Article 346 of the Saudi Civil Transactions Law
المادة 346 من نظام المعاملات المدنية · الفرع الثاني: آثار عقد البيع أولًا: التزامات البائع
The seller may withhold the item until he receives the price due, even if the buyer provided a pledge or guarantee, and risk of loss then falls on the buyer; accepting deferral of the price ends the right.
Official text (Arabic)
This article has not been amended since the law was issued.
1- للبائع أن يحبس المبيع حتى يستوفي ما هو مستحق له من الثمن ولو قدم المشتري رهنًا أو كفالةً. وإذا هلك المبيع أو تلف في يد البائع وهو حابس له كانت تبعة ذلك على المشتري.
2- إذا قبل البائع تأجيل الثمن سقط حقه في حبس المبيع ولزمه تسليم المبيع للمشتري.
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 346 explained in plain English
This article gives the seller a means of protecting his right to the price, which is withholding the item sold, that is, refraining from delivering it until he receives what is due to him of the price.
Rules of withholding:
- The seller may withhold the item until he receives what is due to him of the price, even if the buyer provided a pledge or a guarantee; security provided by the buyer does not oblige the seller to deliver.
- If the item perishes or is damaged in the seller's hands while he is withholding it, the risk of that falls on the buyer.
Loss of the right of withholding: if the seller accepts deferral of the price, his right to withhold the item lapses and he must deliver it to the buyer. A person who agreed to delay receiving the price may not delay delivery.
This article is a practical application of Article 345, which provides that the buyer must pay the price before receiving the item unless otherwise agreed. Article 347 deals with the converse case: the buyer receives the item before paying the price that is due immediately; if that was with the seller's knowledge and he did not prevent it, it counts as permission to receive it, and if it was without his permission the seller may recover it.
Note that withholding relates to the price that is "due"; if the price has not become due under the agreement, there is no room for it. In a dispute over whether the price is due or over the risk of damage, it is advisable to consult a lawyer specialized in civil cases.
Practical example
A firm in Riyadh sold a printing machine to a small press, and the press did not pay the immediately due price but offered a guarantor instead. The firm may continue to withhold the machine until it receives the price despite the guarantee, and if the machine is damaged while with it during the withholding, the risk falls on the press. But had the firm accepted deferral of the price, it would have to deliver.
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 346 of the Saudi Civil Transactions Law
May the seller refuse to deliver the item until the price is paid?
Yes, he may withhold the item until he receives what is due to him of the price, even if the buyer provided a pledge or a guarantee.
Who bears damage to the item while the seller is withholding it?
The risk of loss or damage falls on the buyer if it occurs in the seller's hands while he is withholding it.
When does the seller lose his right to withhold the item?
If he accepts deferral of the price, in which case he must deliver the item to the buyer.
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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.