Article 45 of the Saudi Civil Transactions Law

المادة 45 من نظام المعاملات المدنية · الفرع الأول: أركان العقد أولًا: الرضى

A framework agreement is a contract in which the parties set the basic terms of the contracts they create between them under its provisions, and it is treated as part of those contracts.

Official text (Arabic)

This article has not been amended since the law was issued.

الاتفاق الإطاري عقدٌ يُحدد المتعاقدان بمقتضاه البنود الأساسية التي تخضع لها العقود التي ينشئها المتعاقدان بينهما وفقًا لأحكام هذا الاتفاق، ويُعد ذلك الاتفاق جزءًا من العقود المبرمة بينهما.

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 45 explained in plain English

This article defines the framework agreement, which is particularly useful when the parties expect to conclude multiple contracts between them.

According to the article, a framework agreement:

is a contract between the contracting parties.
is one in which the contracting parties set the basic terms governing the contracts they create between them under its provisions.
is treated as part of the contracts concluded between them, so its terms apply to those contracts as part of them.

The practical benefit is that the parties set the basic rules of their dealings once, and later contracts are then concluded under the provisions of this agreement. These terms might include, for example, the pricing method, delivery dates or payment terms, depending on what the parties agree.

The article does not state the rule where a framework agreement conflicts with the terms of a later contract, and does not regulate the duration of the agreement or its termination.

This article is close in effect to Article 46, which provides that if the contracting parties, expressly or impliedly, refer in the contract to the provisions of a model document, specified rules or any other document, it is treated as part of the contract. In both cases, what appears outside the text of the contract becomes part of it. Article 44, by contrast, deals with a different subject: the rules on earnest money.

If you are preparing a framework agreement for ongoing dealings, consult a lawyer who specializes in commercial and corporate cases.

Practical example

A contracting firm in Dammam signed a framework agreement with a steel supplier that sets the pricing method, delivery dates and payment terms, and then began concluding separate purchase contracts with it throughout the year. Each purchase is subject to the basic terms in the framework agreement, and the agreement is treated as part of it.

Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.

How we write and review content

A question about Article 45 of Civil Transactions Law?

Describe what happened and specialist lawyers answer. You can write in English.