Article 238 of the Saudi Civil Transactions Law
المادة 238 من نظام المعاملات المدنية · الفصل الأول: حوالة الحق
The Article allows a creditor to assign his right to another person unless legal provisions, agreement or the nature of the obligation prevent it, and does not require the debtor's consent for the assignment to be concluded.
Official text (Arabic)
This article has not been amended since the law was issued.
للدائن أن يحيل حقه إلى شخص آخر، وذلك ما لم تقتضِ النصوص النظامية أو الاتفاق أو طبيعة الالتزام خلاف ذلك، ولا يشترط لانعقاد الحوالة رضى المدين بها.
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 238 explained in plain English
This Article opens the provisions on assignment of a right, meaning a creditor transfers his right against his debtor to another person called the assignee.
The rule: A creditor may assign his right to another person.
The restrictions: Assignment is not permitted if the following require otherwise:
- Legal provisions, for example where a law prohibits assignment of a particular right.
- Or agreement, for example where the creditor and debtor agree to prohibit assignment of the right.
- Or the nature of the obligation, if the right by its nature cannot be transferred to anyone other than its holder.
The debtor's consent: The debtor's consent is not required for the assignment to be concluded. The assignment is concluded between the assigning creditor and the assignee without need of the debtor's approval.
But conclusion of the assignment is one thing and its enforceability against the debtor and third parties is another. Article 240 provides that an assignment of a right is not enforceable against the debtor or third parties unless the debtor accepted it or was notified of it by any means prescribed by law. Article 239 also restricts the validity of the assignment to the extent that the right is attachable.
Assignment of rights is used in commercial and civil dealings, for example where a supplier assigns his receivables from his customers to another party. Anyone who wants to assign his right should review the original contract to make sure there is no agreement preventing assignment. To draft an assignment contract or assess its validity, it is advisable to consult a lawyer specializing in civil cases.
Practical example
A supply company in Riyadh is owed SAR 200,000 by a customer. The company agrees with another party to assign this right to it. The assignment is concluded without need of the customer's consent, unless the contract between the company and the customer contains an agreement preventing assignment, or a legal provision prevents it, or the nature of the obligation requires otherwise.
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 238 of the Saudi Civil Transactions Law
May a creditor assign his right to another person?
Yes, unless legal provisions, agreement or the nature of the obligation require otherwise.
Is the debtor's consent required for the validity of an assignment of a right?
The debtor's consent is not required for the assignment to be concluded, but its enforceability against him requires his acceptance of it or notice to him under Article 240.
Can assignment of a right be prohibited by agreement?
Yes. The Article excludes cases where agreement requires otherwise than the permissibility of assignment.
More articles on Assignment of Rights and Debts
- Article 239
The Article limits the validity of an assignment of a right to the portion that is attachable, so what cannot be attached cannot validly be assigned.
لا تصح حوالة الحق إلا بقدر ما يكون منه قابلًا للحجز.
- Article 240
The Article requires, for an assignment to be enforceable against the debtor and third parties, that the debtor accept it or be notified of it by a lawful means, and that acceptance relied on against third parties be in writing with a certain date.
لا تكون حوالة الحق نافذة تجاه المدين أو تجاه الغير إلا إذا قبلها المدين أو أُعلِم بها بأي وسيلة مقررة نظامًا، على أن نفاذها تجاه الغير بقبول المدين يستلزم أن يك
- Article 241
The Article provides that the assigned right passes to the assignee with its attributes, accessories and guarantees as it was with the assignor.
ينتقل الحق إلى المحال له بصفاته وتوابعه وضماناته.
- Article 242
The Article determines the assignor's guarantee: in an assignment for consideration he guarantees the existence of the right at the time it is concluded unless otherwise agreed, and in an assignment without consideration he does not guarantee its existence.
1- إذا كانت الحوالة بعوض، لم يضمن المحيل إلا وجود الحق المحال به وقت انعقاد الحوالة، ما لم يتفق على خلاف ذلك. 2- إذا كانت الحوالة بغير عوض، لم يضمن المحيل وجود
- Article 243
The assignor does not guarantee the debtor's solvency except by special agreement, and if he guarantees it, the guarantee applies to solvency at the time the assignment is concluded unless otherwise agreed.
لا يضمن المحيل يسار المدين إلا إذا وجد اتفاق خاص على هذا الضمان، وإذا ضمن المحيل يسار المدين لا ينصرف هذا الضمان إلا إلى اليسار وقت انعقاد الحوالة ما لم يتفق عل
- Article 244
The Article sets the ceiling of the assignee's recourse against the assignor under the guarantee: the assignor is required only to return what he took together with expenses, even if otherwise agreed.
إذا رجع المحال له بالضمان على المحيل طبقًا للمادتين (الثانية والأربعين بعد المائتين) و(الثالثة والأربعين بعد المائتين) من هذا النظام، فلا يلزم المحيل ردُّ أكثر
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.