Sources reviewed
The Saudi legal rule
An exceptional general event unforeseeable at contracting must make performance onerous enough to threaten grave loss. The debtor may promptly seek negotiation but must continue performance. Absent agreement within a reasonable period, a court may adjust the onerous obligation to a reasonable level. [1]
What the records establish
Compare bid-date and post-event unit costs, stripping out initial pricing errors. Attach independent quotations and calculate projected loss on the remaining quantity. If the court appoints an expert, ask it to define the technical question in the order. The expert can isolate the event’s effect on remaining costs from losses already incurred. [4]
Likely defence and next step
The buyer may show that prices had risen before signature or alternatives remained available. Test both propositions and propose a time-limited adjustment with a mechanism for reverting to the original price.
Applicability on 2026-10-30
Published on 19 June 2023, the law took effect on 17 December 2023. [2][3] It applies to commercial transactions where compatible with their nature and no special commercial provision governs. For earlier events, check whether a party invokes a conflicting applicable provision or judicial principle, or a time bar had already begun to run before commencement. [2]
Sources
- نظام المعاملات المدنية | Saudi Civil Transactions Law 97
- مرسوم الإصدار ونفاذ النظام | Promulgation and commencement Royal Decree M/191, clauses V–VI; Civil Transactions Law, art. 721
- أم القرى | Official Gazette Cabinet Resolution 820, publication on 1444-12-01 AH
- نظام الإثبات | Evidence Law 110–111
Related guides
- What happens if only part of a supply obligation becomes impossible?
- How can a buyer prove actual delay costs?
- Is the full contractual delay sum recoverable?