Article 18 of the Saudi Commercial Court Law
المادة 18 من النظام التجاري نظام المحكمة التجارية · الفصل الثالث: في الوكيل بالعمولة المعبر عنه بالقومسيون والأمناء المأمورين بنقل الأشياء برا وبحرا
The article defines the commission agent as a person who carries on trade on behalf of another, conducting his transactions in his own name or in the name of a company for the account of his principal.
Official text (Arabic)
This article has not been amended since the law was issued.
الوكيل بالعمولة هو الذي يتعاطى التجارة بالوصاية والنيابة ويجري معاملاته باسمه أو بعنوان شركة ما لحساب 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 18 explained in plain English
This article defines the commission agent, who is a person who carries on trade as a delegate and on behalf of another. The essential feature of this definition lies in the manner of dealing:
- The agent conducts his transactions in his own name or in the name of some company.
- But these transactions are for the account of his principal, meaning that their economic result goes to the principal.
The party dealing with the commission agent sees the agent's name or the company's name, while the real beneficiary of the deal is the principal. This is what distinguishes the commission agent: he contracts himself and in his own name, but for the account of another, so he appears to those who deal with him as a party to the transaction.
Article 19 builds on this definition an important right for the agent, which is his right to be paid first the amounts he spent on the goods sent to him for sale out of their value.
If you deal under a commission agency, whether as principal or agent, it is useful for the agreement to be written and clear, and to consult a lawyer who specializes in commercial cases in any dispute.
Practical example
A merchant in Abha sends honey products to an agent in Riyadh to sell. The agent sells the honey to shops in his own name, then transfers the price to the merchant after deducting what he is owed. This agent is a commission agent under this article.
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 18 of the Saudi Commercial Court Law
Who is a commission agent?
A person who carries on trade as a delegate and on behalf of another, and conducts his transactions in his own name or in the name of some company for the account of his principal.
In whose name does a commission agent deal?
In his own name or in the name of a company, but for the account of his principal.
May a commission agent deal in the name of a company?
Yes. The text says he conducts his transactions in his own name or in the name of some company for the account of his principal.
More articles on Commission Agent and Carriage of Goods
- Article 19
The article gives the commission agent the right to be paid first, out of the value of goods sent to him for sale, what he spent on them, subject to conditions regarding their whereabouts.
كل وكيل بعمولة له الحق أن يتقدم في استيفاء جميع ما صرفه على أمتعة مرسلة له من محل آخر برسم البيع لحساب موكله من نفس قيمتها إذا كانت موجودة لديه أو مودعة في مخزن
- Article 20
The article makes the agent liable for any damage if he transfers the carriage of goods to another without the original merchant's permission, and he is not liable if the transfer is by the merchant or with his permission.
إذا حول الوكيل أمر نقل البضاعة والأشياء المسلمة أو المرسلة له إلى غيره بغير إذن التاجر الأصلي يضمن كل ضرر يحصل بسبب ذلك. أما إذا كان التحويل إلى الوكيل الآخر من
- Article 21
The article requires every agent and trustee to record in the daybook the kind, quantity and prices of the goods ordered to be carried by land or sea.
يجب على كل وكيل وأمين أن يقيد بدفتر اليومية جنس ومقدار وأثمان البضائع المأمور بنقلها بحرا أو برا.
- Article 22
The article requires the agent and trustee to attach a consignment note to the goods when sending them, that is, a statement that meets the specified requirements.
يجب على الوكيل والأمين حين إرسال البضاعة أن يرفق بها قائمة الإرسالية ؛ أي كشفا مستوفيا للشرائط الآتية
- Article 23
The article sets the details that must appear in the consignment note, from the description of goods and the delivery time limit and the parties' names to the fee, compensation and signature.
يوضح في قائمة الإرسالية مقدار وجنس البضائع المنقولة ونوع الطرود ومهلة إيصالها مع بيان اسم وشهرة الوكيل والأمين المتعهد بنقلها والمكارى ، واسم وشهرة من تسلم إليه
- Article 24
The article binds the agent, trustee and carrier to ensure delivery of goods within the time limit set in the consignment note, and they are liable for damage from delay unless the obstacle was a force majeure.
تلزم الوكيل والأمين والمكارى ضمانة إيصال البضائع المسلمة إليه في داخل المهلة المعينة في قائمة الإرسالية فكل ضرر ينشأ من تأخيره يضمنه ما لم يكن المانع قاهرا يعجز
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.