Article 287 of the Saudi Civil Transactions Law
المادة 287 من نظام المعاملات المدنية · الفرع الثاني: المقاصة
The article prevents set-off between a depositary's debt against the depositor and the deposit, or between a borrower's debt against the lender and the loaned item, except by agreement of the parties.
Official text (Arabic)
This article has not been amended since the law was issued.
إذا كان للمودع لديه دينٌ على المودع أو كان للمستعير دين على المعير، فلا تقع المقاصة بين الدين والوديعة أو بين الدين والشيء المعار ولو كان الدين من نوع أي منهما إلا باتفاق الطرفين.
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 287 explained in plain English
This article excludes two cases from the general permission of set-off, relating to deposits and loans for use.
First case - deposit: if the depositary (the person who received the deposit) is owed a debt by the depositor (the owner of the deposit), set-off does not take place between that debt and the deposit.
Second case - loan for use: if the borrower is owed a debt by the lender, set-off does not take place between that debt and the loaned item.
The prohibition applies even if the debt is of the same kind as the deposit or the loaned item. If a person deposits a sum of money with another, and the depositary is owed a monetary debt by the depositor, the depositary may not deduct his debt from the deposited sum merely because they are of the same kind.
The exception: set-off is permitted in both cases if it is by agreement of the parties.
This article relates to Article 286, which prevents set-off from taking place to the detriment of rights acquired by third parties, and to Article 288, which explains that a claim being no longer actionable due to the passage of time at the point set-off is invoked does not prevent set-off, as long as its conditions were met before that period passed.
A person who holds a deposit or a loaned item and is owed a debt by its owner should know that set-off between his debt and what he holds takes place only by agreement of the parties, and should consult a lawyer specializing in civil cases about claiming his debt.
Practical example
Yousef left SAR 10,000 as a trust with his friend Hamad, and Yousef owed Hamad a debt of SAR 6,000. When Yousef asks for the trust back, Hamad may not deduct the SAR 6,000 from it without agreement with Yousef. Instead, he returns the trust and claims his debt.
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 287 of the Saudi Civil Transactions Law
May a depositary deduct his debt from the deposit?
No. Set-off does not take place between the debt and the deposit, even if the debt is of the same kind, except by agreement of the parties.
May a borrower keep the loaned item against a debt owed to him by the lender?
Set-off does not take place between the borrower's debt against the lender and the loaned item except by agreement of the parties.
When is set-off permitted with a deposit or a loaned item?
If the parties agree to it.
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.

