Article 2 of the Saudi Commercial Papers Law
المادة 2 من نظام الأوراق التجارية · الفصل الأول: إنشاء الكمبيالة
An instrument lacking the particulars of Article 1 is not a bill of exchange, except where the due date, place of payment, drawee's domicile or place of issue is missing, each of which has a substitute rule.
Official text (Arabic)
This article has not been amended since the law was issued.
لا يعتبر الصك الخالي من البيانات المذكورة في المادة السابقة كمبيالة إلا في الأحوال الآتية:
أ - إذا خلت الكمبيالة من بيان ميعاد الاستحقاق، اعتبرت مستحقة الوفاء لدى الاطلاع عليها.
ب - وإذا خلت من بيان مكان الوفاء أو من بيان موطن المسحوب عليه اعتبر المكان المبين بجانب اسم المسحوب عليه مكان وفائها وموطنا للمسحوب عليه.
ج - وإذا خلت من بيان مكان إنشائها، اعتبرت منشأة في المكان المبين بجانب اسم الساحب.
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 2 explained in plain English
This article complements Article 1, which listed the particulars that must appear in a bill of exchange. The rule here is that an instrument lacking those particulars is not considered a bill of exchange, but the article excepts three cases and provides for each a solution that fills the gap:
- Absence of the due date: the bill is considered payable at sight, that is, when it is presented to the drawee.
- Absence of the place of payment or the drawee's domicile: the place written beside the drawee's name is considered the place of payment and the drawee's domicile.
- Absence of the place of issue: the bill is considered issued at the place written beside the drawer's name.
As for the other particulars in Article 1, such as the word "bill of exchange", the amount, the name of the drawee or the drawer's signature, the article provides no substitute for their absence, so the rule remains that an instrument lacking them is not considered a bill of exchange.
This article helps those who deal in bills of exchange to know what can be remedied and what cannot. It does not specify the legal effect of an instrument that is not a bill of exchange, so anyone who has an instrument with missing particulars and wants to know their position should consult a lawyer specializing in commercial matters and commercial papers.
Practical example
An establishment in Dammam received a bill of exchange from one of its customers containing all the particulars except the due date. Under Article 2 the paper remains a bill of exchange and is considered payable at sight, so the establishment may present it to the drawee and demand payment when it is presented.
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 2 of the Saudi Commercial Papers Law
Is a bill of exchange void if no due date is written on it?
It does not lose its character because of that, and it is considered payable at sight.
What is the rule if the place of payment is not stated in the bill?
The place shown beside the drawee's name is considered the place of payment and the drawee's domicile.
Is an instrument a bill of exchange if the drawer has not signed it?
Article 2 gives no substitute rule for a missing signature, so the rule remains that an instrument lacking the particulars of Article 1 is not considered a bill of exchange.
Articles this article refers to
More articles on Bill of Exchange
- Article 1
The article sets out the eight particulars a bill of exchange must contain, including the word "bill of exchange", the amount, the name of the drawee, the due date and the drawer's signature.
تشتمل الكمبيالة على البيانات الآتية: أ - كلمة (كمبيالة) مكتوبة في متن الصك وباللغة التي كتب بها. ب - أمر غير معلق على شرط بوفاء مبلغ معين من النقود. ج - اسم من
- Article 3
The article permits three ways of drawing a bill of exchange: to the drawer's own order, on the drawer himself, or for the account of another person.
يجوز سحب الكمبيالة لأمر الساحب نفسه، ويجوز سحبها على ساحبها، ويجوز سحبها لحساب شخص آخر.
- Article 4
The article permits stipulating that a bill of exchange be paid at the domicile of a person other than the drawee, whether in the drawee's town or in another.
يجوز اشتراط وفاء الكمبيالة في موطن شخص آخر غير المسحوب عليه سواء كان هذا الموطن في الجهة التي فيها موطن المسحوب عليه أو في جهة أخرى.
- Article 5
If the amount of a bill written in words differs from the amount in figures, the words prevail; if the amount is written several times and differs, the smaller amount prevails.
إذا كتب مبلغ الكمبيالة بالحروف وبالأرقام معا فتكون العبرة عند الاختلاف بالمكتوب بالحروف، وإذا كتب المبلغ عدة مرات بالحروف أو بالأرقام فتكون العبرة عند الاختلاف
- Article 6
Article 6 provides that any stipulation of interest on the amount of a bill of exchange is treated as if it had not been written.
اشتراط فائدة الكمبيالة يعتبر كأن لم يكن.
- Article 7
Article 7 determines the capacity of a person bound by a bill of exchange under the law of their domicile, requires a Saudi to be 18, and upholds the obligation of a person lacking capacity who signs in a country that treats them as fully capable.
تتحدد أهلية الملتزم بالكمبيالة وفقًا لنظام موطنه، ومع ذلك لا يعتبر السعودي أهلا للالتزام بالكمبيالة إلا إذا بلغ من العمر ثماني عشرة سنة. وإذا كان الشخص ناقص الأ
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.