Article 496 of the Saudi Civil Transactions Law
المادة 496 من نظام المعاملات المدنية · الفرع الثاني: التزامات الوكيل
A selling agent may not sell at a deferred price except with express or implied permission, and if he sells on deferred terms he may take a pledge or a guarantor.
Official text (Arabic)
This article has not been amended since the law was issued.
1- ليس للوكيل في البيع أن يبيع مال موكله بثمن مؤجل إلا بإذن صريح أو ضمني.
2- إذا باع الوكيل مؤجَّلًا فله أن يأخذ رهنًا أو كفيلًا على المشتري بما باعه مؤجَّلًا وإن لم يفوضه الموكل في 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 496 explained in plain English
This article regulates a sale at a deferred price made through an agent, and sets out two rules:
- Prohibited by default unless permitted: A selling agent may not sell his principal's property at a deferred price unless the principal has allowed it. Permission may be express, such as where the agency states that selling on deferred terms is allowed, or implied, understood from the circumstances.
- Securing the deferred price: If the agent sells on deferred terms, he may take from the buyer a pledge or a guarantor for the deferred price, even if the principal did not expressly authorize him to do so.
The reasoning is that a deferred sale exposes the principal to the risk that the price is paid late or not at all, so the Law requires his permission. In return, the agent is given a means to protect the principal's right to the price without needing fresh authorization.
The article follows Article 495, which bars a selling agent from buying for himself or selling to the listed relatives except with his principal's permission, and precedes Article 497, which requires the agent to give his principal the necessary information and render an account of the agency.
The article does not state the consequence of a deferred sale made without permission. Anyone issuing an agency to sell is advised to state expressly whether a deferred sale is allowed, and to consult a lawyer specializing in civil matters where needed.
Practical example
Mishal appointed his friend to sell his car, and the agency expressly allowed sale by installments. The friend sold it to a buyer in Buraidah in installments and took a guarantor from him to secure payment. This is allowed, and he could take the guarantor even though the agency did not mention it.
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 496 of the Saudi Civil Transactions Law
May an agent sell in installments or on deferred terms?
Only with express or implied permission from the principal.
Is the agent entitled to take a pledge or guarantor from the buyer?
Yes, if he sells on deferred terms he may take a pledge or a guarantor for what he sold on deferred terms, even if the principal did not authorize him to.
Must permission for a deferred sale be written in the agency?
The article accepts express or implied 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.