Article 244 of the Saudi Civil Transactions Law
المادة 244 من نظام المعاملات المدنية · الفصل الأول: حوالة الحق
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.
Official text (Arabic)
This article has not been amended since the law was issued.
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 مما أخذه من المحال له مع النفقات ولو وجد اتفاق بخلاف ذلك.
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 244 explained in plain English
If the assignor's guarantee applies in an assignment of a right, the assignee may have recourse against him. This Article states the upper limit of that recourse.
The recourse intended is recourse under the guarantee in accordance with Articles 242 and 243:
- Article 242: In an assignment for consideration the assignor 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.
- Article 243: The assignor does not guarantee the debtor's solvency except by special agreement, and this guarantee applies to solvency at the time the assignment is concluded unless otherwise agreed.
If the assignee has recourse against the assignor in these cases, the assignor is not required to return more than he took from the assignee, plus expenses. So if the nominal value of the right is greater than what the assignee paid, the assignee cannot claim the difference on the basis of this guarantee.
More importantly, this limit may not be exceeded by agreement; the Article provides that it applies "even if there is an agreement to the contrary." Any term requiring the assignor to return more than he took with expenses is not given effect within the scope of this recourse.
This protects the assignor from his guarantee becoming a source of profit for the assignee, and confines the guarantee to returning what was paid. When calculating what may be recovered or in a dispute over expenses, it is advisable to consult a lawyer specializing in civil cases.
Practical example
Sultan bought from Khalid a right worth SAR 100,000 owed by a company in Makkah for SAR 80,000. It then turned out that the right did not exist when the assignment was concluded. Sultan has recourse against Khalid under the guarantee, but Khalid is required to return only SAR 80,000 plus expenses, not SAR 100,000, even if their contract provided 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 244 of the Saudi Civil Transactions Law
How much does the assignor return if the assignee has recourse against him under the guarantee?
He is not required to return more than he took from the assignee, together with expenses.
Can the parties agree that the assignor returns the full value of the right?
The assignor is not required to return more than he took with expenses, even if there is an agreement to the contrary.
When may the assignee have recourse against the assignor under the guarantee?
In the guarantee cases provided for by Articles 242 and 243, such as the guarantee of the existence of the right in an assignment for consideration or an agreed guarantee of solvency.
Articles this article refers to
- 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
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 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
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.