Article 50 of the Saudi Commercial Court Law
المادة 50 من النظام التجاري نظام المحكمة التجارية · الفصل السادس: في السفاتج ، سندات الحوالة المعبر عنها بالبوليسة والكمبيالة المتداولة بين التجار
The article prohibits making acceptance of a bill of exchange conditional, and permits limiting acceptance to an amount less than its value, in which case the holder must give notice of the remainder.
Official text (Arabic)
This article has not been amended since the law was issued.
لا يجوز تعليق قبول السفتجة على شرط ما، ولكن يجوز أن يكون القبول قاصرا على مقدار معين أقل من قيمة السفتجة وفي هذه الحالة يجب على الحامل أن يعمل الإخطار على الباقى .
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 50 explained in plain English
This article lays down two rulings on the content of acceptance:
First: conditional acceptance is prohibited. Acceptance of a bill of exchange may not be made conditional on any condition. The acceptor cannot say, for example: I accept if the goods reach me. The reason is that a bill of exchange is an instrument of payment in which the obligation must be clear, and under Article 49 acceptance must be written in explicit wording.
Second: partial acceptance is permitted. Acceptance may be limited to a specific amount less than the value of the bill. In that case:
- The acceptor is bound for the amount accepted.
- The holder must give notice of the remainder, that is, the amount not accepted.
The difference between the two cases: a condition makes the obligation itself contingent and uncertain, and it is prohibited, whereas fixing a lesser amount is a certain obligation within that amount, and it is permitted.
Article 51 provides after it that the drawer of the bill and the endorsers who transferred it are jointly liable for acceptance and for payment at its due date. The holder therefore takes care to record the non-acceptance of the remaining part. The article does not specify a time limit for this notice. Given the precision of these procedures, it is advisable to consult a lawyer specializing in commercial paper.
Practical example
A bill of exchange for SAR 100,000 was presented to a merchant in Dammam, and he accepted it only up to SAR 60,000. Partial acceptance is permitted under this article, and the holder of the bill must give notice of the remaining SAR 40,000.
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 50 of the Saudi Commercial Court Law
May a bill of exchange be accepted on a condition?
No. Acceptance of a bill of exchange may not be made conditional on any condition.
May part of the value of a bill of exchange be accepted?
Yes. Acceptance may be limited to a specific amount less than its value.
What does the holder do in case of partial acceptance?
The holder must give notice of the remainder that was not accepted.
More articles on The Draft and Bill of Exchange and Acceptance
- Article 42
The article sets the details required in a bill of exchange (safta): date, amount, drawee's name, date and place of payment, reason for the value and its receipt, and drawer's signature, and the rule for multiple copies.
سندات الحوالة أي السفاتج التي تسحب من محل على آخر يجب أن تؤرخ ويوضح فيها المبالغ المحولة واسم الشخص المحال عليه وتاريخ ومكان الدفع ويبين فيها أنها قيمة بضاعة أو
- Article 43
The article allows a bill of exchange to be drawn on one person with a condition that it be paid at the place of another person, and also allows it to be drawn at the order of a person on his account.
يجوز أن تسحب السفاتج على شخص ويشترط فيها الدفع في محل شخص آخر كما يجوز سحبها بأمر شخص على ذمته
- Article 44
The article provides that bills of exchange drawn contrary to the preceding conditions are considered only ordinary instruments.
السفاتج المحررة على خلاف الشروط الآنفة الذكر لا تعتبر إلا كسندات عادية .
- Article 45
The article requires that, when the payment date falls due, the drawee owe the transferor or the person who ordered the drawing an amount not less than the value of the bill.
عند حلول أجل دفع قيمة السفاتج يجب أن يكون في ذمة المحال عليه للمحيل أو للآمر بالسحب مبلغ لا يقل عن قيمة السفتجة .
- Article 46
The article makes acceptance sufficient proof that the acceptor owes the funds covering payment, and requires the drawer to prove the existence of the cover if it is denied, failing which the drawer guarantees the bill's value to the holder.
الشرح على السفتجة بالقبول دليل كاف على أن القابل مدين للساحب أو الآمر بالسحب بما يقابل الوفاء وعلى الساحب وحده أن يثبت في حالة الإنكار أو الامتناع عن الدفع بعد
- Article 47
The article regulates the holder's right to the cover for payment when the drawer goes bankrupt after acceptance, and when the drawee goes bankrupt after accepting, depending on the nature of the cover.
إذا أفلس الساحب بعد قبول المحال عليه ولو قبل حلول أجل الدفع فلحامل السفتجة دون غيره من غرماء الساحب الحق في استلام مقابل الوفاء الذي عند المسحوب عليه وإذا أفلس
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.