Article 103 of the Saudi Civil Transactions Law
المادة 103 من نظام المعاملات المدنية · الفرع الرابع: آثار العقد
The article allows the beneficiary of a stipulation for a third party's benefit to be a future person, or one not identified at the time of the contract, if he can be identified when the obligation is performed.
Official text (Arabic)
This article has not been amended since the law was issued.
يجوز في الاشتراط لمصلحة الغير أن يكون المنتفع شخصًا مستقبلًا أو أن يكون شخصًا غير معين وقت العقد إذا كان من الممكن تعيينه عند الوفاء بالالتزام المشترط.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 103 explained in plain English
This article widens the scope of stipulation for the benefit of a third party: the beneficiary need not exist or be known when the contract is concluded. The text allows two situations:
- The beneficiary is a future person, meaning one who does not yet exist when the contract is made.
- The beneficiary is a person not identified at the time of the contract.
In both cases the text requires one condition: that it be possible to identify the beneficiary when the stipulated obligation is performed. What matters is not knowing him at the time of contracting, but being able to determine who he is when performance falls due.
This rule is useful in many practical arrangements, such as a person stipulating a benefit for any children he may have, or for whoever holds a certain capacity at the time of performance, as long as that person can be identified at performance.
The article is linked to Article 102, which sets out the stipulator's right to revoke the stipulation or substitute another beneficiary, and its limits. The text sets no particular method for identifying the beneficiary; what matters is that identifying him is possible at performance.
When drafting a contract that includes a stipulation for a future or unidentified person, consider using a lawyer who specializes in civil cases to fix the description by which the beneficiary will be identified.
Practical example
Adel contracted with an organization offering educational programs in Riyadh for it to provide a program to the first child born to him. The beneficiary does not exist at the time of the contract, but the stipulation is permitted because the beneficiary can be identified when the obligation is performed.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 103 of the Saudi Civil Transactions Law
Can a stipulation be made for a person not yet born?
Yes. The beneficiary may be a future person if he can be identified when the stipulated obligation is performed.
Must the beneficiary's name be specified when the contract is signed?
No. The beneficiary may be unidentified at the time of the contract, provided he can be identified at performance.
What is the basic condition in this case?
That it be possible to identify the beneficiary when the stipulated obligation is performed.
More articles on Effects and Interpretation of Contracts
- Article 30
The article provides that the rules of the contract chapter apply to named and unnamed contracts, without prejudice to the legal provisions that regulate contracts of a special nature.
تطبق الأحكام الواردة في هذا الفصل على العقود المسماة وغير المسماة، وذلك دون إخلال بالأحكام الواردة في النصوص النظامية التي تنظم عقودًا ذات طبيعة خاصة.
- Article 40
In adhesion contracts, acceptance is limited to mere submission to fixed terms set by the offeror that are not open to discussion.
القبول في عقود الإذعان يقتصر على مجرد التسليم بشروط مقررة يضعها الموجب ولا يقبل مناقشة فيها.
- Article 45
A framework agreement is a contract in which the parties set the basic terms of the contracts they create between them under its provisions, and it is treated as part of those contracts.
الاتفاق الإطاري عقدٌ يُحدد المتعاقدان بمقتضاه البنود الأساسية التي تخضع لها العقود التي ينشئها المتعاقدان بينهما وفقًا لأحكام هذا الاتفاق، ويُعد ذلك الاتفاق جزء
- Article 46
If the contracting parties, expressly or impliedly, refer in the contract to a model document, specified rules or any other document, it is treated as part of the contract.
إذا أحال المتعاقدان صراحةً أو ضمنًا في العقد إلى أحكام وثيقةٍ نموذجيَّةٍ أو قواعد محددة أو أي وثيقة أخرى عُدَّت جزءًا من العقد.
- Article 73
If the parties do not specify the quantity of the subject matter and the contract contains what allows it to be determined, the court determines it; if they do not agree on quality and there is no custom or indication, an item of medium quality must be delivered.
1- إذا لم يحدِّد المتعاقدان مقدار المحل وتضمن العقد ما يمكن للمحكمة تحديده به؛ حددته بناءً على ذلك. 2- إذا لم يتفق المتعاقدان على درجة جودة الشيء ولم يوجد عرف أ
- Article 87
The article permits contracting through representation unless statutory texts require otherwise, and divides representation into agreed, judicial and statutory.
1- يصح التعاقد بالنيابة؛ ما لم تقتض النصوص النظامية خلاف ذلك. 2- تكون النيابة في التعاقد اتفاقيةً أو قضائيةً أو نظاميةً.
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.