Article 246 of the Saudi Civil Transactions Law
المادة 246 من نظام المعاملات المدنية · الفصل الأول: حوالة الحق
If the same right is assigned more than once, the assignment that took effect first against third parties takes precedence.
Official text (Arabic)
This article has not been amended since the law was issued.
إذا تعددت الحوالة بحقٍّ واحدٍ قدمت الحوالة التي تكون أسبق في نفاذها في حق الغير.
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 246 explained in plain English
A creditor may assign the same right to more than one person, intentionally or by mistake. Who then holds the right? The Article sets a clear rule of priority: the assignment that is earlier in taking effect against third parties takes precedence.
The criterion here is not the date on which the assignment contract was signed, but the date on which it took effect against third parties. The contract of one assignment may be older and yet a later assignment takes precedence over it if it preceded it in taking effect against third parties.
This Article does not itself state when an assignment takes effect against third parties; that is governed by the provisions of this Law on the enforceability of assignments of rights, and it is advisable to refer to them to know what is required for it.
This Article comes within provisions that protect the different parties to an assignment: Article 245 preserves for the debtor the right to assert against the assignee the defenses he had against the assignor when the assignment became effective against him, and Article 247 deals with the case of an attachment being imposed in the debtor's hands before the assignment becomes effective against third parties, treating the assignment as to the attaching creditor as another attachment and dividing the right between them as between creditors sharing proportionally.
The practical lesson is that one who accepts an assignment of a right should act promptly to do what is needed for it to take effect against third parties, because delay may let another assignment take precedence over him. Where two assignments conflict, it is advisable to consult a lawyer specializing in civil cases.
Practical example
Abdullah assigned his right of SAR 60,000 against a company in Khobar to Nasser, then assigned it a few days later to Bandar. Bandar's assignment preceded Nasser's in taking effect against third parties. Under the Article, Bandar's assignment takes precedence, even though Nasser's contract is older.
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 246 of the Saudi Civil Transactions Law
What happens if a creditor assigns the same right to two people?
The assignment that is earlier in taking effect against third parties takes precedence.
Does the date the assignment contract was signed decide?
No. The Article makes the criterion priority in taking effect against third parties.
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.