Article 318 of the Saudi Civil Transactions Law
المادة 318 من نظام المعاملات المدنية · الفرع الثاني: آثار عقد البيع أولًا: التزامات البائع
Ownership of the item sold passes to the buyer on conclusion of the sale, without prejudice to Articles 655, 656 and 657, and a sale made in bulk does not prevent this.
Official text (Arabic)
This article has not been amended since the law was issued.
1- تنتقل ملكية المبيع إلى المشتري بانعقاد البيع، وذلك دون إخلال بأحكام المواد (الخامسة والخمسين بعد الستمائة) و(السادسة والخمسين بعد الستمائة) و(السابعة والخمسين بعد الستمائة) من هذا النظام.
2- لا يمنع من انتقال الملكية كون البيع تمَّ جُزافًا ولو كان تعيين الثمن فيه يتوقف على تقدير المبيع.
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 318 explained in plain English
This article determines the moment ownership of the item sold passes to the buyer, and it contains two rulings:
First: ownership passes on conclusion of the sale. As soon as the sale contract is concluded, ownership of the item sold passes to the buyer, without waiting for delivery or payment of the price under this general rule. But the text qualifies this with the phrase "without prejudice to Articles 655, 656 and 657" of the Law, meaning that what those articles provide remains in force, and their texts should be consulted to see what they provide.
Second: sale in bulk. A sale in bulk is the sale of a thing as a whole without measuring, weighing or counting each unit. The article provides that the sale being in bulk does not prevent the passing of ownership, even if determining the price depends on estimating the item sold, for example where the price is calculated after it is weighed or counted.
This article is linked to Article 317, which provides that the price is due immediately unless it is agreed to be deferred or paid in installments for a known term, and that the term starts from the date of the contract unless agreed otherwise. It is also linked to Article 319, which obliges the seller to do what is necessary on his side to transfer ownership of the item to the buyer and to refrain from any act that would make the transfer impossible or difficult.
Because the passing of ownership is subject to the articles referred to, anyone who wants to know the moment ownership passes in a particular sale, such as the sale of real estate, is advised to consult a lawyer specialized in civil or real estate cases to find out whether those articles apply to his situation.
Practical example
A trader in Al-Ahsa bought a farmer's entire date harvest in a warehouse as a whole, with the price to be calculated after the quantity was weighed. Under this article the sale being in bulk does not prevent ownership from passing, even though determining the price depends on weighing the item sold, without prejudice to Articles 655, 656 and 657.
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 318 of the Saudi Civil Transactions Law
When does ownership of the item sold pass to the buyer?
It passes on conclusion of the sale, without prejudice to Articles 655, 656 and 657 of the Law.
Does ownership pass in a bulk sale before the price is fixed?
Yes. The sale being made in bulk does not prevent the passing of ownership, even if determining the price depends on estimating the item sold.
What is the seller's obligation to transfer ownership?
Under Article 319, the seller must do what is necessary on his side to transfer ownership and refrain from anything that would make the transfer impossible or difficult.
Articles this article refers to
- Article 655
The article provides that ownership and other real rights in real estate and movables pass by contract, where the contract concerns a subject matter owned by the person making the disposition and in accordance with the legal provisions.
تنتقل الملكية وغيرها من الحقوق العينية في العقار والمنقول بالعقد متى ورد على محل مملوك للمتصرف وفقًا للنصوص النظامية.
- Article 656
The article distinguishes between a subject matter specified by its identity, whose ownership passes by the contract, and one specified by its kind, none of whose units passes in ownership until it is set apart.
1- إذا كان محل العقد معيَّنًا بالذات انتقلت ملكيته بالعقد. 2- إذا كان محل العقد معيَّنًا بالنوع لم تنتقل الملكية في أيٍّ من أفراده إلا بإفرازه.
- Article 657
The article provides that if a legal provision requires a procedure for ownership or other real rights to pass, they do not pass until that procedure is completed.
إذا اشترط نص نظامي إجراءً لانتقال الملكية والحقوق العينية الأخرى، لم تنتقل إلا باستكمال ذلك الإجراء.
More articles on Sale Contract
- Article 23
The article defines consumable things as those whose use, according to what they are prepared for, is limited to consuming or spending them, and treats everything prepared in stores for sale as consumable.
الأشياء القابلة للاستهلاك هي التي ينحصر استعمالها -بحسب ما أُعدّت له- في استهلاكها أو إنفاقها، ويعد قابلًا للاستهلاك كل ما أعد في المتاجر للبيع.
- Article 44
Paying earnest money gives only the payer the right to withdraw from the contract without recovering it, unless otherwise agreed; the court sets the withdrawal period if the parties have not.
1- دفع العربون عند إبرام العقد يفيد أن لدافع العربون وحده الحق في العدول عن العقد، وليس له إذا عدل أن يسترد مبلغ العربون، وذلك كله ما لم يتفق على خلافه. 2- إذا
- Article 109
The article provides that exchange contracts are concluded on the basis that the subject matter is free of defects except what custom tolerates, and that an intolerable defect is a breach of the obligation.
تُعدُّ عقود المعاوضات منعقدةً على أساس سلامة محل العقد من العيوب إلا ما جرى العرف على التسامح فيه، فإذا تبيَّن في المحل عيبٌ لم يجر العرف على التسامح فيه؛ عُدَّ
- Article 165
The article provides that a right to a thing specified by kind attaches to a particular item only once it is set apart, and lets the creditor, on non-performance, obtain a like item at the debtor's expense.
1- إذا تعلق الحق بشيء معين بالنوع لا بالذات، فإنه لا يختص بشيء بذاته من ذلك النوع إلا بإفرازه. 2- إذا لم يقم المدين بتنفيذ التزامه جاز للدائن أن يحصل على شيء من
- Article 166
The article places the risk of destruction or damage on the debtor who failed to deliver, in two cases: transfer of a real right and an obligation to perform work involving delivery, each on different conditions.
1- الالتزام بنقل حق عيني يتضمن الالتزام بتسليم الشيء والمحافظة عليه حتى تسليمه، فإذا لم يقم المدين بتسليمه حتى هلك أو تلف كانت تبعة ذلك عليه. 2- إذا كان محل الا
- Article 307
Article 307 defines sale as a contract under which the seller transfers ownership of the item sold to the buyer for a cash price.
البيع عقد يُمَلِّكُ بمقتضاه البائع المبيع للمشتري مقابل ثمنٍ نقدي.
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.