Article 21 of the Saudi Emergency Law

This article deals with a question of great concern to individuals and companies: what happens to contracts and obligations that cannot be performed because of the state of emergency?

What the article provides: where required, rules or controls are issued by emergency orders for one of two purposes:

• To address the effect of inability to perform contracts and other obligations while the state of emergency is in force.
• To limit the negative effects arising from the state of emergency or from applying the provisions of the Law.

What the article does not provide: the article does not itself set a direct rule for contracts. It does not say that contracts are terminated, suspended or amended, and does not say who bears the loss. It leaves that to the rules or controls issued by emergency orders. The outcome in each case therefore depends on what those rules contain, if they are issued.

The phrase «where required» means that these rules are not issued automatically with every state of emergency, but when the need arises. Under Article 12, emergency orders have the force of law, so these rules will bind the parties once issued.

This is linked to Article 9, which provides that the mere declaration of a state of emergency creates no right for any person against any other person except what is stated in the Law or in the declaration. Invoking the declaration alone is therefore not enough to escape an obligation; one must refer to the rules that are issued.

Anyone who faces an inability to perform a contract because of a state of emergency can consult a lawyer who specializes in commercial and corporate cases or in civil cases.