligations and legal implications, and a review may focus on a single clause to understand the obligation it creates.

Not always. A contract is formed when an offer is matched by an acceptance, and intent may be expressed in words, in writing, by an understood gesture, or by conduct, expressly or impliedly, unless the law, the parties' agreement, or the nature of the transaction requires otherwise.

The right itself is not extinguished by the passage of time, but as a general rule a claim for it will not be heard against a party who denies it once ten years have passed, unless a legal provision sets another period or the right falls within the exceptions the law sets out. For claims within the jurisdiction of the Commercial Courts, a claim will not be heard, absent a special provision, after five years from the date the right claimed arose, unless the defendant acknowledges the right or the claimant presents an excuse the court accepts. Because shorter periods apply in specific situations, confirming the right period depends on the nature of the claim itself.

No. Amending an adhesion contract's terms requires showing that a term is genuinely oppressive, not merely unfavorable to one side. Where that is shown, the disadvantaged party may ask a court to amend or excuse it.

The Civil Transactions Law, issued under Royal Decree No. M/191, governs contract rules in Saudi Arabia. Its provisions include rules on adhesion contracts, on exceptional general circumstances that make performing an obligation onerous, and on claims not being heard once a set period has passed.

They typically include the contract itself, in draft or signed form, any later amendments or side letters, and correspondence about the disputed clause or obligation. Where the question concerns asking for the contract to be reconsidered because of an unforeseen circumstance, evidence supporting that circumstance is added.

Official references

The legal texts and official publications this content relies on.

Civil Transactions Law: acceptance in adhesion contracts and oppressive terms (official Arabic text)

Articles 40 and 96
Published by:
Ministry of Justice
View official source

Civil Transactions Law: unforeseen circumstances (official Arabic text)

Article 97
Published by:
Ministry of Justice
View official source

Civil Transactions Law: claims not heard after lapse of time (official Arabic text)

Article 295
Published by:
Ministry of Justice
View official source

Commercial Courts Law: period after which claims are not heard (official Arabic text)

Article 24
Published by:
Ministry of Justice
View official source

Civil Transactions Law: formation of a contract and expression of intent (official Arabic text)

Articles 31 to 33
Published by:
Ministry of Justice
View official source

This is general information based on the cited laws when this page was prepared. It may change, and it is not legal advice on a specific case.