Article 3 of the Saudi Finance Lease Law

This article sets the form a finance lease contract between the lessor and lessee must take, and contains three provisions:

1. Writing is required: the contract must be drawn up in writing or electronically; the article expressly accepts an electronic contract.
2. Required data: the contract must include data on the contracting parties, the leased asset, its condition, the rent, the dates for paying it, the term of the contract, and its terms.
3. Registration: the contract is later recorded in the register of contracts under the Law's provisions, and any amendment to it is attached to its record.

These data matter in practice: stating the condition of the asset helps when the contract ends or if there is a dispute over what the lessee received, and stating the rent and its dates sets the payment obligations clearly. The register of contracts is defined in Article 1 as the register in which finance lease contracts concluded in or performed in the Kingdom, the sale contracts resulting from them, and any amendment to them are recorded.

This article is linked to Article 2, which makes the passing of ownership of the asset to the lessee depend on the provisions of the contract, and to Article 4, which allows the lessee to specify the asset's description with the supplier, producer or contractor before the contract is concluded. So before signing, the lessee would do well to check that the contract includes this data in full. If there is a dispute over drafting or registering the contract, you can consult a lawyer specializing in banking, finance and finance lease cases.