Article 284 of the Saudi Civil Transactions Law
المادة 284 من نظام المعاملات المدنية · الفرع الثاني: المقاصة
The article explains that set-off extinguishes the two debts to the extent of the smaller one, from the time they become eligible for set-off.
Official text (Arabic)
This article has not been amended since the law was issued.
يترتب على المقاصة انقضاء الدينين بمقدار الأقل منهما منذ الوقت الذي يصبحان فيه صالحين للمقاصة.
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 284 explained in plain English
This article sets out the effect of set-off once it takes place, and answers two questions: what is extinguished, and from when?
What is extinguished? The two debts are extinguished to the extent of the smaller one. If one debt is larger than the other, the smaller debt is extinguished in full, an equal amount of the larger debt is extinguished, and the difference remains an outstanding debt.
From when? Extinguishment takes effect from the time the two debts become eligible for set-off, that is, from when its conditions come together, not from the time it is invoked or demanded. This has practical importance, because the effect relates back to that date.
This article complements the neighboring set-off provisions mentioned in the context:
- Article 283 allows the debtor to invoke set-off even if the place of performance of the two debts differs, with compensation to the creditor for harm.
- Article 285 provides that if one of the conditions of set-off in Article 281 is not met, set-off does not take place except by agreement of the parties.
Determining the moment at which the two debts became eligible for set-off may be disputed in some cases, and it is then advisable to consult a lawyer specializing in civil cases.
Practical example
Ali is owed SAR 30,000 by a company in Madinah, and the company is owed SAR 18,000 by Ali. The two debts became eligible for set-off on a certain date. Through set-off, Ali's debt to the company is extinguished in full, SAR 18,000 of the company's debt to Ali is extinguished, and Ali is left with SAR 12,000 owed to him. The extinguishment is counted from that date.
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 284 of the Saudi Civil Transactions Law
What happens to the two debts after set-off?
The two debts are extinguished to the extent of the smaller one, and the difference remains an outstanding debt.
From what date does set-off count?
From the time the two debts become eligible for set-off.
More articles on Performance of Debt and Set-Off
- Article 21
The article distinguishes fungible things, whose units are alike or close and can stand in for one another on performance, from non-fungible things, whose units differ in a way recognized by custom or whose like is rarely found.
1- الأشياء المثلية هي ما تتماثل آحادها أو تتقارب بحيث يمكن أن يقوم بعضها مقام بعض عند الوفاء بلا فرقٍ يُعتد به عرفًا. 2- الأشياء القيمية هي ما تتفاوت آحادها في
- Article 110
The article provides that a bilateral contract terminates automatically if performance becomes impossible for a reason beyond the debtor's control, and sets the rules for partial and temporary impossibility.
1- في العقود الملزمة للجانبين، إذا أصبح تنفيذ الالتزام مستحيلًا بسببٍ لا يد للمدين فيه، انقضى التزامه والالتزام المقابل له، وانفسخ العقد من تلقاء نفسه. 2- إذا ك
- Article 147
What a non-debtor paid cannot be recovered if, as a result, a good-faith creditor lost the debt instrument or its guarantees or abandoned his claim until its period expired, and the payer may have recourse against the original debtor.
لا محل لاسترداد غير المستحق إذا حصل الوفاء من غير المدين وترتب عليه أن الدائن وهو حسن النية قد تجرد من سند الدين أو مما حصل عليه من الضمانات أو ترك دعواه قِبَل
- Article 162
The article provides that an obligation that does not meet the conditions for compulsory enforcement remains owed on a moral basis (diyanah); if the debtor performs it voluntarily, the performance is valid and is neither a gift nor an undue payment.
إذا لم يستوف الالتزام الشروط النظامية لتنفيذه جبرًا يبقى قائمًا في ذمة المدين ديانةً، فإذا وفاه مختارًا كان وفاؤه صحيحًا ولا يُعدُّ تبرعًا ولا دفعًا لغير المستح
- Article 206
The article permits early performance by the person for whose benefit the term was set unless it harms the other party, treats the term as for the debtor's benefit in case of doubt, and returns the debt to deferred status if what was received early is claimed by another.
1- يجوز تعجيل الوفاء بالدين ممن كان الأجل لمصلحته ما لم يلحق التعجيل ضررًا بالطرف الآخر. 2- عند الشك في كون الأجل لمصلحة المدين أو الدائن فالأصل أن يُعدَّ لمصلح
- Article 207
The article provides that a deferred debt does not fall due on the creditor's death, and falls due on the debtor's death unless it is secured by security in kind, the heirs provide adequate security, or the creditor agrees it remains deferred.
لا يحل الدين المؤجل بموت الدائن، ويحل بموت المدين إلا إذا كان الدين موثَّقًا بضمانٍ عينيٍّ أو قدم الورثة ضمانًا كافيًا عينيًّا أو شخصيًّا أو وافق الدائن على بقا
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.

