Article 8 of the Saudi Commercial Papers Law

المادة 8 من نظام الأوراق التجارية · الفصل الأول: إنشاء الكمبيالة

Article 8 makes the obligations of non-merchant minors and persons with no capacity arising from their signatures on a bill of exchange void as to them only, and they may rely on this against every holder, even one in good faith.

Official text (Arabic)

This article has not been amended since the law was issued.

التزامات القصر الذين ليسوا تجارا والتزامات عديمي الأهلية، الناشئة عن توقيعاتهم على الكمبيالة تكون باطلة بالنسبة إليهم فقط، ويجوز لهم التمسك بهذا البطلان في مواجهة كل حامل للكمبيالة ولو كان حسن النية.

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 8 explained in plain English

This article protects two categories of people who sign a bill of exchange:

Minors who are not merchants.
Persons with no capacity.

Their obligations arising from signing the bill of exchange are void, but the invalidity applies as to them only, meaning it does not extend to the other signatories of the bill. They may rely on this invalidity against every holder of the bill of exchange, even if the holder is in good faith and unaware of their status.

This is an important exception, because the holder's good faith is not enough here to bind the minor or the person with no capacity. This rule is linked to Article 7, which sets the age of capacity for a Saudi at 18, and to Article 9, which provides that the obligations of the other signatories remain valid despite the presence of signatures that do not bind those who made them.

Note that, for minors, the article limits the protection to those who are not merchants. In practice, anyone who receives a bill of exchange should verify the capacity of its signatories. To assess your position in a particular case, you can consult a lawyer specializing in commercial cases and commercial papers.

Practical example

A minor who is not a merchant signed a bill of exchange as drawer, and the bill was then transferred by endorsement to Abdullah, who did not know the drawer's age. When a claim is made, the minor may rely on the invalidity of his obligation against Abdullah despite Abdullah's good faith, while the obligations of the other signatories remain valid.

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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