Article 39 of the Saudi Civil Transactions Law
المادة 39 من نظام المعاملات المدنية · الفرع الأول: أركان العقد أولًا: الرضى
A contract in auctions is concluded only when the auction is awarded; a bid lapses when a higher bid is made, even if void, or when the auction closes without being awarded, without prejudice to statutory provisions.
Official text (Arabic)
This article has not been amended since the law was issued.
دون إخلال بالنصوص النظامية؛ لا يتم العقد في المزايدات إلا برسو المزايدة، ويسقط العطاء بعطاء يزيد عليه ولو وقع باطلًا، أو بإقفال المزايدة دون رسوّها على أحد.
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 39 explained in plain English
This article regulates the conclusion of a contract in auctions, in which participants compete by submitting bids. It lays down three rules:
- The contract is concluded only when the auction is awarded: merely submitting a bid does not conclude the contract.
- A bid lapses when a higher bid is made: if a higher bid is submitted, the earlier bid lapses, even if the higher bid is void. The earlier bid does not revive merely because the bid that exceeded it was void.
- A bid lapses when the auction closes without being awarded to anyone: if the auction is closed and is not awarded to any participant, the bid lapses.
The article begins with the phrase "without prejudice to statutory provisions", meaning these rules do not affect what other statutory provisions on auctions provide. The article does not detail or name those provisions.
This article relates to Article 38, which determines the time and place a contract is concluded between parties present and not present, and to Article 40, which provides that acceptance in adhesion contracts is limited to mere submission to fixed terms set by the offeror that are not open to discussion.
If you have a dispute over an auction you took part in, consult a lawyer who specializes in civil or commercial cases.
Practical example
Majed took part in a car auction in Riyadh and submitted a bid of SAR 60,000, then another participant bid SAR 62,000. Majed's bid lapsed with the higher bid, and even if the higher bid is later found to be void, Majed's bid does not revive. No contract is concluded with any participant until the auction is awarded.
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 39 of the Saudi Civil Transactions Law
When is a sale concluded at an auction?
A contract in auctions is concluded only when the auction is awarded, without prejudice to statutory provisions.
Does my bid remain valid if the higher bid is void?
No. The article provides that a bid lapses when a higher bid is made, even if that bid is void.
What happens to a bid if the auction closes without a sale?
The bid lapses when the auction closes without being awarded to anyone.
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.