Article 495 of the Saudi Civil Transactions Law
المادة 495 من نظام المعاملات المدنية · الفرع الثاني: التزامات الوكيل
The article bars a selling agent from buying for himself what he was authorized to sell, or selling it to his relatives or to anyone dealing with whom benefits him, except with his principal's permission.
Official text (Arabic)
This article has not been amended since the law was issued.
1- لا يجوز للوكيل في البيع أن يشتري لنفسه ما وكل في بيعه إلا بإذن موكله.
2- لا يجوز للوكيل في البيع أن يبيع إلى أصوله أو فروعه أو زوجه أو إلى من كان التصرف معه يجر مغنمًا أو يدفع مغرمًا إلا بإذن موكله.
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 495 explained in plain English
This article bars a selling agent from entering into transactions in which his interest may conflict with his principal's, unless the principal gives permission. The prohibited cases include:
- The agent buying for himself what he was authorized to sell.
- Selling to his ascendants, such as parents.
- Selling to his descendants, such as children.
- Selling to his spouse.
- Selling to anyone dealing with whom would bring a benefit to the agent or spare him a loss, meaning it gives him an advantage or removes a harm from him.
The test in all of this is the principal's permission: if the principal knows and permits, the act is allowed. The reason is that an agent must seek the best deal for his principal, and may not do so if he or one of his relatives is the other party.
The article follows Article 494, which bars the agent from selling below the set price or the fair market price, and precedes Article 496, which bars him from selling at a deferred price except with express or implied permission. The article does not state the effect of breaching this prohibition. To assess that in a particular case, it is advisable to consult a lawyer specializing in civil matters.
Practical example
Noura appointed her cousin to sell land of hers in Abha. He wanted to sell it to his father. He may not do so without Noura's permission, and the same applies if he wanted to buy it for himself. If he informs her and she gives permission, the act is allowed.
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 495 of the Saudi Civil Transactions Law
May an agent buy for himself what he was authorized to sell?
Not except with his principal's permission.
May an agent sell his principal's property to his son or his wife?
He may not sell to his ascendants, descendants, or spouse except with the principal's permission.
What is meant by someone dealing with whom brings a benefit or spares a loss?
It is a person dealing with whom gives the agent a benefit or removes a harm from him, and the agent may not sell to that person without the principal's permission.
More articles on Agency Contract
- Article 87
The article permits contracting through representation unless statutory texts require otherwise, and divides representation into agreed, judicial and statutory.
1- يصح التعاقد بالنيابة؛ ما لم تقتض النصوص النظامية خلاف ذلك. 2- تكون النيابة في التعاقد اتفاقيةً أو قضائيةً أو نظاميةً.
- Article 88
The article prohibits a representative from exceeding the limits of his representation as set in the instrument creating it, whether a contract, a court judgment or a statutory text.
ليس للنائب أن يتجاوز حدود نيابته المعيَّنة في سند إنشائها، سواء أكان السند عقدًا أم حكمًا قضائيًّا أم نصًّا نظاميًّا.
- Article 90
If the representative contracts within the limits of his representation and in the principal's name, the rights and obligations arising from the contract are attributed to the principal.
إذا تعاقد النائب في حدود نيابته باسم الأصيل فإن ما ينشأ عن العقد من حقوقٍ والتزاماتٍ يُضاف إلى الأصيل.
- Article 152
The article provides that when the beneficiary approves what the volunteer agent did, the rules of agency apply to that work.
تسري أحكام الوكالة إذا أجاز المنتفع ما قام به الفضولي.
- Article 356
A representative may not buy for himself what he was entrusted to sell, even at auction or in another's name, without permission; the same applies to an intermediary, expert and the like.
مع مراعاة النصوص النظامية؛ ليس للنائب أن يشتري لنفسه باسمه أو اسم غيره ولو بطريق المزاد ما عهد إليه بيعه بمقتضى نيابته ما لم يكن مأذونًا له بذلك، كما لا يحق ذلك
- Article 357
A sale by a representative, intermediary or expert to himself does not take effect against the owner unless he approves it, while a good-faith specific successor who acquired a real right for consideration is protected.
إذا تمَّ البيع في الأحوال المنصوص عليها في المادة (السادسة والخمسين بعد الثلاثمائة) من هذا النظام، لم ينفذ في حق من تم لحسابه إلا إذا أجازه، وليس له أن يحتج بعد
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.