Article 245 of the Saudi Civil Transactions Law
المادة 245 من نظام المعاملات المدنية · الفصل الأول: حوالة الحق
The Article allows the debtor to assert against the assignee the defenses he had against the assignor when the assignment became effective against him, and defenses derived from the assignment contract.
Official text (Arabic)
This article has not been amended since the law was issued.
للمدين أن يتمسك تجاه المحال له بالدفوع التي كان له أن يتمسك بها تجاه المحيل وقت نفاذ الحوالة في حقه، كما يجوز له أن يتمسك بالدفوع المستمدة من عقد الحوالة.
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 245 explained in plain English
Defenses are the objections by which a debtor answers the creditor's claim, such as saying that the debt has been paid or that the contract from which it arose is void. This Article protects the debtor in an assignment of a right, because the assignment is made between the assignor and the assignee, and the debtor's position should not be weakened because of it.
The Article provides that the debtor has two kinds of defenses against the assignee:
- Defenses he had against the assignor: Every defense the debtor could assert against the original creditor he may assert against the assignee, provided it existed when the assignment became effective against him. What arises between the debtor and the assignor after the assignment becomes effective against the debtor is not covered by this paragraph.
- Defenses derived from the assignment contract: The debtor may also object on the basis of matters relating to the assignment contract itself.
To determine when the assignment becomes effective against the debtor, refer to Article 240, as the assignment is not effective against the debtor unless he accepted it or was notified of it by any means prescribed by law. This is consistent with Article 241, which transfers the right to the assignee with its attributes, so the assignee takes the right subject to the defenses that apply to it.
A debtor who is notified that his debt has been assigned to another person therefore does not lose the objections he had at that time. To assess a particular defense, it is advisable to consult a lawyer specializing in civil cases.
Practical example
An establishment in Riyadh bought goods from a supplier and did not pay the price because the goods arrived defective. The supplier assigned his right to the price to a financing company, and the establishment was notified. When the financing company claimed the price from the establishment, the establishment could assert against it the same objection it had against the supplier when the assignment became effective against it.
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 245 of the Saudi Civil Transactions Law
Does the debtor lose his right to object if his debt is assigned to a new creditor?
No. He may assert against the assignee the defenses he had against the assignor when the assignment became effective against him.
May the debtor object to the assignment contract itself?
Yes. He may assert defenses derived from the assignment contract.
When does the assignment become effective 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 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.