Article 1 of the Saudi Law on Security Rights in Movable Assets

This article gives the meanings of the words that recur in the Law, and understanding them is a precondition for understanding the other articles. The most important are:

• Security right: a real right over collateral that is provided, or agreed to be provided, to secure performance of an obligation.
• Collateral: a movable asset that is provided, or agreed to be provided, to secure performance of an obligation.
• Secured obligation: the obligation for which the collateral was provided. It includes a monetary obligation, whether in cash or not in cash, an obligation to do or refrain from doing something, and present and future obligations, whether fixed or conditional.
• Secured party: the natural or legal person in whose favor the security right was granted, usually the creditor.
• Grantor: the person who grants the security right. The secured debtor is the person who owes the secured obligation if he is not the grantor.
• Receivable ("debit account"): an unsecured monetary right of the debtor against a third party, whether due now or deferred.
• Security by assignment of a right: an agreement under which a person provides his rights against third parties as security for his debt to the creditor.
• The Registry: the unified registry of rights over movable assets, and registration is entering the security right and anything that changes it in the Registry.
• Inventory: goods held for sale or lease, and raw materials and materials in the process of manufacture or conversion.
• Real estate by designation: a movable that its owner places in real estate he owns to serve the real estate or its exploitation permanently, even if it is not attached to the real estate in a fixed manner. This definition was amended by Royal Decree No. (M/191) dated 29/11/1444 AH.
• Proceeds: the income or in-kind or cash substitute obtained from disposing of the collateral, benefiting from it or replacing it, including its products and growth and compensation for loss of its value or damage to it, and it does not include the proceeds of enforcement against it under the provisions of the Law.

The article also specifies that the Ministry is the Ministry of Commerce and the Minister is the Minister of Commerce. It is followed by Article 2, which sets out the contracts and transactions to which the Law applies.