The Saudi Civil Transactions Law (Royal Decree No. M/191), issued on June 18, 2023, and effective since December 16, 2023, introduces a codified legal framework governing civil and commercial transactions in Saudi Arabia. It contains 721 articles covering key areas such as:

• Formation, execution, and termination of contracts.

• Tort claims and compensation.

• Specific contracts including sales, leases, agency, and construction contracts (muqawala).

• Ownership rights, property rights including usufructs and easements.

• Legal remedies expanding beyond traditional Islamic Sharia remedies, including damages for indirect losses like future profits or reputation.

The law maintains the primacy of Sharia, stating that where a provision is not available in the law, Sharia principles most consistent with the law will apply. This law aims to enhance transparency, legal certainty, and timely justice in civil transactions, aligning Saudi law more closely with international standards while preserving Islamic legal principles.

This legislative reform is a cornerstone of Saudi Arabia’s Vision 2030 economic diversification plan and creates a modern legal environment for contracts and property rights in the Kingdom.