Article 337 of the Saudi Civil Transactions Law
المادة 337 من نظام المعاملات المدنية · الفرع الثاني: آثار عقد البيع أولًا: التزامات البائع
An agreement may exempt the seller from the entitlement warranty, or limit or increase it, except for entitlement arising from his own act or concealed on purpose, and the buyer may still recover the price.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يصحُّ الاتفاق على إعفاء البائع من ضمان الاستحقاق أو الحد من هذا الضمان أو زيادته، عدا ما يكون منه ناشئًا عن فعل البائع أو كان قد تعمد إخفاءه.
2- لا يحول الاتفاق على الإعفاء من ضمان الاستحقاق دون حق المشتري في الرجوع على البائع بالثمن؛ ما لم يثبت أن المشتري كان يعلم وقت البيع سبب الاستحقاق.
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 337 explained in plain English
This article allows the parties to a sale to modify the entitlement warranty, that is, the seller's warranty that the item is free of third-party rights. An agreement is valid to:
- exempt the seller from the warranty;
- limit the warranty;
- increase the warranty.
But an exemption or limitation is not valid in two cases:
- where the entitlement arises from the seller's own act;
- where the seller deliberately concealed the cause of the entitlement.
The second paragraph then adds an important protection: even with a clause exempting the seller from the entitlement warranty, the buyer keeps the right of recourse against the seller for the price. This right lapses only if it is proved that the buyer knew at the time of the sale the cause of the entitlement.
An exemption clause therefore does not mean the seller keeps the price if the item is taken from the buyer, unless the buyer bought knowing the cause.
The entitlement warranty differs from the warranty against defects provided in Article 338, under which the seller warrants that the item is free of a defect that reduces its value or usefulness. Partial entitlement is dealt with in Article 336.
When drafting a clause concerning the warranty in a sale contract, it is advisable to use a lawyer specialized in civil cases.
Practical example
Khaled sold used equipment to a company in Riyadh, and the contract exempted him from the entitlement warranty. It was then established that the equipment belonged to another party and it was taken from the company. Despite the exemption clause, the company is entitled to recover the price from Khaled, unless he proves that it knew at the time of the sale the cause of the entitlement.
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 337 of the Saudi Civil Transactions Law
Is an agreement exempting the seller from the entitlement warranty valid?
Yes, and limiting or increasing it is also valid, except for what arises from the seller's own act or what he deliberately concealed.
Does the buyer recover the price if the contract has a clause exempting the seller from the warranty?
Yes, unless it is proved that he knew the cause of the entitlement at the time of the sale.
When does an exemption clause not help the seller?
If the entitlement arises from his own act or he deliberately concealed it.
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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
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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.
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- 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
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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
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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.