Article 4 of the Saudi Finance Lease Law

In a finance lease the lessee often chooses the asset it needs, and the lessor then finances it. This article regulates this stage before the contract:

• The lessee's right to specify the description: before the contract is concluded, the lessee may specify the description of the asset it wants to lease directly with the supplier, producer or contractor.
• The lessee's responsibility: the lessee is responsible for the consequences of specifying the asset's description, so if it chooses specifications that do not suit its need, the consequence of that choice is on it.
• The limits of the lessor's commitment: if the descriptions were specified with the lessor's approval, they bind the lessor only within the limits of what it approved, and no more.

This means the lessee should check carefully the specifications it agrees with the supplier, producer or contractor, and know exactly which of them the lessor approved, because anything beyond that approval does not bind the lessor.

The article is linked to Article 3, which requires the contract to include data on the leased asset and its condition, and to Article 5, which regulates the lessee receiving the asset directly from the supplier, producer or contractor under the terms and descriptions set in the contract. It is useful to document approval of the descriptions in writing to avoid later disputes, and in a dispute you can consult a lawyer specializing in banking, finance and finance lease cases.