Article 269 of the Saudi Civil Transactions Law
المادة 269 من نظام المعاملات المدنية · الفرع الثاني: رفض الوفاء
If the subject of payment spoils quickly or is costly to deposit or keep in custody, the debtor may sell it at the market price with the court's permission or without it in urgency, or by auction if that is impossible, and deposit of the price takes its place.
Official text (Arabic)
This article has not been amended since the law was issued.
إذا كان محل الوفاء شيئًا يسرع إليه الفساد، أو يكلف إيداعه أو حراسته نفقاتٍ باهظة؛ جاز للمدين -بعد إذن المحكمة، أو دون إذنها في حال الاستعجال- أن يبيعه بسعر السُّوق، فإن تعذر ذلك فبالمزاد، ويقوم إيداع الثمن مقام إيداع الشيء نفسه.
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 269 explained in plain English
In principle, the debtor deposits the thing itself if the creditor refuses to accept it. But some things are not suited to deposit. This Article deals with two cases:
- The subject of payment is a thing that spoils quickly.
- Or its deposit or custody costs excessive expense.
In these two cases the debtor may sell the thing subject to the following rules:
- Permission: The sale is after the court's permission, and may be made without its permission in case of urgency.
- Method of sale: The sale is at the market price, and if that is impossible, by auction.
- Effect: Deposit of the price takes the place of deposit of the thing itself.
This rule protects both parties: the debtor does not bear burdensome expenses or have to keep a thing that perishes, and the creditor obtains the value of the thing rather than its perishing for no benefit.
The Article supplements Article 268, which makes deposit by court order for each thing according to its nature, including depositing it in kind or placing it under custody, with notice to the creditor. It is also connected with Article 270, which states cases in which deposit or its equivalent suffices without need for an offer, such as where the debtor does not know the creditor's identity or domicile, or the debt is disputed among several persons.
The Article does not specify when a case counts as urgent; therefore a debtor who sells without the court's permission should be able to prove the urgency and document the market price at which he sold. Where needed, it is advisable to consult a lawyer specializing in civil cases.
Practical example
A fruit merchant in Qassim contracted to deliver a fresh shipment to a store in Riyadh, and the store refused to receive it. Because the fruit spoils quickly and the matter was urgent, the merchant sold it at the market price and deposited the price. Deposit of the price here takes the place of deposit of the fruit itself.
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 269 of the Saudi Civil Transactions Law
What does the debtor do if the thing spoils quickly and the creditor refuses to receive it?
He may sell it at the market price with the court's permission, or without it in case of urgency, or by auction if that is impossible, and then deposit the price.
Is the court's permission required to sell the thing?
In principle the sale is after the court's permission, and it may be without it in case of urgency.
Does deposit of the price take the place of deposit of the thing?
Yes. The Article provides that deposit of the price takes the place of deposit of the thing itself.
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- Article 110
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- Article 147
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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.