Article 38 of the Saudi Civil Transactions Law
المادة 38 من نظام المعاملات المدنية · الفرع الأول: أركان العقد أولًا: الرضى
A contract between parties present, including by direct means of communication, is concluded at the time and place the acceptance is issued, and between parties not present when the offeror learns of the acceptance, unless otherwise agreed.
Official text (Arabic)
This article has not been amended since the law was issued.
1- إذا كان المتعاقدان حاضرين في مكانٍ واحدٍ أو في مكانين مختلفين عبر وسائل الاتصال المباشرة؛ عُدَّ العقد قد تمَّ في الزمان والمكان اللذين صدر فيهما القبول؛ ما لم يُتفق على خلاف ذلك.
2- إذا كان المتعاقدان غائبين؛ عُدَّ العقد قد تمَّ في الزمان والمكان اللذين علم فيهما الموجب بالقبول؛ ما لم يُتفق على خلاف ذلك.
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 38 explained in plain English
This article determines when and where a contract is considered concluded, and distinguishes between two cases:
- Parties present: whether they are in one place, or in two different places communicating by direct means of communication. Here the contract is considered concluded at the time and place where the acceptance was issued.
- Parties not present: here the contract is considered concluded at the time and place where the offeror learned of the acceptance, not merely when the other party issued it.
In both cases the rule applies unless otherwise agreed; the parties may agree on a different time or place for the contract to be concluded.
Note that the article treats contracting parties who communicate by direct means of communication as being present together, even though they are in different places. The article does not list these means by name.
This article relates to Article 37, which provides that the silence of the person to whom an offer is addressed is not acceptance except in specified cases, and to Article 39, which provides that a contract in auctions is concluded only when the auction is awarded, without prejudice to statutory provisions.
If a dispute arises over when or where a contract was concluded, you can consult a lawyer who specializes in civil or commercial cases.
Practical example
The owner of a workshop in Riyadh negotiated with an equipment lessor in Medina over a video call, and during the call the lessor said: "I accept." The contract is considered concluded at the moment the acceptance was issued and in the place where it was issued. But if the workshop owner had sent his offer by mail and the lessor replied by mail as well, the contract is concluded only at the time and place the workshop owner learns of the acceptance, unless they agreed otherwise.
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 38 of the Saudi Civil Transactions Law
When is a contract concluded if the parties are in different cities?
If they communicate by direct means of communication, the contract is concluded at the time and place the acceptance is issued. If they are not present together, it is concluded at the time and place the offeror learns of the acceptance, unless otherwise agreed.
When is a contract concluded between parties who are not present?
At the time and place at which the offeror learned of the acceptance, unless otherwise agreed.
Can the parties agree on a different time or place for the contract to be concluded?
Yes. The rule in both cases applies unless the contracting parties agree otherwise.
More articles on Elements of the Contract
- Article 11
The article allows a chosen domicile to be adopted for a particular act, serving as the domicile for everything relating to it unless expressly limited, and requires writing to prove it.
1- يجوز اتخاذ موطنٍ مختارٍ لعملٍ معيَّن، ويكون هو الموطن لكل ما يتعلق بهذا العمل؛ ما لم يُشترط صراحةً قصر هذا الموطن على أعمالٍ دون أخرى. 2- لا يجوز إثبات وجود
- Article 30
The article provides that the rules of the contract chapter apply to named and unnamed contracts, without prejudice to the legal provisions that regulate contracts of a special nature.
تطبق الأحكام الواردة في هذا الفصل على العقود المسماة وغير المسماة، وذلك دون إخلال بالأحكام الواردة في النصوص النظامية التي تنظم عقودًا ذات طبيعة خاصة.
- Article 31
A contract arises when one party's offer is joined to the other's acceptance to produce a legal effect, subject to the particular forms the legal provisions set for the formation of certain contracts.
ينشأ العقد بارتباط الإيجاب بالقبول لإحداث أثر نظامي، مع مراعاة ما تقرره النصوص النظامية من أوضاعٍ معيّنةٍ لانعقاد العقد.
- Article 32
Consent in a contract is achieved when the wills of two or more contracting parties who have capacity to contract coincide and the will is expressed by what indicates it.
يتحقق الرضى إذا توافقت إرادتا متعاقدين (أو أكثر) لديهما أهلية التعاقد وعُبِّر عن الإرادة بما يدل عليها.
- Article 33
Offer and acceptance may be by anything that indicates the will: words, writing, an understood gesture or mutual exchange, explicit or implicit, unless the legal provisions, the agreement or the nature of the transaction require otherwise.
1- يكون الإيجاب والقبول بكل ما يدل على الإرادة. 2- يجوز أن يكون التعبير عن الإرادة باللفظ أو بالكتابة أو بالإشارة المفهومة أو بالمعاطاة، وأن يكون صريحًا أو ضمني
- Article 34
Displaying goods and services with their price stated is an offer, and an advertisement with the prevailing prices is not an offer, unless there are indications to the contrary in either case.
1- يعد عرض البضائع والخدمات مع بيان ثمنها إيجابًا، إلا إذا قامت دلائل تفيد خلاف ذلك. 2- لا يعدُّ الإعلان مع بيان الأسعار المتعامل بها إيجابًا، إلا إذا قامت دلائ
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.