Article 112 of the Saudi Civil Transactions Law
المادة 112 من نظام المعاملات المدنية · الفرع السادس: فسخ العقد وانفساخه أولًا: الإقالة
The article provides that termination of a contract cannot be asserted against the contracting party's specific successor if he acquired a real right in good faith.
Official text (Arabic)
This article has not been amended since the law was issued.
لا يحتج بفسخ العقد تجاه الخلف الخاص للمتعاقد إذا كسب حقًّا عينيًّا بحسن نية.
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 112 explained in plain English
This article protects a third party who might be harmed by the termination of a contract to which he was not a party. The rule is that termination of the contract cannot be asserted against the contracting party's specific successor if two conditions are met:
- The specific successor acquired a real right (that is, a right over the thing itself, such as ownership).
- He acquired it in good faith.
A specific successor is someone to whom a particular thing passed from one of the contracting parties, such as someone who bought from the first buyer the thing he had bought.
The importance of this rule appears when compared with Article 111, which provides that termination returns the contracting parties to their position before contracting. If that rule were applied without limit, someone who bought the thing from one of the contracting parties, without knowing of what threatened the first contract, would be harmed. Article 112 therefore prevents termination from being asserted against him where he is in good faith and acquired a real right.
The text does not define good faith or specify how it is proved, and it does not state what the party who terminated the contract may recover from the other contracting party in this case. The rule is also linked to Article 113, which sets out conditions that do not lapse on termination of a contract.
Anyone who bought real estate or movable property and is surprised by the termination of the original seller's contract should consider consulting a lawyer who specializes in real estate or civil cases to assess their position.
Practical example
Khalid sold land in Riyadh to Saeed, and Saeed then sold it to Abdulrahman, who knew of no dispute between Khalid and Saeed. The first contract was later terminated because Saeed did not pay the price. This termination cannot be asserted against Abdulrahman because he acquired a real right over the land in good faith.
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 112 of the Saudi Civil Transactions Law
Is the second buyer affected by the termination of the first seller's contract?
Termination of the contract cannot be asserted against the contracting party's specific successor if he acquired a real right in good faith.
What are the conditions for protecting the specific successor from termination?
That he acquired a real right, and that he did so in good faith.
Who is a specific successor?
Someone to whom a particular thing passed from one of the contracting parties, such as someone who bought that thing from him.
More articles on Voidness and Termination of Contracts
- Article 49
The transactions of a minor unable to discern are void.
تصرفات الصغير غير المميز باطلة.
- Article 50
The purely beneficial transactions of a minor able to discern are valid and the purely harmful ones void; those between benefit and harm are valid, and his guardian, executor or he after majority may seek to annul them.
1- إذا كانت تصرفات الصغير المميز نافعةً نفعًا محضًا فهي صحيحة، وإذا كانت ضارةً ضررًا محضًا فهي باطلة. 2- إذا كانت تصرفات الصغير المميز دائرةً بين النفع والضرر ف
- Article 53
The transactions of a spendthrift and of a person of impaired judgment after interdiction are treated like those of a minor able to discern; before interdiction they are valid unless they resulted from exploitation or collusion.
تصرفات السفيه وذي الغفلة بعد الحجر عليهما في حكم تصرفات الصغير المميز، أما تصرفاتهما قبل الحجر فصحيحةٌ إلا إذا كانت نتيجة استغلالٍ أو تواطؤٍ.
- Article 56
If a partially incapacitated person resorts to fraudulent means to conceal his incapacity, he must compensate the other contracting party for the harm caused by the annulment of the contract.
إذا لجأ ناقص الأهلية إلى طرقٍ احتياليَّةٍ لإخفاء نقص أهليته لزمه التعويض عن الضرر الذي أصاب المتعاقد معه بسبب إبطال العقد.
- Article 57
A contracting party may seek annulment of the contract if he made a material mistake without which he would not have agreed to the contract, particularly a mistake in a quality of the subject matter, in the other party's person or quality, or in a statutory ruling.
للمتعاقد طلب إبطال العقد إذا وقع في غلط جوهري لولاه لم يرض بالعقد، وبخاصة إذا كان الغلط الجوهري في صفة المحل أو شخص المتعاقد معه أو صفته أو الحكم النظامي.
- Article 58
A contracting party's mistake is taken into account only if the other party made the same mistake, knew he had made it, or could easily have discovered it.
لا يُعتد بغلط المتعاقد إلا إذا كان المتعاقد الآخر قد وقع معه في الغلط نفسه أو علم بوقوعه فيه أو كان من السهل عليه أن يتبينه
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.