Article 505 of the Saudi Civil Transactions Law
المادة 505 من نظام المعاملات المدنية · الفرع الرابع: انتهاء عقد الوكالة
The article regulates the agent's right to withdraw from the agency and its conditions, his duty to complete what he started, and compensation to the principal for unsuitable withdrawal in a paid agency.
Official text (Arabic)
This article has not been amended since the law was issued.
1- للوكيل أن يتخلى عن الوكالة إذا لم تتعلق بها مصلحة للغير بشرط إعلام موكله بتخليه عنها.
2- إذا تعلقت بالوكالة مصلحة للغير فلا يجوز للوكيل أن يتخلى عن الوكالة إلا إذا وجدت أسباب جدية تسوغ ذلك، على أن يعلم الغير بذلك ويمهله وقتًا كافيًا ليتخذ ما يراه مناسبًا لرعاية مصلحته.
3- يلتزم الوكيل في جميع الأحوال بمتابعة القيام بالأعمال التي بدأها حتى يبلغ مرحلة لا يخشى معها ضرر على الموكل، وإلا لزمه التعويض عن الضرر.
4- إذا كانت الوكالة بأجر وتخلّى الوكيل عن الوكالة في وقت غير مناسب أو بغير مسوغ مقبول، لزمه تعويض الموكل عن الضرر الذي يلحقه بسبب ذلك، ولو كان تخلّي الوكيل عن عمل لم يشرع فيه.
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 505 explained in plain English
This article mirrors the principal's right to dismiss, and regulates the agent's right to withdraw from the agency in four paragraphs:
- If no third party's interest is connected to the agency: The agent may withdraw from it, provided he notifies his principal of his withdrawal.
- If a third party's interest is connected to it: Withdrawal is not permitted unless there are serious reasons that justify it, and the agent must notify the third party and give him sufficient time to take whatever steps he sees fit to look after his interest.
- Completing what he started: In all cases the agent must continue the work he began until it reaches a stage at which no harm to the principal is feared, failing which he must pay compensation for the harm.
- Paid agency: If the agent withdraws at an unsuitable time or without an acceptable justification, he must compensate the principal for the harm he suffers as a result, even if the withdrawal was from work he had not begun.
Withdrawal is therefore a right, but one limited by the duty to notify, by the duty not to abandon work midway in a way that harms the principal, and by the duty not to harm him in a paid agency.
The article follows Article 504, which requires the principal to compensate a paid agent if he dismisses him at an unsuitable time or without an acceptable justification, so the two rules mirror each other. To assess the position in a particular withdrawal, it is advisable to consult a lawyer specializing in civil matters.
Practical example
A merchant in Jeddah appointed an agent, for a fee, to complete the clearance procedures for a shipment of goods. The agent began the work and then wanted to withdraw. He must notify the merchant and continue the procedures he began until they reach a stage at which no harm to the merchant is feared. If he withdraws at an unsuitable time or without an acceptable justification, he must compensate the merchant for the harm.
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 505 of the Saudi Civil Transactions Law
May an agent withdraw from the agency?
Yes, if no third party's interest is connected to it, provided he notifies his principal. If a third party's interest is connected, he may do so only for serious reasons, after notifying the third party and giving him sufficient time.
Must the agent finish work he has begun before withdrawing?
He must continue the work he began until it reaches a stage at which no harm to the principal is feared, otherwise he must pay compensation.
When does the agent compensate the principal for his withdrawal?
If the agency is paid and he withdraws at an unsuitable time or without an acceptable justification, even if the withdrawal was from work he had not begun, and also if he leaves work he began before it reaches a stage at which no harm to the principal is feared.
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.