Commercial Court Law (Commercial Code)

Purpose and scope

• The Kingdom's oldest commercial law; it defines a merchant as one who engages in commercial transactions as a profession (Article 1) and lists commercial acts (Article 2 as amended).
• Later laws have replaced many of its provisions, such as those on bankruptcy, commercial papers and commercial courts, so the newer law prevails in case of conflict.

Key rules, rights and obligations

• An owner selling the produce of their land or their property, or buying something not for resale, is not a commercial act (Article 3 as amended).
• Receiving goods from a carrier and paying the full fare counts as acknowledging their sound receipt unless shown otherwise (Article 27).
• Settled custom governs a broker's rights, duties and fee (Article 31), and a general agent or broker may not buy the principal's property for themselves without the owner's permission (Article 141).

Violations, penalties and common problems

• A broker who introduces fraud or deception into a sale or hides the true price is treated as acting in bad faith and is liable (Article 143).
• Common problem: relying on an article of this law that newer laws have replaced, so check that an article is still in force before citing it.

Procedures and key deadlines

• Commercial disputes are now heard by the commercial courts under their own law, and deadlines and procedures follow the laws in force.

An advisory summary prepared by Al-Bayan Al-Wadih Law Firm. It is not an official text and does not replace the law, its implementing regulations, or advice from a specialised lawyer. The official published text and its amendments prevail.