Article 361 of the Saudi Civil Transactions Law
المادة 361 من نظام المعاملات المدنية · الفصل الثاني: عقد المقايضة
Article 361 defines exchange (muqayada) as a contract exchanging property for property by way of transfer of ownership, where neither side is cash.
Official text (Arabic)
This article has not been amended since the law was issued.
المقايضة عقد مبادلة مالٍ بمالٍ على سبيل التمليك ليس أي منهما نقدًا.
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 361 explained in plain English
This article sets the definition of the contract of exchange (muqayada) in the Civil Transactions Law, on which the remaining rules of this contract are built.
The definition rests on three elements:
- An exchange of property for property: each party gives something of value and takes in return something else of value.
- By way of transfer of ownership: each party transfers ownership of what he gives to the other, not merely temporary use of it.
- Neither consideration is cash: this is what distinguishes exchange from sale; if one of the two considerations is money, the contract is in principle a sale and not an exchange.
Article 362 clarifies the effect of this definition, as it treats each of the parties to the exchange as a seller of what he exchanged and a buyer of what he received in exchange. That is, an exchange is treated as two reciprocal sales in a single contract.
The definition matters in practice: knowing that a contract is an exchange determines the rules that govern it, such as how its costs are shared and how to deal with adding a sum of cash to make up a difference in value, matters regulated by other articles in this chapter.
If there is a dispute over how to characterize a particular contract, as an exchange or a sale, it is advisable to consult a lawyer specialized in civil cases.
Practical example
Khaled agreed with his neighbor in Dammam to give him his car in return for a fishing boat the neighbor owns, with neither paying any cash, and ownership of the car passing to the neighbor and ownership of the boat to Khaled. This contract is an exchange because it is an exchange of property for property by way of transfer of ownership, and neither consideration is cash.
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 361 of the Saudi Civil Transactions Law
What is exchange (muqayada) in the Civil Transactions Law?
It is a contract exchanging property for property by way of transfer of ownership, on condition that neither consideration is cash.
What is the difference between exchange and sale?
In an exchange neither consideration is cash; if one is money, the contract is no longer an exchange under this definition.
Does ownership pass in an exchange?
Yes. The article provides that the exchange is by way of transfer of ownership, so each party owns what he took.
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.