Article 241 of the Saudi Civil Transactions Law
المادة 241 من نظام المعاملات المدنية · الفصل الأول: حوالة الحق
The Article provides that the assigned right passes to the assignee with its attributes, accessories and guarantees as it was with the assignor.
Official text (Arabic)
This article has not been amended since the law was issued.
ينتقل الحق إلى المحال له بصفاته وتوابعه وضماناته.
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 241 explained in plain English
Assignment of a right is where a creditor (called the assignor) transfers his right owed by his debtor to another person (called the assignee). This Article states the effect of this transfer: the right does not change by being transferred, but passes to the assignee in the condition it had with the assignor.
According to the text of the Article, the transfer includes three things:
- The attributes of the right: the descriptions the right had before the assignment, which remain attached to it afterwards.
- Its accessories: what is attached to the right and follows it.
- Its guarantees: what secured collection of the right, such as a pledge or a suretyship, which passes with the right for the assignee's benefit.
The assignee thus takes the assignor's place in the right itself, and need not create new guarantees for what was previously secured.
This Article is connected with Article 240, which makes the assignment enforceable against the debtor or third parties if the debtor accepted it or was notified of it by any means prescribed by law, and requires, for enforceability against third parties by the debtor's acceptance, that the acceptance be in writing and have a certain date. It is also connected with Article 242, which sets out what the assignor guarantees: if the assignment is for consideration, he guarantees only the existence of the right at the time it is concluded unless otherwise agreed, and if it is without consideration, he does not guarantee the existence of the right.
A person who buys a right or accepts its assignment should check the attributes and guarantees of the right before contracting, and, where needed, consult a lawyer specializing in civil cases.
Practical example
Ahmed is owed SAR 200,000 by a company in Riyadh, and the sum is secured by a pledge over a property of the company. Ahmed assigned this right to Khalid. Under the Article the right passes to Khalid together with its guarantee, so Khalid becomes the holder of the right secured by the pledge just as Ahmed was.
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 241 of the Saudi Civil Transactions Law
Do guarantees pass with the right when it is assigned?
Yes. The Article provides that the right passes to the assignee with its attributes, accessories and guarantees.
Does the right change after it is assigned to someone else?
No. The right passes with the attributes it had with the assignor.
When is an assignment of a right enforceable against the debtor?
Under Article 240, if the debtor accepted it or was notified of it by any means prescribed by law.
More articles on Assignment of Rights and Debts
- Article 238
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.
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.
- 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 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.