Oman
Civil Transactions and Procedures
29
Oman Sultani Decree No. 29/2013
Issued on 06/05/2013
Corresponding to 25 Jumada Al-Thani 1434 H
Omani Civil Transactions Law
We, Qaboos Bin Said, Sultan of Oman,
After perusal of the Basic Statute of the State promulgated by Oman Sultani Decree No.
101/1996, and after referring to the Council of Oman,
And based on the public interest requirements,
Have decreed as follows:
Article 1
The provisions of Civil Transactions Law enclosed herewith shall be effective.
Article 2
This Decree shall be published in the Official Gazette and enter into effect three months
following its publication date.
Issued on: 25 Jumada Al Thani 1434
AH
Corresponding to: 6 May 2013 AD
Qaboos bin Said
Sultan of Oman
The present Sultani Decree was published in the Official Gazette of the Sultanate of Oman
issue no.1012 dated 06/05/2013.
INTRODUCTORY TITLE
Chapter 1
General Provisions
Section 1
The Law
Article 1
The provisions of this Law shall apply to all matters dealt with by said provisions in letter
and context and not regulated by special laws. If there is no provision in the present law, the
court shall rule under the provisions of the Islamic Doctrine, if absent, then under the general
principles of the Islamic Shari’ah, or else according to custom.
Article 2
The understanding, interpretation, construal, and signification of the provision shall be
based on the rules and principles of the Islamic Doctrine.
Article 3
The present law shall not apply to past incidents unless an express provision in the
legislation provides otherwise.
Section 2
Application of the Law in terms of time
Article 4
Provisions of the present law may only be abrogated by virtue of a new legislation
providing expressly for such abrogation or which conflicts with a previous provision in the
legislation or which regulates anew the subject which had previously been regulated by said
legislation.
Article 5
The time limits shall be calculated using the Lunar Calendar unless otherwise specified by
the law.
Article 6
1. The provisions in relation to legal capacity shall apply to all persons to whom the
requirements prescribed in said provisions apply.
2. Should the person be of full legal capacity under earlier provisions and then become
incapacitated or lack capacity under new provisions, such a matter shall not affect his
previous dispositions.
Article 7
1. The new provisions in relation to the statute of limitations shall have effect as of their
implementation as long as the period of limitation has not expired.
2. Old provisions shall have effect on matters related to the commencement of the period
of limitation, suspension and interruption of the period previous to the implementation
of the new provisions.
Article 8
1. Should the new provision specify a shorter period of limitation than what was previously
decided by the earlier provision, the new period shall have effect as of the date of
implementation of the new provision even if the statutory period had started before that time.
2. Should the remainder of the period provided for by the earlier law be shorter than the
totality of the period provided for by the new provision, the statute of limitation shall
terminate upon the expiry of said remaining period.
Article 9
Evidence shall be subject to the provisions applicable at the time of their preparation or the
time in which they were supposed to have been prepared.
2- Application of the Law in terms of space
Article 10
The Omani Law shall be the reference in the characterization of the relationships upon a
conflict of laws so as to determine the law to be applied.
Article 11
1. The law of the State to which a person belongs by nationality shall apply to their
civil status and legal capacity. Nevertheless, with respect to financial dispositions
concluded in the Sultanate of Oman, and which have effect therein, should one of
the two parties be a foreigner who lacks capacity, and where said lack of capacity
be attributable to a hidden reason not easily discovered by the other party, the
foreigner shall be considered in relation to the said disposition as having full legal
capacity.
2. The law of the State wherein the foreign juristic persons have their actual
headquarters shall apply to their legal system. Should they carry out any activity in
the Sultanate of Oman, the Omani Law shall be the applicable law.
Article 12
The law of each of the spouses at the time of marriage shall be referred to in determining
the substantive requirements for the validity of a marriage.
Article 13
1. The Law of the State to which the husband belongs to shall be applicable to the effects
which are regulated by the marriage contract, if the spouses' nationality be unified after
marriage, the law of their nationality shall be applicable to the effects of marriage.
2. The law of the State to which the husband belongs at the time of the divorce shall apply
to the divorce. In the cases of divorcement and rescission, the law of the State to which
the husband belongs at the time of filing the lawsuit shall be applicable.
Article 14
In the cases specified in the two previous Articles, should one of the spouses be Omani at
the time of marriage, the Omani law shall be applicable solely with the exception of legal
capacity requirements for marriage.
Article 15
Obligation of Support of relatives shall be governed by the law of the debtor thereof.
Article 16
The law of the person to be protected shall apply to the substantive issues related to legal
tutorship, custodianship, guardianship and other substantive regulations to safeguard
incapacitated persons or persons with diminished capacity as well as absentees and missing
persons.
Article 17
1. The law of the State to which the deceased person, the custodian, or the person who
issued the act at the time of his death, belongs to shall apply to the inheritance, will and
all dispositions considered to become effective only after the death.
2. The form of the will and all the acts considered to become effective only after the death
shall be governed by the Law of the State wherein said act was carried out.
Article 18
All the pecuniary rights present on the territory of the sultanate of Oman, belonging to the
foreigner with no heir shall devolve to the Sultanate.
Article 19
The possession, ownership and other rights in rem in relation to a real estate shall be
subject to the Law of the real estate location.
And as regards movable property, the law of the place in which said property is located at
the time in which the cause entailed the acquisition, or forfeiture of the possession, or
ownership, or other rights in rem shall be applicable.
Article 20
The contractual obligations shall be governed by the law of the State wherein the mutual
domicile of the two parties is located. Should the domicile differ, the law of the State wherein
the contract is concluded shall apply unless otherwise agreed upon by the two parties.
The law of the place in which the real estate is located shall apply to the contracts
concluded in relation to said real estate.
Article 21
Contracts between living persons shall be subject to the law of the State in which said
contracts were carried out. The parties may otherwise agree either expressly or impliedly.
Article 22
1. The law of the State wherein the act giving rise to an obligation has occurred shall
apply to non-contractual obligations.
2. The provisions of the previous paragraph with respect to the obligations arising from
the tort shall not apply to incidents occurring abroad while lawful in the Sultanate of
Oman; even if deemed unlawful in the State in which they have occurred.
Article 23
The law of the State wherein an action is brought forth or proceedings conducted shall
apply to the rules of jurisdiction and all proceedings.
Article 24
The provisions of the previous Articles shall not apply if inconsistent with any special law
or an international treaty applicable in the Sultanate of Oman.
Article 25
The principles of the private international law shall be adopted for all that is not
specifically provided for in the preceding articles involving conflict of laws.
Article 26
The Omani law shall apply in the case of statelessness and persons with multiple
nationalities.
Article 27
Should it be established according to the previous Articles that a foreign law is to be
applied; the internal provisions thereof shall apply except for those relating to the private
international law.
Article 28
The provisions of a foreign law specified by the previous Articles may not be apply if said
provisions be inconsistent with the Islamic Sharia or the public order or morals in the
Sultanate of Oman.
Chapter 2
Persons
Section 1
Physical Person
Article 29
The personality of a human being shall commence from birth alive and ends at his death.
The law shall determine the foetal rights.
Article 30
Birth and death shall be evidenced in the official records prepared for such purpose. Should
this evidence not be found or if it is established that the information listed therein is not valid,
the same may be proven by any other means of proof.
Article 31
Every person shall have a name and tribe, or title, or both; the tribe or title of a person shall
be passed on to his children.
Article 32
The provisions stated in special laws shall apply to the missing person, absentee and
foundling.
Article 33
The Omani nationality shall be regulated by a special law.
Article 34
The family of a person shall consist of his relatives. Persons of common ancestry shall be
considered relatives.
Article 35
1. Direct kinship is that between ascendants and descendants.
2. Indirect kinship (collateral kinship) is a relationship between persons of common
ancestry who are not ancestors or descendants of each other.
Article 36
In calculating the degree of direct lineal kinship, each descendant shall be considered a
degree when ascending to the ancestor, excluding said ancestor, and when calculating the
degree of indirect kinship (collateral) the degrees shall be counted by ascending from the
descendant to the common ancestor then descending therefrom to the other descendant; each
descendant except for the common ancestor shall be considered as one degree.
Article 37
1. A domicile is the place where a person habitually resides.
2. A person may have more than one domicile at the same time.
Article 38
The place where a person carries out a trade or profession shall be considered a domicile in
reference to the management of activities related to said trade or profession.
Article 39
The domicile of a minor, incapacitated, absentee or missing person shall be the domicile of
his legal representative.
The minor who has reached the age of fifteen years and the like, may have a special
domicile for his activities and acts which he is capable to perform according to the law.
Article 40
1. An elected domicile may be adopted for the execution of a certain legal act.
2. An elected domicile may only be evidenced by writing.
3. An elected domicile for the execution of a legal act shall be the domicile in reference to
said act unless said domicile is expressly restricted to some activities excluding others.
Article 41
Each person who reaches the age of majority fully having his mental faculties and is not
declared incapacitated shall be considered to be of full capacity to exercise his civil rights.
The age of eighteen years shall be the age of majority.
Article 42
1. Any person who lacks the use of reason due to minority, imbecility, or insanity shall
not be of full capacity to exercise his civil rights.
2. The age of reason shall be upon the completion of seven years.
Article 43
Whoever reaches the age of reason but is below the age of majority, and any person who
has reached the age of majority yet be a prodigal or an imbecile shall be considered as lacking
capacity in accordance with the law.
Article 44
Persons who are incapacitated or who lack capacity shall be subject to the provisions of
tutorship, custodianship, or guardianship in the conditions and in accordance with the rules of
the law depending on each case.
Article 45
No person may renounce his personal liberty or his legal capacity or modify the rules
relating thereof.
Article 46
Any person whose inherent rights to his personality were unlawfully infringed, may
demand cessation of such infringement, and shall be entitled to a compensation for the
damage sustained thereby.
Article 47
Any person whose right to the use of his name is disputed by a third party without
justification, or a person whose name is unlawfully used by a third party may demand
cessation of such infringement and shall be entitled to a compensation for the damage
sustained thereby.
Section 2
Juristic Person (Person De Jure)
Article 48
Juristic persons are:
1. The State and its administrative body in the conditions and situations specified by
law.
2. The public authorities and institutions granted juristic personality by law.
3. Endowments “Awqaf”.
4. Commercial and civil companies as specified by law.
5. Private establishments and associations established pursuant to the provisions of
the law.
6. Any group of persons or assets which are granted juristic personality by law.
Article 49
1. A juristic person shall enjoy all rights except for those inherent to the natural capacity
of a human being and within the limits specified by law; hence, he shall have:
a. Independent financial liability.
b. A legal capacity within the limits designated by its Articles of Association or set by
the law.
c. The right to litigate.
d. An independent domicile. Said domicile shall be the place wherein the
headquarters are situated. As for the companies the headquarters of which are
situated abroad yet having an activity in the Sultanate of Oman, their headquarters
shall be, according to the Omani law, the place wherein the local management is
situated.
2. The juristic person shall have a representative to express its will.
Chapter 3
Properties and Assets
Article 50
A property shall be any asset, benefit, or right of value.
Article 51
1. Anything that is not out-of-trade either by its nature or by law may be the subject of
pecuniary rights.
2. Properties that are out-of-trade by nature shall be those that may not be possessed by
any person. And properties that are out-of-trade by law shall be those not allowed
either by Sharia or law to be subject of pecuniary rights.
Article 52
1. Fungibles are those things of which each unit is identical in whole or in part, or is very
similar to every other unit, can be replaced by each other during a payment, and can
usually be estimated in dealings according to number, measure, gauge and weight.
2. Non-fungibles are those things where each unit is considerably different in qualities or
value, or is rarely found in the market.
Article 53
1. Consumable things are those things whose intended use consists of their consumption.
2. Durable things are those things that are fit for being used many times where the
substance shall remain the same.
Article 54
Anything that is fixed space and may not be moved without being damaged or altered in
form shall be an immovable property; all other things shall be considered movables.
Article 55
A movable to which its owner attaches an immovable property provided for its service and
utilization shall be referred to as a real estate by destination.
Article 56
1. The movable and immovable property of the State or public juristic persons, or those
that are dedicated to public benefit either in fact or under a law or a Sultani decree or a
decision from the minister responsible for financial affairs shall be considered a public
property based upon the proposal of the competent minister or upon fact.
2. In all cases, said property may not be subject to disposition, or be seized or owned by
prescription.
Article 57
Public property shall lose its public capacity by the termination of its allocation for public
benefit. Such allocation shall be terminated according to a decree, or a law, in fact, or by the
termination of the purpose for which such property was allocated to the public benefit.
Chapter 4
The Right
Section 1
Scope of Exercising a Right
Article 58
The public damage shall be averted by the private damage and the greater damage by the
lesser one.
Article 59
Whoever abuses his right shall be held liable for compensation; the abuse of right shall be
in the following instances:
1. Should the intent of infringement be available.
2. Should the intended benefit of the act be unlawful.
3. Should the benefit be not proportionate to the damage sustained by third parties.
4. Should it exceed the bounds of custom and habit.
Section 2
Kinds and Establishment of Rights
Article 60
A right may be personal, in rem or moral.
Article 61
A personal right is a legal relationship between a creditor and a debtor in which a creditor
in said relationship requires his debtor to transfer a right in rem or to perform or refrain from
an act.
Article 62
A right in rem is a direct power specified to a person by law over a certain property and
may be original or dependant.
Article 63
1. The original rights in rem are the right of ownership and the rights derived thereof in
addition to whatever is deemed the same by the provision of law.
2. Dependent rights in rem are the security mortgage, pledge and preferential rights.
Article 64
Moral rights shall be laid upon intangible property where the provisions of special laws
shall be followed.
Article 65
The rules and provisions prescribed in the special laws shall govern the rules and
procedures of evidence.
Book 1
Personal Obligations or Rights
Part 1
Sources of Obligation
Chapter 1
The Contract
Section 1
General Provisions
Article 66
A contract is a mutual assent and meeting of offer and acceptance in a manner to be proven
in the subject matter of the agreement.
Article 67
A contract may be carried out on any of the following:
1. Movable and immovable property to be acquired for consideration or without
consideration, to be retained as a deposit, or to be consumed by use on loan.
2. Benefits of property to be used whether for consideration or without consideration.
3. Certain act or service.
4. Any other thing not considered prohibited by Sharia or the provisions of the law.
Article 68
1. Nominate and innominate contracts shall be governed by the general rules comprised
in this Chapter.
2. The rules relating to particular civil contracts shall be governed by the special
provisions regulating said contracts as specified in this Law or in other laws.
Section 2
Elements and Terms of Contract
1- Conclusion of Contract
Article 69
1. A contract shall be concluded by the mere meeting of offer and acceptance taking into
account the provisions of the law in relation to certain situations for the conclusion of a
contract.
2. Offer and acceptance is any expression of will used in the conclusion of a contract,
whichever is uttered first shall be the offer and the second uttered shall be the
acceptance.
Article 70
The expression of a will may be oral, in writing, by a customary sign, or by the taking of a
stance whereby the circumstances of the case shall leave no doubt of the true intention
thereof.
Article 71
The offer and acceptance shall be made in the past tense as well as in the present tense or
the imperative should it immediately executable.
Article 72
The Future tense denoting a mere promise shall be used to conclude a contract as a binding
promise if so is intended by the contracting parties.
Article 73
1. The display of goods or services with a statement of their prices shall be considered an
offer.
2. Publication, publicity and lists of the current market prices as well as requests
addressed to the public shall not be considered an offer but an invitation to a contract
unless conclusive evidence be established that an offer is intended.
Article 74
1. No utterance shall be imputed to a silent person. Nevertheless, the silence of a person
to whom the offer is addressed shall be considered an acceptance if associated with
proof of consent.
2. Silence shall be considered a particular acceptance should there be an existing
transaction between the contracting parties based on the offer or should the addressed
offer be to the benefit of the addressee.
Article 75
Any discussion in the session of contract involving other than the intended subject matter
shall be considered a rejection of whatever was intended.
Should the contracting parties in an option contract following the last offer presented in the
contract meeting, declare any statement or commit any act implying the rejection thereof, said
offer shall be deemed extinguished. Any discussion in the session of contract involving other
than the intended subject matter shall be considered a rejection of whatever was intended.
Article 76
Reparation of an offer prior to any acceptance shall nullify the first offer and the latter offer
shall be the one to be considered.
Article 77
Should a period for acceptance be stated, the obligor shall commit to the offer until the
termination of said period.
Article 78
The acceptance must conform to the offer. If the acceptance modifies or restricts the offer,
said offer shall be considered rejected requiring a new acceptance.
Article 79
If the two parties agree to the essential elements of the contract and reserve some detailed
matters to be agreed upon later on, and where they do not stipulate that the contract shall not
be concluded upon non-agreement on said matters, the contract shall be considered
concluded. In case a dispute arises over the matters that are not agreed upon, the court shall
rule thereon in accordance with the nature of the transaction and the provisions of law and
custom.
Article 80
Should the contracting parties at the time of contract not be assembled in one meeting
“majlis”, the contract shall be considered to have been concluded at the place and time where
the obligor shall become aware of the acceptance unless otherwise provided by an agreement
or by a legal provision. It shall be assumed that the obligor has become aware of the
acceptance at the place and time where said acceptance has reached him unless evidence to
the contrary is provided.
Article 81
In reference to place, a contract by telephone or by any other similar method shall be
considered as if concluded between parties who are not assembled in one meeting, “majlis,”
at the time of contract. In reference to time, it shall be considered as if concluded between
parties present in the same meeting “majlis”.
Article 82
Auction contracts shall not be concluded unless by the knock-down of the auction. A bid
shall lapse by a higher bid even if the latter is deemed null and void, or by the closure of the
bidding with no successful bidder.
Article 83
Acceptance in adhesion contracts shall be inferred by the mere adherence to the standard
conditions set by the obligor and may not be negotiated.
Article 84
An earnest money deposit shall be considered proof that a contract has become conclusive
and irrevocable unless otherwise provided by an agreement or by custom.
2- Contracts concluded by An Agency
Article 85
1. A contract may be made in person or by an agent unless otherwise specified by the
law.
2. An agency to contract may be by agreement, legal, or judicial.
Article 86
A deed of agency shall state the limits of the contractual agency, and the law shall specify
the bounds of the legal and judicial agency.
Article 87
1. When a contract is concluded by way of agency, the person’s agent and not the
principal person shall be taken into account whether when examining the defects of
consent, the effect of knowledge of special circumstances, or the presumption of
knowledge thereof
2. If the agent acts on behalf of, and according to specific instructions issued by the
principal, said principal may not hold on to the ignorance of the agent of the
circumstances of which said principal was aware of, or which he should have known of
it.
Article 88
1. If an agent concludes a contract in the name of the principal within the limits of his
agency, the rights and obligations arising from said contract shall affect the principal.
2. Should an agent fail to disclose his capacity at the time of the conclusion of the
contract or should he conclude a contract in his personal name, the effects of the
contract shall only be held by him without the principal, be he either a creditor or a
debtor, unless the other party to the contract has knowledge of, or is assumed to have
known of, the existence of such agency, or he has the same regard for the contract
whether concluded with the principal or the agent.
Article 89
If an agent and the person with whom he has concluded a contract are both ignorant of the
termination of an agency at the time of the conclusion of the contract, the effect of the
contract concluded by the agent shall be extended to the principal or his successors.
Article 90
The agent may not conclude a contract with himself either for his own account or for the
account of a third person using his agency without a license from the principal. Nevertheless
the principle may, in case no license is established, authorize such contract except where
otherwise provided by the provisions of the law or commercial practice.
3- The Capacity to Contract
Article 91
Every person shall have the capacity to contract unless such capacity be withdrawn or
restricted ipso jure.
Article 92
The acts of a minor below the age of reason shall be absolutely null and void.
Article 93
The financial dispositions of a minor who is at the age of reason shall be considered valid
when said acts be of full benefit and shall be void should they be of full damage. Acts that
range between benefit and damage shall be considered valid and conditional upon the
authorization of the legal tutor, custodian, or the minor himself after he reaches the age of
majority.
Article 94
An authorized minor shall be deemed an adult at the age of majority in reference to the
authorized matters therefore.
Article 95
1. Should a person be deaf-mute, deaf-blind or blind-mute, and when the expression of
will is impossible to give because of said status, the court may appoint an assistant to
assist him in acts where his interest requires so.
2. Should the person to whom aid was decided to be given after registering the assistance
decision, act in any of the dispositions in which he decided to be assisted with, said
disposition shall be conditional upon the authorization of the assistant or the court.
Article 96
The acts issued by the legal tutors, custodians, and guardians shall be deemed valid within
the limits set by the law.
Article 97
Should a person who lacks capacity, resort to fraudulent means to conceal such lack of
capacity; he shall be liable to compensation for the damage sustained by the other party.
4- Vitiated Consent
a. Duress
Article 98
Duress is the illegal exercise of coercion against someone to compel him to act against his
will. It shall be by the use of threats to endanger life or limb, to inflict serious injury; by threat
to dignity and honor, or to inflict damage to property
Article 99
For duress to be determined it must be based on the consideration that the person
exercising duress must be capable to carry out his threats, and that the compelled have the
least doubt that such threats shall be carried out sooner or later should he refrain from acting
as he was coerced.
Article 100
The gender of the compelled person, his age, social and health condition, in addition to
whatever may affect the seriousness of the duress are taken into consideration in its
determination.
Article 101
A contract made by a person who is coerced into said contract shall not be executed unless
it has been affirmed by said person or his heirs after the duress has been withdrawn.
Article 102
If any of the spouses has been coerced by the other to act under duress against one’s will,
said act shall be null and void.
b. Fraud and Lesion
Article 103
Fraud is defined when one party deceives another party by fraudulent means whether by
word or action with intent to induce the other to enter into a contract that would not have been
concluded without them. Deliberate silence to conceal a matter that if known by the person
who is deceived, the contract would not have been concluded, shall be considered fraud.
Article 104
Fraud shall render the contract unenforceable, and shall give the victim of fraud the right to
rescind said contract.
Article 105
If the fraud was not issued by any of the parties, but the victim of fraud proves knowledge
of the fraud by the other party at the time of the contract, said contract may be rescinded by
the victim of fraud.
Article 106
1. Lesion is defined as the imbalance between the rights acquired by one party to a
contact and the obligations to be borne thereof.
2. Lesion may be minor or gross. A minor lesion shall be included under the estimation of
adjusters, while the gross lesion shall not be included thereunder.
Article 107
1. A rescission of contract merely because of gross lesion without fraud shall only be
allowed for property under seizure as well as to trust property and State property.
2. In commutative contracts, the other party may avoid an action for rescission should he
provide sufficient remedy as considered by the court to eliminate the lesion.
3. A contract made by way of public auction may not be challenged by lesion.
Article 108
1. The right of rescission for fraud or gross lesion shall lapse by the death of the victim of
fraud, he who has been deceived, or by the use or disposition of the object of contract
after the knowledge thereof. It shall also lapse by the loss or damage of the object of
the contract. The victim of fraud or he who has been deceived may have recourse to
compensation.
2. An action for rescission based on fraud shall not be heard after the lapse of one month
as of the knowledge of such a matter. An action for rescission based on gross lesion
shall not be heard after the lapse of one year from the date of contract.
Article 109
A mistake may only be considered as to what is comprised in the wording of the contract,
or evidenced by the circumstances and conditions or the nature of things or by custom.
Article 110
If a mistake occurred in the type of the contract, any of the requirements of the contract, or
the subject matter of the same; said contract shall be nullified.
Article 111
A contracting party may rescind the contract should a mistake occur in a matter of
substance such as a characteristic of the object, or the person of the other party or any of his
characteristics.
Article 112
A contracting party may rescind the contract should a mistake of law be established and
where the conditions of a mistake of fact are satisfied in accordance with the two Articles
(109) and (111) of the present Law unless otherwise specified by law.
Article 113
A material mistake in calculation or writing shall not affect the validity of the contract, but
it must be rectified.
Article 114
A mistaken person may not invoke error in a manner contrary to good faith.
5- Subject-matter and Cause of Contract
a- Subject matter of Contract
Article 115
Every contract must have a subject-matter pertaining to it.
Article 116
The subject-matter must be a matter to which the provisions of the contract can be applied,
possible, deliverable, and not prohibited by the Shari’ah or law, otherwise the contract shall
be deemed null and void.
Article 117
1. In commutative contracts, the object that is the subject matter of the contract must be
sufficiently definite.
2. If said object that is the subject matter of the contract is known by the two parties, there
shall be no need for describing or defining it in any other manner unless it changed.
3. If the object is not designated in the previous manner, the contract shall be deemed null
and void.
Article 118
1. A future object may be the subject-matter of a contract should it be sufficiently
designated and without fraud.
2. Dealing in the estate of a living person shall be deemed null and void even if done with
his consent.
Article 119
Should the disposition of the subject-matter or its consideration be a sum of money, it is
required to state its amount and kind without any effect to the increase or decrease in the
value of said money at the time of payment.
Article 120
It is allowed to stipulate a condition in the contract that confirms, adapts its content or is
applied by custom. It is also allowed to stipulate a condition that is beneficial to one of the
contracting parties or to others unless it is prohibited by the Shari’ah or law. In this case, the
condition shall be nullified and the contract deemed valid, unless such condition be the
motive for the contract, whereby said contract shall also be nullified.
b- Cause of Contract
Article 121
If a contract is without cause, or the cause of which is contrary to the Islamic Shari’ah or
public order or public morals, it shall be void.
Article 122
A contract shall be valid only if it comprises legitimate benefit to the parties. Such
legitimate benefit shall be presumed existing in the contracts unless otherwise established.
6- Valid, defective and Void Contract
a- The Valid Contract
Article 123
A valid contract is a lawful contract in substance and description made by a person of
capacity and legal capacity, in addition to having a subject matter under its provisions,
satisfying all the requirements of validity specified by law, and not associated with any
defective condition.
b- The Defective Contract
Article 124
A defective contract is a lawful contract in substance but not in description. If the
defective cause is withdrawn, it shall become valid. The ownership of the object of the
contract shall not be effective except upon receipt. Any of the parties to the contract or their
heirs shall be entitled to the right of rescission after a notice to the other contracting party.
Such contract shall not give any effect unless within the limits specified by law.
c- The Void Contract
Article 125
1. A void contract is an unlawful contract in substance and description wherein one
element or subject-matter or its form as prescribed by law for the conclusion thereof is
defective.
2. An action in nullity shall not be heard after the lapse of fifteen years from the date of
the conclusion of the contract.
3. A void contract shall not have any effects and may not be affirmed. Every concerned
party may invoke the nullity, and the court may decide such a matter on its own
initiative,.
Article 126
If a contract is partially void, the contract as a whole shall be rendered void unless the
share of each part is specified, accordingly the void part shall be annulled and the rest shall
remain valid.
Article 127
If the contract is deemed null and void, and should the elements of another contract be
satisfied therein, said contract shall be considered valid and shall be considered as the contract
of which elements are satisfied if it is indicated that the intent of the parties was intended to
such contract.
7- The Suspended Contract and Non-Binding Contract
a- The Suspended Contract
Article 128
1. A suspended contract is a contract where any of the conditions of effectiveness is not
satisfied.
2. A contract shall only become effective upon ratification by the person who owns such
right.
Article 129
Ratification shall be by word or act whether expressly or implied; silence shall be
considered ratification if such a matter is provided by custom.
Article 130
It is a condition for the validity of the ratification that the contract must have been able to
be affirmed at the time of its conclusion and its ratification, the presence of the person who
has the right to render said affirmation, as well as the parties to the contract, the object of the
contract, and a substitute of the same if it is in kind.
Article 131
A ratification of a suspended contract shall render said contract effective from the time of
its issuance; if the ratification is rejected by the person who owns such a right, the contract
shall be deemed void.
Article 132
Should a contract be partially suspended, yet ratified, the contract as a whole shall be
executed. But if the suspended part only is not ratified, it shall only be void as to its share of
consideration, and shall remain valid in the other share.
b- The Non-binding contract
Article 133
A contract shall not be binding to one or both of the contracting parties despite of its
validity and effectiveness should a condition be stipulated for the right of rescission without
mutual consent or legal action. Each party shall have the right to rescind the contract
unilaterally when said contract be not binding upon him by its nature or if he entered a
condition in his favor giving him the option to rescind it.
8- Options that impair the obligatory force of a Contract
a- Option of Condition
Article 134
In binding financial contracts that are liable to be rescinded, any or both of the contracting
parties may enter a condition that gives them the option of a condition in their favor or in
favor of third parties within a period of time to be agreed upon between said parties. Should
they fail to agree on said period, the court may determine it in accordance with the custom or
the conditions of contracting.
The condition may be stated in the contract or in a subsequent agreement between the
contracting parties.
Article 135
If each of the two contracting parties in commutative contracts reserves the option of
condition, the consideration on both sides shall remain in their ownership, but if only one
party reserves the option of condition, his property shall not be removed from his ownership
neither shall the property of the other party be entered into his ownership.
Article 136
1. The party having the option of condition shall have the right to rescind or ratify the
contract. If he chooses to ratify the contract, then the contract shall be deemed binding
from the time of its conclusion, yet if he chooses to rescind it, said contract shall be
considered void ab initio.
2. Should the option be reserved to both parties, and one of them chooses to rescind the
contract, said contract shall be rescinded even if has been affirmed by the other
contracting party, yet if he chooses to ratify it, the other party shall retain his option to
rescind throughout the period of option.
Article 137
Rescission or ratification shall be by any act or word whether expressly or implied. If the
period has lapsed without selecting either the rescission or the ratification, the contract shall
be deemed binding.
Article 138
It is a condition for the validity of the rescission that it be selected within the period of
option and the knowledge of the other party of said matter in the case where the rescission is
effected by words and not conditional upon mutual consent or legal action. Yet, in reference
to the ratification, it is not required that the other party be aware of it.
Article 139
The option of condition shall not lapse by the death of the party who has made said
condition and it shall be transferred to his heirs.
b- Option to inspect
Article 140
The option to inspect shall be evidenced in contracts that are liable to rescission in favor of
the person to whom an act is made even if no condition in this regard is made by him if he
had not seen the specified object of the contract. The option shall be retained until an
inspection is made within the period agreed upon or until no reason for abatement be
established.
Article 141
The option to inspect shall not prevent the effectiveness of the contract yet it shall not
become binding upon the person to whom the option is granted.
Article 142
The option to inspect shall not lapse by waiver before the inspection is carried out. In
addition, it shall lapse upon the inspection of the object of contract and acceptance thereof
whether expressly or implied. And it shall likewise lapse after ascertainment of the loss or
deterioration of the object of the contract in whole or in part and by the disposition of the
object of a contract that may not be rescinded and which is made by the person to whom the
option is granted or by a disposition which gives a right to third parties.
Article 143
The option to inspect shall not lapse by the death of the person to whom the option is
granted and shall be transferred to his heirs.
Article 144
Rescission under the option to inspect shall be by any act expressly or implied provided
that the other party is aware of it.
c- Option to designate
Article 145
The subject-matter of the contract may be one of several things should a condition be made
to one of the parties of the contract to have an option to designate such a thing on the
condition that the consideration for each is stated there.
Article 146
Should the contracting parties fail to determine the period of option, or should the period
specified for one of them have expired without determination, the other contracting party may
request the court to determine the period of option or the subject-matter of the disposition.
Article 147
1. The contract shall not be binding upon the person to whom the right of option is
granted until said right is exercised. Should the option be carried out whether expressly
or implied, the contract shall become binding to the extent performed thereof.
2. The exercise of the option to designate shall be related back to the time of the
conclusion of the contract.
Article 148
The option to designate shall not lapse by the death of the person to whom the option is
granted, and shall be transferred to his heirs.
d- Defect Option
Article 149
The defect option shall be evidenced in the commutative contracts even if not stipulated in
the contract. The defect for which the option is granted must be present in the object of the
contract before the contract is made, shall affect its value or result in the loss of the purpose of
the contracting party thereof and be hidden.
Article 150
The person to whom the defect option is granted shall have the right to request the
rescission of the contract by returning the object of the contract back and recovering any
payment made thereof unless he refrains from returning it or upon the loss of the object of the
contract according to Article 151 of the present Law.
Article 151
1. The object of the contract shall not be returned and the person to whom the defect
option is granted shall have recourse to a decrease in value due to said defect should
the decrease in the object of the contract have occurred after the receipt or prior to the
receipt due to the actions of the person to whom the option is granted, if said person
inflicted an increase in the object of the contract inseparable thereof, or if the object of
the contract has increased by a separate increase derived from itself after the receipt.
2. The loss of the object of the contract after delivery shall not hinder the warranty against
defect.
Article 152
1. The defect option shall lapse by a waiver and by the acceptance of the defect after
becoming aware thereof whether expressly or implied, such as by the use of the object
of the contract or the disposition thereof.
2. It shall likewise lapse by the disposition of the object of the contract before becoming
aware of the defect.
3. In the case stated in the previous Paragraph, the option shall pertain to the person
having said right when the object of the contract is returned to his ownership without
his action.
Article 153
The defect option shall not lapse by the death of the person to whom the option is granted
and shall be transferred to his heirs.
Article 154
If some part of the object is ascertained to be the right of a third party, this shall be deemed
a defect in the remainder and it shall be governed by the provisions relating to the defect
specified in the present Section.
Section 3
Effects of the Contract
a- As regards Contracting parties
Article 155
The provisions of a valid and effective contract shall govern the subject-matter and the
consideration of said contract immediately upon its conclusion without regard to the receipt or
any other matter unless otherwise specified by the law. Each contracting party must fulfill its
obligations as specified by the contract.
Article 156
The contract must be executed in accordance with its content and not restricted to the
obligation of the contracting party as specified therein, but it may also involve whatever is
deemed of its requisites according to the law, the custom and justice, and pursuant to the
nature of the disposition.
Article 157
If mutual obligations in contracts that are binding upon both sides become due, any of the
contracting parties may refrain from performing his obligation if the other party fails to fulfill
his obligation.
Article 158
If the contract is made by way of adhesion, and where said contract includes abusive
conditions, the court may modify said conditions or exempt the compliant party from the
same in the application of justice. Any agreement to the contrary shall be void.
Article 159
If general exceptional accidents that were unforeseen at the time of contracting occur and
result in that the execution of the contractual obligation, even if not impossible, become
burdensome to the debtor and threaten the latter with serious loss, the court may, according to
the circumstances and after balancing the interests of both parties, reduce the burdensome
obligation to a reasonable limit. Any other agreement to the contrary shall be void.
b- As regards Third parties
Article 160
Without prejudice to the rules in relation to inheritance, the effects of the contract shall be
extended to the contracting parties and the general successor unless it is indicated in the
contract, by the nature of the transaction, or in the provision of the law that such effect shall
not be applicable to the general successor.
Article 161
If the contract creates personal rights and obligations related to a property and where such
rights and obligation are deemed requisites of such property and if said property is transferred
later on to a private successor, said rights and obligations shall be transferred to the same
successor at the time of the transfer of said property, where the private successor is aware of
them at the time of transfer.
Article 162
The contract shall not incur any obligation to a third party but it may grant him a right
thereof.
Article 163
If any of the contracting parties stipulates a right in favor of third parties, such stipulation
shall result in the following effects, unless the contracting parties agree otherwise or it be
inconsistent with the content of the contract:
1. The beneficiary shall acquire a direct right towards the person against whom the
stipulation is sought by which the former shall be able to require the latter to
perform the stipulation. Moreover, the person who made the stipulation may require
the person against whom the stipulation is sought to perform the stipulation in favor
of third parties.
2. The person against whom the stipulation is sought may raise all the pleas arising from
the contract against the beneficiary of the stipulation.
3. The person who made the stipulation may renounce the same prior to any notice to be
served by the beneficiary to the undertaker or the person who made the stipulation of
his intention to benefit from the said stipulation unless such a matter be inconsistent
with the content of the stipulation. Such right shall lapse by the death of the person
who made the condition.
4. The person who made the stipulation may substitute the beneficiary of the stipulation
with another person, as well as require that the stipulation be performed in his favor.
Article 164
The beneficiary in the stipulation in favor of third parties may be a future person, and he
may be a person or body not particularly designated at the time of the conclusion of the
contract when such designation shall become possible at the time the contract gives its effect
in accordance with the stipulation.
Section 4
Interpretation of the Contract
Article 165
If the wording of the contract is clear, it may not be departed from by reason of
interpretation in order to identify the intent of the contracting parties. However, if the wording
of the contract is ambiguous, it must be interpreted to seek the mutual intentions of the
contracting parties without regard to the literal meaning of the terms, relying on guidance
from the type of transaction, the applicable custom, and the trust and confidence that must
prevail between the contracting parties.
Article 166
1. A doubt shall be construed in favor of the debtor.
2. In the contracts of adhesion, the doubt must be construed in favor of the compliant
party.
Section 5
Dissolution of Contract
Article 167
The contracting parties may not rescind or modify a contract that is valid and binding
unless by mutual agreement or legal action.
Article 168
Discharge between contracting parties shall be rescission, and as regards third parties shall
be a new contract.
Article 169
Discharge shall be carried out by offer and acceptance in the meeting, “al-Majlis,” and by
dealing on condition that the object of the contract be present and existing in the hand of the
contracting party at the time of discharge. In case of loss or deterioration or if some part of the
object of the contract is disposed of to third parties, the discharge of the remaining shall be to
the extent of its share in the compensation.
Article 170
It may be agreed that a contract be automatically revoked without the need of a court order
in case of any default in the performance of any obligations arising therefrom. Said agreement
shall not exempt from a notice thereof unless the contracting parties have expressly agreed on
the exemption therefrom.
Article 171
1. In bilateral contracts, should any of the contracting parties fail to perform his
obligations under the contract, the other contracting party may, after serving a notice to
the debtor, claim for the execution or rescission of the contract.
2. The court may oblige the debtor to execute immediately , or defer such a matter a
definite period of time. It may decide on the contract rescission as long as refraining
from the performance is still established. In all cases, compensation may be rendered,
if applicable.
Article 172
1. In bilateral contracts, if force majeure occurs rendering the performance of the
obligation impossible to complete, the corresponding obligation shall be extinguished,
and the contract shall automatically be revoked.
2. Where the impossibility is partial, only the corresponding obligation to that part which
becomes impossible to be performed shall be extinguished. Such provision shall also
apply to temporary impossibility in permanent contracts. In both cases, the creditor
may rescind the contract provided that a notice is served to the debtor.
Article 173
If the contract is rescinded or revoked, the contracting parties shall be restored to their
status quo ante prior to the date of the contract and must fulfill the rights incurred thereby. In
case of impossibility, compensation shall be rendered.
Chapter 2
Unilateral Act
Article 174
Unilateral will shall not be binding to its owner save in the cases specified by the law. It
shall be governed by the provisions applicable to the contract, except those requiring the
existence of two identical intentions to create the contract.
Article 175
1. Whoever promises to give any person remuneration for performing a certain act, shall
be committed to give such remuneration to said person even if such act is performed
without regard to said promise.
2. If the promisor fails to appoint a time-limit for performing the work, he may withdraw
his promise provided that such a matter not affect the right of the person who has
performed the work prior to the withdrawal of said promise.
3. A claim for remuneration shall only be heard if filed within six months from the date of
notification of the withdrawal.
Chapter 3
Tort
Section 1
General Provisions
Article 176
1. Any damage to third parties shall render its author, even if at the age of reason, liable
for compensation.
2. Should the injury be suffered as a direct result of an act; compensation is required even
if without trespass; but if causation has resulted in an injury, the trespass shall be a
condition.
Article 177
If a person has proven that the damage resulted from a foreign cause beyond his will, such
as an Act of God, sudden accident, force majeure, due to the act of third parties, or the injured
person, he shall not be liable for compensation unless otherwise specified by the law or
agreement.
Article 178
Whoever commits an injury to the offender or his property in the course of lawful defense
of himself, his honor or property, the life of a third party, or the honor or property of said
third party, shall not be liable for said damage provided that it not exceed the necessary
extent; otherwise he shall be liable for the excess damage.
Article 179
1. The act shall be attributed to the wrong-doer not the person who ordered such act
except where the author was compelled, and provided that coercion taken into account
as actual acts shall be only unavoidable coercion.
2. A public servant shall not be liable for the damage caused to third parties in the course
of his duties if he carried out such acts in compliance with an order issued by his
superior as long as obedience of such an order is a must, or where he assumed it his
duty; where he provides evidence of the lawfulness of his act to this effect, and where
his assumption is based on reasonable grounds with the use of diligence and due care.
In this case, th0e court may order compensation to be paid by the person who is liable
for the damage.
Article 180
If several persons are liable for the tort, each of them shall be considered liable in
proportion to his share therein without joint liability thereof, unless otherwise determined by
the court.
Article 181
In all cases, the compensation shall be equal to the damage incurred to the injured person
and for the gain lost provided that such a matter be a natural consequence of the wrongful act.
Article 182
The compensation shall be valued in currency, yet the court may, according to the
circumstances and at the request of the injured, order that status be restored to status quo ante
or the performance of a certain obligation related to the tort as an indemnity.
Article 183
Any exemption from liability for the wrongful act shall be void.
Article 184
A civil liability shall not affect the criminal liability when its requirements are satisfied,
and the criminal penalty shall have no effect on the determination of the scope of the civil
liability and evaluation of the compensation.
Article 185
1. A claim for compensation resulting from the tort shall not be heard after the lapse of
five years from the date on which the injured becomes aware of the injury and the
person responsible thereof.
2. If a claim for compensation arises from a crime where the criminal action is still under
examination after the lapse of the time-limit mentioned in the previous paragraph, the
claim for compensation shall not be dismissed except by the dismissal of said criminal
action.
3. In all cases, a claim for compensation shall not be heard after the lapse of fifteen years
from the date on which the wrongful act has occurred.
Section 2
Liability for Personal Acts
1- Damage to the person
Article 186
The general provisions of the wrongful act shall apply to the damage to the person or less.
As regards the compensation, blood money “Diyya” and compensation “Arsh” in addition to
the necessary treatment costs shall be applicable.
2- Damage to the property
Article 187
Without prejudice to the general provision of liability for the tort, whoever damages or
destroys the property of a third party shall be liable to provide the same in kind if the same is
a fungible or its value if it is a non-fungible.
Article 188
Without prejudice to the general provision of liability for the tort, if the damage is partial,
the person who causes the damage shall indemnify for the decrease in value. However, if the
decrease is gross, the owner of the property may choose either to take an equivalent amount
of the decrease in value or abandon the destroyed property and take its value.
Article 189
If a child, either at, or below the age of reason, or whoever is deemed the same, damages
the property of a third party, he is required to indemnify from his own money.
Article 190
1. If any person damages the property of another under the belief that it is his own, he
shall indemnify for the damage.
2. If any person damages the property of another with the permission of its owner, he
shall not indemnify him.
3- Usurpation “Ghasb” and Transgression
Article 191
What has been taken shall be handed back, and whoever has unlawfully deprived a third
party of his property, shall be required to return the same in its original condition at the time
of the wrongful taking of the property “Ghaseb”, whether be fungible or non-fungible, and he
must indemnify for its benefits and growth.
Article 192
If the usurped property has been damaged in the hand of the usurper “Ghaseb” due to the
act of a third party, the wronged person shall have the choice to have recourse for
compensation against any of them.
Article 193
If the usurper has disposed of the usurped property for consideration or by gifting, where
such property was totally or partially damaged in the hand of the person to whom the property
was disposed, the wronged person may have recourse for compensation against any of them.
Hence, if he chooses to litigate the usurper “Ghaseb”, his act shall be effective, and if he
chooses to have recourse against the person to whom the property was disposed, said person
may, in turn, have recourse against the usurper “Ghaseb” under the provisions of the law.
Article 194
1. A person who wrongfully appropriates the property from the usurper shall be regarded
the same as the offender “Ghaseb”.
2. If the person who usurped the property from the usurper “Ghaseb” has returned the
property usurped to the first offender “ghaseb” shall be solely discharged, and if he
returns the said property to the wronged person, he and the first offender “ghaseb” shall
be both discharged.
3. If the property usurped is destroyed or damaged at the hand of the offender “ghaseb”,
the wronged person shall have the choice to have recourse to either all or part of the
compensation against both of the offenders or one of them. If he chooses to have
recourse against the first usurper “ghaseb”, the latter may in turn have recourse against
the second offender “ghaseb”. And if the wronged person chooses to have recourse
against the second offender, the said offender may not have recourse against the first
usurper. And if said wronged person chooses to have recourse against both offenders,
the first usurper “Ghaseb” may have recourse against the second one to the extent of
what he has satisfied.
Article 195
In all cases, the court may render the offender “ghaseb” liable to pay an appropriate
compensation, if deemed necessary.
Section 3
Liability for the Act of a Third Party
Article 196
1. No person shall be held liable for the acts of another. Nevertheless, at the request of the
injured, and if such a matter is justified, the court may oblige the payment of the
compensation rendered therefore:
a. Whoever is considered responsible, by law or upon agreement, for the supervision
of another person who is considered in need of supervision due to his incapacity,
or, mental or physical condition; except where he proves that he has reasonably
performed his duty of supervision or that the damage is inevitable even if such
obligation was performed with due care.
b. Whoever has an actual authority over the wrong-doer in his supervision and
instruction, even if such choice is made without free will; if the tort is committed
by the subordinate in the course of or by reason of his duty.
2. Whoever has paid said compensation may have recourse against the person who is
rendered liable for the payment thereof.
Section 4
Liability for Animals and Things under one’s care
Article 197
The possessor of an animal, even if not the owner, shall be liable for the damage incurred
by the animal in case of negligence or trespass.
Article 198
1. The damage incurred by a whole or partial collapse of a building shall be guaranteed
by the owner of the building or its trustee unless he proves no negligence or offence.
2. Whoever is threatened by damage from the building may require the owner to adopt
the necessary measures to avert the risk. Should the owner default, the court may
authorize the former to adopt such measures at the cost of the owner, without prejudice
to any special provisions.
Article 199
Whoever has things at his disposal that require special care to protect against their danger,
or mechanical tools, shall be liable to indemnify for the damage incurred thereby except
where it is proven that the damage is due to a foreign cause beyond his will.
Section 5
Liability for the Use of Public Right
Article 200
The use of a public right is restricted to incurring no damage to third parties, and whoever
uses such right causing injury that may be avoided to another shall be liable for
compensation.
Chapter 4
Beneficial Act
Section 1
Unjustified Enrichment
Article 201
No person may take the property of another without legitimate reason; otherwise he must
make restitution of that which he has taken.
Article 202
1. Whoever is unjustly enriched through the property of another, shall be required to
make restitution of it if it exists, and in kind or value of the same if it no longer exists.
2. Should any person not deliberately lose the possession of the property of another and if
said property is merged with the property of third parties due to an Act of God in such
a way as to be inseparable without causing any harm to any of the owners, the least in
value shall be regarded as part of the greatest in value after payment of the value of the
first unless otherwise specified by the law.
Section 2
Receiving what was not due
Article 203
1. Any person who receives payment that was not due to him must make restitution of the
same to its owner as well as to the gains and benefits made therefrom.
2. A recovery of payment shall be not applicable when the person who made the payment
was aware that he is not bound by the payment at the time of payment, unless he lacks
capacity or was forced to pay.
Article 204
A payment may be recovered when it is made in payment of a debt the reason of which has
not yet materialized or one the reason of which was extinguished after it materialized.
Article 205
A recovery of payment shall be valid when it is made in payment of a debt that was not yet
due if the payer was ignorant of the existence of a time limit.
Article 206
Any person who makes payment assuming that it is an obligation upon him and then it is
revealed that it is not, may recover any payment made to the person who received the same if
it still exists, and in kind or the value of the same if it no longer exists.
Section 3
Officiousness
Article 207
Officiousness is recognized when a person wilfully responds to another’s urgent
circumstances, without being obliged thereof.
Article 208
Officiousness shall be materialized even if the officious intermeddler manages the affairs
of another person while managing a matter for himself where both matters have an
inseparable connection that renders any matter impossible to be performed without the other.
Article 209
Officiousness shall also be materialized even if the interference of the officious
intermeddler in the affairs of third parties is contrary to the consent of said third parties if
such intervention was an implementation of an obligation imposed by the law and demanded
by pressing necessity or required for public interest.
Article 210
The rules of agency shall apply if the employer ratifies what has been performed by the
officious intermeddler.
Article 211
An officious intermeddler is required to proceed with the work initiated by him until the
employer becomes able to carry out said work by himself. He shall also be required to notify
the employer of his intervention when possible.
Article 212
1. If an officious intermeddler assigns all or part of the work to another person, he shall
be held liable for the acts of his agent, without prejudice to the right of the employer to
have direct recourse against said agent.
2. Should many officious intermeddlers perform one act, they shall be held jointly liable.
3. An officious intermeddler shall be obliged same as an agent to make restitution of
whatever he possessed due to the officiousness and must give an account of his work.
Article 213
An officious intermeddler shall be considered an agent of the employer if he acted with the
care of an ordinary person, even if the intended result is not achieved. In this case, the
employer shall be bound by the obligations undertaken by the officious intermeddler for his
account, and must indemnify said officious intermeddler for such undertakings, and make
restitution of the essential and beneficial costs required by the circumstances, as well as for
the damage incurred by reason of the work.
Article 214
1. If an officious intermeddler dies, his heirs shall be committed to the obligations
undertaken by the heirs of the agent upon the termination of the agency by the death of
the agent.
2. If the employer dies, the officious intermeddler shall remain committed of the same
obligations towards the heirs as towards the deceased.
Section 4
Settlement of the debt of others
Article 215
Any person who settles the debt of another at his request shall have recourse against the
person who ordered the payment for what is settled on his behalf, and shall substitute for the
original creditor in requesting that, whether a recourse in this regard is stipulated or not.
Article 216
Any person who settles the debt of another without the permission of the latter may not
have recourse of what he has settled either against the debtor or the creditor except where the
debtor is discharged from the debt even if after the payment of the debt.
Article 217
If a person has mortgaged his property for the debt of another person and the debt was
settled in order to release the mortgaged property from said debt, he shall have recourse
against the debtor for the same.
Section 5
Common Provision
Article 218
A claim arising from a beneficial act shall not be heard after the lapse of five years from
the day on which the debtor became aware of his right of recourse. In all cases, the lawsuit
shall not be heard after the lapse of fifteen years from the day on which the right of recourse
arose.
Chapter Five
The Law
Article 219
Obligations arising directly from the law only, shall be governed by the legal provisions
creating them.
Title 2
Effects of Obligations
Chapter 1
General Provisions
Article 220
A debtor must fulfill his obligation when legal requirements are satisfied; if he defaults, it
shall be acquired by force.
Article 221
A forced execution shall not be applicable as regards the obligation of a debtor becoming a
religious duty and not rendered by courts. Yet, if said debtor voluntarily fulfills said
obligation, such settlement shall be valid, and it shall not be considered as the settlement of
what is not due.
Article 222
A settlement made by the debtor or his agent or by another person having an interest in
such fulfilment shall be deemed valid. Even a settlement made by a person having no interest
in said settlement, with or without an order from the debtor, shall also be valid provided that
the creditor may refuse the payment made by third parties should the debtor have objected to
such a matter and the creditor was notified of said objection
Article 223
For the validity of a settlement, the person who made the settlement must be an owner of
what he fulfilled it with and have legal capacity to dispose of the same. If the debtor lacks the
capacity of disposition, his settlement of the debt shall be considered valid unless he sustains
injury from such settlement.
Article 224
A settlement made to some creditors shall not have effect against other creditors if the
debtor is incapacitated in reference to said debt and the settlement was made from the seized
property thereof, or if he suffers from terminal illness, and where such settlement shall injure
the remaining creditors.
Article 225
A settlement may be made to the creditor or his deputy. Any person who gives a debtor a
quittance issued by the creditor shall be deemed as having capacity for receiving the debt
unless it is agreed that the payment must be made to the creditor in person.
Article 226
1. If a creditor lacks full legal capacity, a debtor shall not be discharged from the debt
unless by payment made to his legal tutor.
2. If settlement is made to a creditor who lacks full legal capacity, and the object of
settlement delivered to his hand was damaged or lost, his legal tutor may claim the debt
from the debtor.
b- Rejection of a Debt Settlement
Article 227
If a creditor rejects without justification the acceptance of a duly offered settlement, refuses
to perform the acts without which a settlement shall not give effect, or states that he shall not
accept such settlement, the debtor is required to serve an official notice thereof in which he
shall determine a reasonable period during which the creditor must perform his duty to satisfy
his right.
Article 228
If a creditor is notified, he shall bear the liability for the loss of the object of obligation.
The debtor shall have the right to deposit the same upon the approval of the court at the cost
of the creditor and may claim compensation for the sustained damage thereof.
Article 229
If the object of settlement is a specified property required to be delivered at the place where
it exists, the debtor must obtain a license from the court for the deposit after serving a notice
to the creditor to take delivery thereof. If the property be real estate or property intended to
stay where it exists, the debtor may request that it be put under receivership.
Article 230
If the object of settlement be vulnerable to deterioration or where heavy expenditures shall
be borne to deposit the same or put it under receivership, the debtor may request from the
court to permit the sale of the same at its market price. If that is revealed impossible, it shall
be sold by public auction. The price shall be deposited at the treasury of the court as a
substitute for the deposit of the property itself.
Article 231
A deposit or any procedure deemed the same shall be allowed if the debtor is not aware of
the identity or domicile of the creditor, if the creditor be incapacitated or lacks capacity
having no representative to accept such settlement, if the debt is disputed with several
persons, or where other serious grounds justify said procedure.
Article 232
A real offer to the debtor shall be a substitute for settlement if followed by a deposit that
fulfills its legal requirements or by any similar proceeding should it be accepted by the
creditor, or a final judgment on its validity be rendered.
Article 233
1. If a debtor offers up the debt followed by a deposit or any similar proceeding, he may
revoke said offer as long as it is not accepted by the creditor or should a final judgment
on its validity not yet be issued in this regard. In case of revocation, neither his partners
to the debt nor the guarantors shall be discharged from the debt.
2. If a debtor revokes his offer after it is accepted by the creditor or a judgment is
rendered on its validity, and if the creditor ratifies such revocation, said creditor may
not raise a plea for the securities that guarantee his right, and the parties to the debt as
well as the guarantors shall be discharged from the debt.
c- Space, Time, Costs and Establishment of the Settlement
Article 234
Settlement shall be restricted to the particular debt due thereof, and the creditor may not be
forced to accept any other thing.
Article 235
1. A creditor may not be forced to accept a partial settlement of his debt unless an
agreement or stipulation to the contrary is provided.
2. If part of the debt is disputed, and if the creditor accepts to collect the undisputed part
thereof, the debtor may not reject settlement of said part.
Article 236
If a debtor is liable to pay several debts pertaining to one creditor that be of same kind, and
should what is settled by the debtor not be sufficient to fulfill all these debts, the debtor may
designate the debt which he aims to settle at the time of settlement unless a legal obstacle or
agreement to the contrary, against such designation, is provided.
Article 237
If a debt is not specified in the manner indicated in the previous Article, a deduction shall
be made from the account of the debt that becomes due. In case several debts become due,
said deduction shall be made from the debts of the highest cost to the debtor. If the debts be
equal in cost, the same shall be made from the debt to be designated by the creditor.
Article 238
1. Settlement must be made immediately after the obligation against the debtor becomes
final unless otherwise provided by agreement or by any provision.
2. When no provision by law is provided to the contrary, the court may grant the debtor a
reasonable period or periods of time during which he must fulfill his obligation, if his
case requires so, and where no gross injury is incurred to the debtor from said
postponement.
Article 239
If the debt is delayed, the debtor may settle the same prior to the fixed date, and the
creditor shall be forced to accept such settlement.
Article 240
1. If the object of settlement is a specified property, it must be delivered at the place
where it existed at the time of the issuance of the obligation unless otherwise provided
by agreement or by provision.
2. In other obligations, the settlement must be made at the place where the domicile of the
debtor is located at the time of settlement or at the place where the head office of the
debtor’s business is located if such obligation is related to said business.
Article 241
If the debtor sends the debt to the creditor with his messenger and the same is lost while in
the hands of said messenger prior to his arrival, the debtor shall be held liable for said loss. If
the creditor orders the debtor to pay the debt to the creditor’s messenger and he complies
thereof, the creditor shall be held liable for the loss and the debtor shall be discharged from
the debt.
Article 242
The settlement costs shall be borne by the debtor unless otherwise provided by agreement
or by the provision of the law.
Article 243
A person who settles all or part of the debt may request to receive a quittance of that debt.
If the creditor rejects such a matter; the debtor may deposit the due debt by way of deposit
with the court.
2- Execution with the equivalent of the settlement
a- Settlement by means of a substitute
Article 244
Settlement by means of a substitute shall be valid if agreed upon by the two parties in
accordance with the general rules of the contract.
Article 245
The provisions of the sale shall apply to the settlement by means of a substitute if the
consideration is a designated property in consideration of the debt. The provisions of the
settlement as regards the termination of the debt shall also be applicable thereto.
Article 246
The debt with all its securities shall be extinguished by way of settlement by means of a
substitute, and the right of the creditor shall be transferred to said consideration.
b- Set-off
Article 247
Set-off shall be when a settlement of a debt owed to a creditor is made through a debt
which he owes to the same debtor and shall be compulsory, voluntary, or judicial.
Article 248
Compulsory set-off shall be brought by force of law. It is a condition that the two parties be
indebted to each other, the two debts be likewise in kind, description, maturity, force and
weakness, and performing said set-off shall not cause damage to third parties whether or not
the cause of the debt be the same.
Article 249
Voluntary set-off shall be carried out by the agreement of both parties if any of the
requirements set for the compulsory set-off not be satisfied.
Article 250
Judicial set-off shall be performed by a verdict from the court if the requirements thereof
are fulfilled either by an original or incidental claim.
Article 251
If a depositary has a debt against the depositor, or if the usurper has a debt against the
owner of the wrongfully appropriated property, and the debt is of the same kind as the deposit
or the usurped property, a set-off shall only be performed upon the agreement of both parties.
Article 252
If a creditor damages an asset of the same kind as the debt, deemed a property by the
debtor the set-off shall be raised thereby. Yet if it is not of the same kind, a set-off shall only
be carried out upon the agreement of both parties.
Article 253
Set-off shall be raised at the request of the person having interest therein and shall be made
to the extent of the lesser debt.
Article 254
Time limitation that shall render the lawsuit barred as to one of the rights shall not prevent
raising the plea of set-off when the other right thereof is claimed and when such a period that
prevents the hearing of the lawsuit is not extinguished in the time during which the set-off is
still possible.
Article 255
If a debtor fulfils a debt upon him and having the right to request the set-off of a right, he
may not raise a plea to the securities of said right in damage to the right of third parties unless
he was unaware of its existence in which case a reasonable excuse is proven thereof.
c- Merger of the Rights of creditor and debtor
Article 256
1. When the capacities of creditor and debtor are united in the same person as regards the
same debt, said debt shall be extinguished to the extent where both liabilities are
united.
2. Merger of the rights of creditor and debtor shall not be performed when the creditor is
an heir of the debtor participating in acquiring his debt from the estate with other
creditors.
Article 257
If the reason of the merger of the rights of creditor and debtor ceased to exist, the debt
shall be restored to status quo ante.
Section 2
Compulsory Execution
1- Specific Performance
Article 258
1. The debtor shall be compelled to execute his obligation after being served a notice
through specific performance if possible.
2. If a specific performance shall become burdensome to the debtor, the court may, at the
request of the debtor, restrict the right of the creditor to acquire pecuniary
compensation provided that he shall not sustain gross damage thereof.
Article 259
1. If the subject-matter of the obligation is an act that the debtor shall be required to
perform personally because of its nature or the stipulation of an agreement, the creditor
may reject the fulfilment thereof by other than the debtor.
2. If the debtor fails to perform the work, the creditor may request the permission of the
court to perform said work. He may also perform the same without permission when
necessary; execution in both cases shall be at the cost of the debtor.
Article 260
A court’s judgment shall substitute for the performance if the subject-matter of the
obligation is a work and where its nature allows so.
Article 261
1. If the debtor is required to maintain or manage the property, or the exercise of due care
in the performance of his obligation, he shall be considered to have fulfilled his
obligation thereof if he has performed the same with the care of an ordinary person
even if the intended purpose was not achieved unless otherwise provided by the law or
by an agreement.
2. In all cases, the debtor shall remain liable for his act of deceit or gross error thereof.
Article 262
If the subject-matter of the obligation is to abstain from an act, and if the debtor fails to
comply with the same, the creditor may request that the court eliminate any violation, or
request a permission thereof to conduct the removal of the same at the cost of the debtor.
Article 263
If a specific performance is carried out after the judgment of the court or if the debtor
insists on the non-performance, the court shall determine the amount of compensation to be
paid by the debtor taking into account the damage incurred to the creditor and the obstinacy
of the debtor.
2- Execution by compensation
Article 264
If it becomes impossible for the debtor to execute the specific obligation, a judgment for
compensation shall be rendered against him for failure to fulfill his obligations unless it is
proven that the impossibility of execution has arisen from a foreign cause beyond his will.
The same judgment shall be rendered if the debtor delays the fulfilment of his obligation. The
court shall assess the compensation so as to be equal to the damage sustained by the debtor at
the time of its occurrence.
Article 265
Compensation shall not become due except after a notice is served to the debtor, unless
otherwise provided thereof.
Article 266
It is not necessary to serve a notice to the debtor in the following cases:
1. If the specific performance becomes impossible or inefficient due to the act of the
debtor.
2. If the subject-matter of the obligation is a compensation that resulted from an
unlawful act.
3. If the subject-matter of the obligation is to make restitution of a property that the
debtor is aware is stolen or a property which he has received without right though
being aware of the same.
4. If a debtor has stated in writing that he does not intend to fulfill his obligations.
Article 267
1. If the subject-matter of the obligation is a sum of money, the contracting parties may
determine the amount of compensation by stipulation of the same in the contract in
advance or by a subsequent agreement.
2. In all cases, the court may, at the request of both parties, amend said agreement so as
the compensation becomes equal to the damage; any agreement to the contrary shall be
void.
Section 3
Legitimate means for the protection of execution
1- The debtor’s property as a guarantee of fulfilment
Article 268
All the property of the debtor shall secure his debts, and all creditors shall have equal right
to such security except for he who has the priority right in accordance with the law.
2- Indirect Action
Article 269
1. The creditor may, in the name of his debtor, exercise all the rights of said debtor except
those related to his person or that are unable to be seized. The creditor may not exercise
these rights unless it is proven that the debtor has not exercised the same and that his
negligence may cause or increase his insolvency. The debtor must be intervened in the
lawsuit.
2. The creditor shall be considered an agent of his debtor in the exercise of his rights;
every benefit that accrues from the exercise of said rights shall be included in the
property of the debtor and shall become a security for all creditors.
3- The simulated contract case
Article 270
If two contracting parties conceal a real contract with a simulated contract, the applicable
contract between the two contracting parties and the general successor shall be the real
contract.
Article 271
1. Creditors of the two contracting parties and the private successor in the simulated
contract may invoke said contract when they act in good faith, as well as they may
invoke the underlying contract, and shall prove, by all means, such simulation which
has caused damage thereto..
2. Should a conflict of interests occur between the concerned parties therein, and where
some of them hold to the apparent contract while others hold to the underlying
contract, priority shall be given to the first aforementioned.
4- Ineffectiveness of the Debtor’s act towards the Creditor
Article 272
1. Every creditor, whose debt is due, while an act is issued by the debtor that caused or
increased his insolvency, may request the non-effectiveness of said act against him in
the following cases:
a. If the disposition of the debtor is a contribution of what is not an obligation, the act
of deceit of the debtor or the good faith of the person to whom the disposition is
made shall not be a condition for the non-effectiveness of said act against the
creditor.
b. If the act of the debtor is commutative, it is a condition that both the debtor and the
person to whom the disposition is made be aware of the insolvency.
c. The previous provisions shall be applicable in case a disposition is issued by the
successor to whom the property is transferred from the debtor.
2. If the insolvent debtor settles a debt to one of his creditors before the lapse of the timelimit, every creditor whose debt is due may request the non-effectiveness of said
settlement.
Article 273
If a creditor claims the insolvency of the debtor, the creditor must prove the debts in the
liability of the debtor, and if the debtor claims to be solvent, he shall be required to prove that
he has funds that equal or exceed the amount of debts.
Article 274
The person to whom the disposition is made may be discharged from the lawsuit if the
amount of the money he disposes with the treasury of the court is not less than the value on
quantum meruit basis.
Article 275
When the non-effectiveness of the disposition is determined, all the creditors against whom
such act is issued shall benefit from said non-effectiveness.
Article 276
An action for the non-effectiveness of the disposition shall not be heard after the lapse of
six months from the day on which the creditor became aware of the reason of non-
effectiveness of the disposition. In all cases, the lawsuit shall not be heard after the lapse of
fifteen years from the date of issuance of the disposition.
5- Interdiction of the Insolvent debtor
Article 277
A debtor may be interdicted if his due debts exceed his assets.
Article 278
1. An interdiction may be granted by a judgment issued by the court of the domicile of
the debtor at the request of one of the creditors or the debtor himself. The lawsuit shall
be examined as soon as possible.
2. Any creditor may, based on the judgment of interdiction, obtain an order from the
competent judge for the seizure of all property of the debtor that is allowed to be seized
by law. The seizure of the property of the debtor shall remain valid to the interest of
creditors until the removal of the interdiction.
Article 279
Prior to the interdiction of a debtor, the court must take into consideration all the
surrounding circumstances and the extent of the liability of said debtor for the reasons that
resulted in the petition for the interdiction, as well as to the lawful interests of his creditors
and any other condition that may affect his financial position.
Article 280
1. On the day in which an action for interdiction shall be recorded, the secretary of the
court must register the summary of the pleadings in a special register to be arranged
according to the names of the debtors to be interdicted, and he must record the enacting
terms of the judgment issued in the lawsuit and any other decision which confirms or
repeal it in this register; all on the day of the issuance of the judgment.
2. According to the laws and Sultani decrees in effect, said secretary must also send a
copy of these registrations and records to the competent party, to be proven in a general
register according to a decision to be issued by the competent authority of said party.
Article 281
The debtor, whose domicile is changed, must notify the same to the secretariat of the court
of his former domicile, and the competent secretary is required to send a copy of the judgment
of interdiction and the information recorded in the register to the court of the new domicile in
order to enter the same in its registers, immediately after he becomes aware of the change of
domicile whether by notification from the debtor or by any other way,.
Article 282
The judgment of interdiction shall result in that:
1. Any deferred debts in the liability of the debtor shall become due.
2. Any disposition of property made by the debtor or his recognition of a debt that arose
after the judgment of interdiction shall have no effect on the rights of all creditors as
of the time of the registration of the summary of the pleadings.
Article 283
If an interdiction is imposed on the property of the debtor, the competent court having
jurisdiction over said interdiction may grant the debtor, upon a petition submitted by him,
maintenance to be received from his seized property. An objection against the decision may
be lodged to the court within five days from the date of notification of the decision to the
debtor or creditors.
Article 284
The property of the interdicted debtor shall be sold and divided pro rata among the
creditors according to the procedures specified by the law after a maintenance payment is
allocated to the debtor and whom he supports.
Article 285
The debtor shall be sentenced for fraud under the Penal Code or any other law in the
following cases:
1. If, when an action for a debt is brought against him, he declares insolvency with the
intention to cause damage to the creditors, and a decision in said lawsuit is rendered
against him for the debt and interdiction.
2. If he conceals, after the judgment of interdiction, some of his property to prevent any
execution against said property or invents simulated debts or overstated amounts
with the intention to cause damage to his creditors.
3. If he changes his domicile by way of deceit whereby such change has resulted in
damage to his creditors.
Article 286
1. An interdiction shall be removed by a judgment to be issued by the court of the
domicile of the interdicted person at the request of the concerned party in the following
cases:
a. If the property of the interdicted person is divided among the creditors.
b. If it is proven that the debts of the interdicted person do not exceed his property
anymore.
c. If the interdicted person settles his debts that became due without the interdiction
having any impact on the debt maturity. In this case, the period of debts that
became due shall be restored to their status quo ante provided that the interdicted
person has paid all the instalments that became due.
d. If five years have lapsed as of the date of the issuance of the judgment of
interdiction.
2. The secretary of the court must spontaneously record the judgment issued on the
removal of the interdiction on the day of its issuance in the register specified in Article
280 of the present Law, and must send a copy thereof to the authority specified in
Clause 2 of the same Article to be also recorded.
Article 287
After the removal of interdiction, the debtor may apply to restore the debts that became due
because of the interdiction but were not paid, to their previous time period provided that he
has settled all debts that became due without the interdiction having impact on their maturity.
Article 288
The removal of interdiction shall not prevent creditors from challenging the dispositions of
the debtor or exercising his rights according to Articles 269, 270, 271, 272, 273, 274, 275 and
276 of the present Law.
6- Right of Retention
Article 289
1. Any person who is bound to perform any obligation may withhold performance as long
as the creditor has failed to fulfill his obligation that has arisen due to the debtor’s
obligation to which it is related or corresponding thereto.
2. Each of the two contracting parties in financial commutative dealings may detain the
object of obligation while in their possession until receiving due consideration.
3. Any necessary expenditures disbursed by a person on the property of another while in
his possession, may refrain from returning said property until he receives what is due to
him except if the obligation to make restitution results from an unlawful act.
Article 290
Any person who withholds the property must maintain the same and give an account of the
yields thereof. He shall also apply for the permission of the court for the sale of the detained
property should he fear loss or deterioration of the same according to the procedures related to
the sale of the mortgaged property. His right of retention shall be transferred to the price
thereof.
Article 291
Any person who withholds property while exercising his right of retention shall have
priority over other creditors pro rata to receive his right therefrom.
Article 292
The right of retention shall be extinguished when the property leaves the possession of the
possessor or the bearer. Nevertheless, should said property be secretly taken from the
possession of he who has detained it or without his consent, he may request redemption of the
same within thirty days from the time at which he becomes aware of the removal of said
property from his possession yet before the lapse of one year from the time of removal.
Chapter 3
Characteristic Descriptions of Obligation
Section 1
Condition and Term
1- Condition
Article 293
An obligation shall be conditional if its existence or elimination relies on a future matter
that is not yet certain.
Article 294
An obligation shall be void if its existence depends on an impossible condition or is
inconsistent with the provisions of the Islamic Shari’ah or the provisions of the Law.
Article 295
A conditional obligation shall not be effective unless the condition is fulfilled.
Article 296
An obligation shall be extinguished if the condition binding the same is fulfilled; the
creditor shall commit to return what he has taken. If it is revealed impossible to return the
same due to said condition, he shall be held liable for compensation.
2- Term
Article 297
An obligation shall be for a term when its effectiveness or extinguishment is based on a
future feasible matter. A matter shall be considered feasible if its occurrence is inevitable
even if the time of occurrence is not yet known.
Article 298
If it is indicated from the obligation that the debtor is not fulfilling the same except upon
solvency or prosperity, the court shall determine a time limit for the settlement, taking into
consideration the current and future resources of the debtor, and require of him to act with due
diligence so as to fulfill his obligation.
Article 299
The debtor’s right shall lapse in the following cases:
1. If he is declared bankrupt or interdicted.
2. If he fails to submit the securities agreed upon.
3. If real securities on the debt have decreased due to his act or for a reason beyond his
will, unless he sets out to complete them.
Article 300
If the time limit is granted to the benefit of both parties, he may renounce said period by his
unilateral will.
Article 301
A deferred debt shall not become due by the death of the creditor. It shall become due by
the death of the debtor except if it is guaranteed by real security.
Section 2
Plurality of the Obligation subject-matter
1- Choice of the subject-matter
Article 302
1. The subject-matter of the obligation may be multiple, provided that the debtor shall be
discharged from the debt if he fulfills any of the said obligations. The choice shall be
the debtor’s unless otherwise provided by agreement or by law.
2. The special provision of the option to designate shall apply to the subject-matter of the
obligation.
2- Substitution of the subject-matter
Article 303
1. An obligation shall be facultative if its subject-matter is one, but the debtor shall be
discharged from the debt if he renders another obligation as a substitute.
2. The original obligation and not the substitute shall be the only subject-matter of the
obligation, and it shall determine its nature.
Section 3
Plurality of the two Parties to the Obligation
1- Solidarity between Creditors
Article 304
Solidarity between creditors exists only by agreement or by provision of the law.
Article 305
A debtor may pay the debt to one of the joint creditors unless the same notifies him not to
settle his.
Article 306
If a debtor is relieved from the liability towards one of the joint creditors for some reason
other than settlement, he shall only be discharged towards the other creditors in proportion to
that share.
Article 307
Any joint creditor may not perform any act that shall inflict damage upon other creditors.
Article 308
1. Creditors, jointly or severally, may claim the debtor for the debt.
2. The debtor may not plead against one of his joint creditors on the grounds of the
defense of another creditor. But he may raise a plea on the grounds of the defense of
the first said creditor and the grounds of the common defense among all creditors.
Article 309
Whatever is paid as part of the debt to one of the joint creditors, shall be the right of all said
creditors in equal shares thereof unless otherwise provided by agreement or provision.
2- Joint Debt
Article 310
A debt shall be joint between several creditors if it had arisen from the same cause either
by the unity of the transaction or by prior ownership of the property that gave rise to the debt.
Article 311
Each co-creditor in a joint debt may claim his share therein; and any sum that is collected
thereof shall become common between all creditors, each according to his share.
Article 312
If one of the co-creditors collects his share in the joint debt, other creditors may share
therein, each according to his share, and have recourse against the debtor for the remainder; or
they may leave to the co-creditor what he was paid provided that they shall have recourse
against the debtor for their shares. If co-creditors choose to pursue the debtor, they shall not
be entitled to have recourse against the co-creditor who was paid except upon the loss of their
proportions; this shall be in proportion to their shares in the sum received by the co-creditor.
Article 313
If one of the co-creditors collects his share in the joint debt yet disposes of it, consumes it
or is lost or deteriorates while in his possession due to his negligence, other co-creditors may
have recourse against him as per their shares; but if the loss or deterioration was not due to his
negligence, he shall not be held liable to the shares of his co-creditors therein.
Article 314
If the debtor is selected as a guarantor to one of the co-creditors equal to his share in the
joint debt or in case of subrogation, co-creditors may share in the sum taken by the guarantor
or the subrogee in proportion to their shares,.
Article 315
If one of the co-creditors purchases a property of a debtor in consideration of his share in a
joint debt, the co-creditors shall hold him liable for the damage inflicted to their shares out of
the price of what he has purchased, or may have recourse against the debtor for their shares,
as well as share what he has purchased if they so agree.
Article 316
A co-partner may donate his share in the debt to the debtor or discharge him from said
share without being held liable for the shares of his co-creditors as regards what he has
donated or discharged.
Article 317
A co-creditor in the joint debt may conclude a settlement agreement on his share therein.
Hence, if the consideration of said settlement is of the same kind of the debt, the remaining
co-partners may share in whatever he has received or pursue the debtor. Yet, if the
consideration of the settlement agreement is of a kind other than that of the debt, they may
pursue the debtor or the co-creditor for their shares in the debt that is the subject of the
settlement agreement.
Article 318
No co-creditor in a joint debt may solely defer such a debt without the consent of the others
to such postponement; yet he may postpone his share without the consent of the others, and in
this case, he may not share in what they have received as part of the debt.
3- Joint liability of the Debtors
Article 319
Joint liability between the debtors shall arise only by agreement or by a provision of the
law thereof.
Article 320
If one of the joint debtors settles the debt in full, other debtors shall also be discharged
from liability.
Article 321
1. A creditor may claim all or some of the joint debtors for his debt, taking into account
the characteristics of the relationship between him and each debtor that may affect the
debt.
2. When claimed for the settlement, every debtor may raise a plea of defense, whether
personal to him or common among all debtors.
Article 322
If a creditor agrees with one of the joint debtors in the debt to the novation of that debt,
others shall be discharged from the debt unless he reserves his right against all of them.
Article 323
If the share of one of the joint debtors in the debt extinguishes due to a reason other than
settlement, the debt shall not be extinguished in relation to other debtors except to the extent
of the share of said debtor.
Article 324
1. If a creditor discharges any of the joint debtors in the debt from his debt only, said
debtor and the remaining debtors shall be discharged from his share, however, he shall
remain jointly liable.
2. If he is discharged from joint liability only, he shall remain liable for the debt; hence,
the creditor may not claim him for the others’ shares, the remaining debtors may have
recourse against him for what they settle on his behalf by virtue of joint liability.
3. If he is absolutely discharged, such discharge shall be from both the debt and joint
liability, unless it is indicated that the discharge is limited to one of them only in the
circumstances or the nature of the transaction.
Article 325
1. Dismissal of an action due to time limitation as regards one of the joint debtors shall
not benefit other debtors except to the extent of the share of said debtor.
2. If time limitation is interrupted or where its effectiveness ceased in relation to one of
the joint debtors, the creditor may not raise such a plea against the remaining debtors.
Article 326
A joint debtor shall be liable for his performance only in the execution of his obligation,
However, if he is warned or sued by a creditor, such a matter shall have no effect on other
debtors, still, the notice served by one of the joint debtors to the creditor shall benefit the
others.
Article 327
A conciliation agreement concluded between one of the joint debtors and the creditor shall
not be effective if it incurs a new obligation or increases their obligations except if they
accept such a matter. They shall benefit from the settlement when it includes a discharge from
the debt or a discharge from liability thereof by any other means.
Article 328
A recognition of debt by a joint debtor shall not be effective against the remaining debtors,
and other joint debtors shall not be prejudiced if an oath is requested by the creditor thereof
and defaults, or if an oath is tendered to a creditor and he takes it. But if an oath is addressed
by a creditor, and said debtor takes the oath, other debtors shall benefit thereof.
Article 329
If a judgment is rendered against one of the joint debtors, it shall not affect the others yet
they shall benefit from the said judgment if issued in his favor unless it be based on a cause
that is personal to him.
Article 330
Any of the joint debtors who settle the debt shall have the right to have recourse against the
remaining debtors, each according to his share in the debt.
Article 331
If one of the joint debtors is the only person having interest in the debt, he shall be liable
for the debt towards other co-debtors in full.
4- Indivisibility of the Obligation
Article 332
An obligation shall be indivisible:
1. If the nature of the subject-matter of the obligation is indivisible.
2. If it is indicated that both contracting parties intended that the performance of the
obligation may not be partial.
Article 333
In case several debtors are bound by one indivisible obligation, each of them shall be
bound to the fulfilment of the obligation in full, and he who settles the debt may have
recourse against the other debtors to the extent of his share unless otherwise provided by
provision or agreement.
Article 334
1. In case of several creditors of one indivisible obligation or in case of several heirs of
the creditor of the said obligation, every creditor or heir may claim for the fulfilment of
the obligation in full.
2. If one of the creditors or heirs objects, the debtor is required to fulfill the obligation to
all of the said creditors jointly or deposit the same with the competent authority
according to the law.
3. Each of the creditors shall have recourse, to the extent of his share, against the creditor
who received the right.
Chapter 4
Extinction of Obligation without Settlement
Section 1
Discharge
Article 335
The obligation shall be extinguished if the creditor voluntarily discharges the debtor; such
discharge shall be performed when it is brought to the knowledge of the debtor.
Article 336
The discharge shall not depend on the acceptance of the debtor still, it shall be revoked by
his revocation. If he dies before such acceptance, the debt shall not be settled from his estate.
Article 337
The discharge shall only be valid in reference to an effective debt.
Article 338
Substantive provisions applicable to each contribution shall apply to the discharge; and no
special form shall be required for the same even if it is related to a disposition subject to a
special form in order to be effective as specified by the law or upon the agreement of both
parties.
Section 2
Impossibility of Performance
Article 339
The Obligation shall be extinguished if the debtor proves that the fulfilment thereof became
impossible due to a foreign cause beyond his will.
Section 3
Extinctive Prescription
Article 340
An action for an obligation on the repudiating party shall not be heard against the same by
the lapse of fifteen years without a lawful excuse taking into account any special provisions
thereof.
Article 341
An action for an obligation on the repudiating party shall not be heard against the same
through any claim of a periodic renewal right by the lapse of ten years without a legitimate
excuse. However, an action in relation to due returns in the liability of the possessor in bad
faith and the returns in the liability of the endowment administrator to be paid to the
beneficiary parties shall both not be heard by the lapse of fifteen years without legitimate
excuse unless otherwise provided by a provision.
Article 342
An action upon repudiation and the lack of a legitimate excuse shall not be heard after the
lapse of five years as regards the following rights:
1. The rights due to doctors, pharmacists, attorneys, engineers, experts, professors,
teachers and brokers for services rendered by virtue of their profession or craft and any
expenses incurred thereof.
2. Taxes and fees that must be recovered if paid without right.
3. The rights of merchants and artisans for things provided to persons who do not trade in
said things, and the rights of owners of hotels and restaurants for the accommodation
fees and price of food and whatever is disbursed for the account of their clients.
4. The rights of workers and house servants, daily wage workers and casual workers in
the prices of the supplies provided by them unless otherwise provided by a provision.
Article 343
If an acknowledgement or a deed of any of the rights specified in the previous two Articles
of the present Law is drafted, the lawsuits in their regard shall not be heard after the lapse of
fifteen years from the maturity date thereof.
Article 344
The extinctive prescription shall commence from the day on which the debt becomes due,
and from the time of the fulfilment of the condition if it is conditional, and from the date of
ascertainment of the entitlement of a third party in the action for the liability for third party
claims.
Article 345
A lawsuit shall not be heard if relinquished by the predecessor and the successor thereafter,
and the total of both periods adds up to the period of prescription.
Article 346
The period of prescription shall be suspended whenever a legitimate excuse exists by
which a plea to the non-hearing of the lawsuit becomes impossible. The period of the excuse
shall not be calculated during the fixed period.
Article 347
The period by the lapse of which the lawsuit shall not be heard shall be calculated in days
excluding the first day and shall be completed by the expiry of the last day except when such
day is an official holiday, then it shall be extended to the first business day.
Article 348
If some heirs fail to file the lawsuit related to the right of the deceased within the time
determined for its examination, without a legitimate excuse, and if the remaining heirs have a
legitimate excuse, the lawsuit of the said heirs shall be accepted to the extent of their shares.
Article 349
An acknowledgment by the debtor of the obligation whether expressly or implied, shall
interrupt the period of prescription.
Article 350
The extinctive period shall be interrupted by the judicial claim even if the lawsuit is filed to
another, non-competent court, as well as by notices, seizure or any other judicial measure
carried by the creditor to maintain his right.
Article 351
If the extinctive period is interrupted, a new period, same as the first, shall commence as of
the time of the termination of the effect incurred due to the interruption cause. The right,
regardless of its kind, shall not be forfeited if adjudged by the court by an irrevocable
judgment.
Article 352
Non-hearing of the lawsuit for claiming a right, due to time limitation, shall incur that the
lawsuit shall not be heard with all its accessories even if the fixed extinctive period for the
action for claiming said accessories has not expired.
Article 353
1. The court may not decide to dismiss the lawsuit due to time limitation at its own
discretion,. Such a decision must be made at the request of the debtor or any other
person having an interest in said plea even if not raised by the debtor.
2. The said plea may be raised regardless of the status of the lawsuit even if before the
court of appeal unless it is indicated in the circumstances that the defendant has
renounced such plea.
Article 354
1. A plea on the extinctive period may not be renounced before the ascertainment of the
right to said plea. It is also not allowed to agree that the lawsuit may not be heard after
a period different from the period specified by the law.
2. Every person having the right of disposition of his rights may renounce the plea even if
impliedly after the ascertainment of the right therein provided that said renunciation
shall not be effective against creditors if rendered to their prejudice.
Book 2
Nominate Contracts
Title 1
Ownership Contracts
Chapter 1
The Sale
Section 1
Definition and Elements of Sale
Article 355
A sale is a contract of ownership of a property or a pecuniary right in return of a cash
consideration.
Article 356
The thing sold must be sufficiently definite to the buyer by having its conditions and
distinguishing characteristics described and if the thing sold were present, an indication
thereof shall suffice.
Article 357
If it is stated in the contract of sale that the buyer has sufficient knowledge of the same, he
may not claim for the nullification of the contract due to non-awareness thereof unless it is
proven that the buyer has been deceived.
Article 358
1. If the sale is by sample, the thing sold must be conforming thereto.
2. If it is revealed that the thing sold is not in conformity with the sample, the buyer shall
have the choice to either accept or refuse the same.
Article 359
If a dispute arises between both contracting parties on the conformity of the thing sold to
the sample where the sample and the thing sold are both present, experts’ opinion must be
relied on. In case of damage, loss or deterioration of the sample while in the possession of one
of the contracting parties, the statements of the other party as to the conformity or lack of
conformity thereof shall prevail unless otherwise proven by his litigant.
Article 360
1. The sale may be on trial for a definite period to be agreed upon. If the trial period is not
stipulated by both contracting parties in the contract, the regular period shall apply
thereto.
2. The seller shall commit to enable the buyer to the trial of the same.
Article 361
1. During the trial period, the buyer may ratify or reject the sale even if the thing sold is
not yet tried. It is a condition that the seller be notified in case of rejection.
2. If the trial period is expired, and if the buyer remains silent after being enabled to try
the thing sold, his silence shall be considered an acceptance, and the sale shall be
binding if the thing sold be in his possession.
Article 362
The deterioration of the thing sold while in the possession of the buyer, after being
delivered, shall render said buyer liable to the payment of the specified price to the seller. Yet,
in the case of the deterioration of said thing before the delivery for a reason beyond the will of
the seller, it shall be guaranteed by the seller.
Article 363
The sale shall be effective as of the date of the sale after trial thereof, and consent to the
thing sold.
Article 364
If the buyer loses his legal capacity prior to the confirmation of the sale, his legal tutor,
custodian, or guardian must choose whatever may be in his favor.
Article 365
If the buyer dies prior to declaring his option, and should a creditor have obtained the
property of the buyer in satisfaction of the debt, the right to the trial shall be transferred to the
creditor otherwise said right shall be transferred to the heirs. Should they agree to the
confirmation of the sale or rejection thereof, their agreement shall become binding, yet if
some ratify, where the others reject, the rejection shall prevail.
Article 366
The buyer is not allowed to use the thing sold during the period of trial except to the extent
required for such trial in the common manner. In the case of any excess in such usage
intending other than trial, the sale shall become binding.
Article 367
The provisions of sale on trial shall apply to the sale by tasting.
Article 368
If both parties to the contract of sale agree to setting the price at market price, said market
price shall be the price at the time and place of sale. In case no market is available at the said
place, the applicable prices at other places generally determined by custom shall be
considered.
Article 369
If both contracting parties declare a price contrary to their true agreement, the true price
shall be the one to be considered.
Article 370
1. A sale may be made by way of cost-plus contract “Murabaha”, resale of goods below
the stated cost price “al-wadiah”, or sale at cost price “al-tawliyah” if the capital of the
thing sold is known at the time of contract and where the amount of profit in
“Murabaha” or the amount of loss in “Wadiah” is definite.
2. If it is indicated that the seller has overstated the capital amount, the buyer may reduce
such increase.
3. If the capital value of the thing sold is unknown at the time of contracting, the buyer
may rescind the contract when he becomes aware of the same. The same provision
shall apply if the seller conceals any matter that may affect the thing sold or the capital
thereof; his option shall be extinguished if the thing sold is deteriorated or consumed or
if it is removed from his ownership after taking delivery of the same.
Article 371
1. Any increase in the price by the buyer after the contract is made shall be attached to the
original contract if accepted by the seller, and the specified price with the increase shall
be in return for the whole thing sold.
2. Any decrease in the specified price by the seller after the contract is made shall be
attached to the original contract if accepted by the buyer, and the remaining balance
shall become the specified price.
Article 372
A price shall be paid in advance unless otherwise agreed upon or it is generally accepted
that it be deferred or paid in instalments over a definite period.
Article 373
In the case of a deferred payment or payment in instalments, the period shall start from the
date of taking delivery of the thing sold unless otherwise agreed upon by the two parties.
Article 374
If part of the price is paid by the buyer, he may not demand the delivery of the
proportionate part of the thing sold if such divisibility in the thing sold shall incur a reduction
in its value.
Section 2
Effects of Sale
First: Obligations of the Seller
1- Transfer of Ownership
Article 375
The ownership of a thing sold, whether specified or stock, shall be transferred immediately
after the conclusion of the sale unless otherwise provided by law or agreement.
Article 376
If the thing sold is identified by its kind only, ownership shall be transferred only upon its
partition.
Article 377
The seller shall commit to perform all that is necessary on his part to transfer the ownership
to the buyer.
Article 378
1. In case of deferred payment or payment in instalments, the seller may stipulate that the
transfer of ownership to the buyer shall be conditional upon the payment of the full
price even if the thing sold is delivered.
2. If the price is collected, the ownership of the buyer shall be effective as of the time of
the sale.
2- Delivery of the Sold Property
Article 379
The seller shall commit to deliver the thing sold to the buyer free from any other right
therein unless otherwise provided by an agreement or by a provision of law.
Article 380
The seller shall commit to deliver the thing sold to the buyer in the condition indicated at
the time of the sale.
Article 381
Delivery shall include the appurtenances of the thing sold and any fixtures, what is
permanently intended for its use according to the nature of the thing sold, and what is
generally considered by custom as appurtenances to the thing sold even if not stated in the
contract.
Article 382
The seller, after the delivery of the thing sold to the buyer, shall not be held liable for any
damage to the said thing.
Article 383
If the gauging, weighing, measuring, or counting of the thing sold is specified in the
contract, and variation by decrease or increase appears therein where no agreement or custom
is provided in this regard, the following rules shall be adopted:
1. If the thing sold shall not be damaged by splitting, the increase shall be the right of
the seller who shall be entitled to redeem the same in kind, and in case of any
shortage, the buyer shall have the option whether to rescind the sale or to receive
the proportionate amount of the price.
2. If the thing sold shall be damaged by splitting, and the price thereof be to the
whole stock, and then a shortage therein appears at the time of the delivery, the
buyer may rescind the contract or take the thing sold at the full price. If an increase
is revealed therein; such increase shall go to the buyer. If the price is per unit, and
then a shortage or increase is found in the thing sold, the buyer may rescind the
sale or take delivery of the thing sold at a proportionate amount of the price.
Article 384
An action to the rescission of the contract, or reduction, or completion of price, shall not be
heard by the lapse of one year from the date of taking delivery of the thing sold.
Article 385
Delivery shall be by putting the thing sold at the disposal of the buyer, so as he shall be
enabled to possess and transfer the same without any hindrance, even if no physical delivery
is made, as long as he is notified by the seller of the same. Said delivery shall be performed in
a manner compatible with the nature of the thing sold.
Article 386
If the thing sold is in the possession of the buyer before the sale due to any capacity or
reason, such possession shall be considered delivery thereof unless otherwise agreed upon.
Article 387
If the two contracting parties agree to consider that the buyer has taken delivery of the
thing sold in a certain case or if some cases are considered as delivery as provided by the law,
said delivery shall be considered to be performed as a matter of right.
Article 388
1. The seller shall be bound to deliver the thing sold at the place where it exists at the
time of contract.
2. If the thing sold must be dispatched to the buyer, under an agreement or custom, said
delivery shall only be considered performed when the thing sold reaches to the buyer
unless otherwise agreed upon.
Article 389
If the thing sold is destroyed before the delivery by a reason beyond the will of any of the
contracting parties, the contract shall be cancelled, and the buyer shall recover any payments
made thereof. If part of the thing sold is damaged, the buyer shall have an option either to
rescind the contract or receive the proportionate amount of the price.
Article 390
1. If all or part of the thing sold is destroyed or damaged before the delivery due to an act
by the buyer, he shall be considered to have received the thing sold and bound to the
payment of the price.
2. If the seller has the right of option in said case, and he chooses the remedy of
rescission, the buyer shall warrant to provide the equivalent of thing sold or its value to
the said seller and own the remaining part thereof.
Article 391
1. If the thing sold is destroyed before the delivery due to the act of another person, the
buyer shall have two options; either to rescind the contract or confirm the same, and he
shall have the right to have recourse against the person who damaged the same for a
warranty to provide the equivalent of the thing sold or its value.
2. If part of the thing sold is destroyed before the delivery due to the act of another
person, the buyer shall have the option to either rescind the sale or to receive the
proportionate amount of the price.
Article 392
The seller shall warrant that the buyer will enjoy possession of all or part of the thing sold
without disturbance, whether such disturbance be due to his act, or the act of a third party who
claims a right related to the thing sold at the time of the sale that he raises against the buyer.
The seller shall also be bound to the warrant even if the third party claims a right which has
arisen after the sale should said right have devolved to him due to the act of the buyer.
Article 393
1. If a rei vindicatio action of the thing sold is sought against the buyer, he must notify the
seller of said matter; and the seller; as the case may be, shall intervene in the lawsuit to
the side of the buyer or his subrogee.
2. If a notice is served in the appropriate time, and the seller has not intervened in the
action, he shall be held liable to the warranty except when he proves that the judgment
rendered in the lawsuit was a result of deceit on the buyer’s part or due to a gross error
by the same.
3. If the buyer fails to notify the seller of the action in an appropriate time, and a
judgment is rendered having the force of res judicata, he shall lose his right to have
recourse for the warranty if it is proven by the seller that his intervention in the lawsuit
would have resulted in the dismissal of the rie vindicatio action.
Article 394
1. If the entitlement of a third party to the thing sold is determined thereof, the rightful
owner of the thing sold may have recourse against the seller for the price if he has
confirmed the sale. The thing sold shall be merely owned by the buyer thereof.
2. If the rightful owner has not confirmed the sale, the contract shall be cancelled and the
buyer shall have recourse against the seller for the price.
3. The seller shall provide the buyer with a warranty for any beneficial improvement to
the thing sold, valued at the date of the delivery to the rightful owner, and he shall also
provide him with a warranty against any damages incurred by the rei vindicatio action
of the thing sold.
Article 395
1. A condition to the non-guarantee of the seller of the price when the thing sold is
determined as a right of a third party shall not be valid and shall render the sale void
due to the condition.
2. The knowledge of the buyer that the thing sold in not owned by the seller shall not
prevent the first mentioned from having recourse for the price upon the entitlement of a
third party.
Article 396
If the entitlement of a third party is based on the acknowledgment of the buyer or his
default from taking the oath, he may not have recourse against the seller.
Article 397
1. If a conciliation agreement is made between the buyer and the plaintiff claiming a right
in the property before any judgment in his favor, where the seller denies the right of the
plaintiff, the buyer may prove that the plaintiff has a valid action, and after verification
of the same, the seller shall have the choice either of the payment of the consideration
under the conciliation agreement or returning the price to the buyer.
2. If a conciliation agreement is made after the judgment is rendered in favor of the
rightful owner, the buyer may retain the thing sold and shall have the right to have
recourse against the seller for the price.
Article 398
1. If part of the thing sold is considered a right of a third party prior to the buyer having
received the same in full, he may either return what he has received and recover the
price or accept the sale and have recourse for the proportionate part deemed a right of
the third party.
2. If part of the thing sold is considered a right of a third party after the buyer had
received the same in full, and where such entitlement has incurred damage in the
remaining part, the buyer may either return the same and have recourse against the
seller for the price or hold on to the remaining part by the proportionate amount to the
price. If such entitlement has incurred no damage, and where the part that is considered
a right of a third party is lesser, he may only have recourse for the proportionate part
that is deemed the right of the third party.
3. If a right of a third party appears after the sale, the buyer shall have the choice to either
wait till said right is removed or rescind the contract and have recourse against the
seller for the price.
4. The seller shall not be liable for any right or restriction in the transfer of the thing sold
if he has disclosed the same to the buyer.
Article 399
1. If a rei vindicatio action is brought after the deterioration of the thing sold while in the
possession of the buyer, he shall be liable to the rightful owner of the value of the same
at the time of purchase, and he shall have recourse against the seller for the price.
2. If the value that is guaranteed by the buyer is higher than the specified price, he may
have recourse for the difference in price and the damage incurred due to the entitlement
of a third party to the thing sold.
Article 400
The rightful owner may claim the buyer for the returns or yields of the thing sold after
deducting the necessary costs for the production. The buyer shall have recourse against the
seller for the payments made to the rightful owner.
3- Warranty of latent Defects (Option of Defect)
Article 401
The seller shall not warrant a defect that is tolerated in accordance with the custom.
Article 402
Without prejudice to the provisions of the following Articles, the general rules on the
defect option shall apply to the contract of sale.
Article 403
1. If a latent defect is discovered in the thing sold, the buyer has the choice either to
return or accept the same at the specified price.
2. A defect shall be considered latent if it was present in the thing sold before the sale, or
if it arises after the sale yet while in the possession of the seller before the delivery
thereof.
3. A defect that arises while with the buyer shall be considered as latent if it is based on
an old cause present in the thing sold while with the seller.
Article 404
The seller shall not be held liable for a latent defect in the following cases:
1. If the seller has disclosed the defect of the thing sold to the buyer at the time of
sale.
2. If the buyer purchases the thing sold while being aware of the defect therein.
3. If the sale is carried out by public auction by the judicial or administrative
authorities.
Article 405
If the buyer disposes of the thing sold acting as an owner after being aware of the latent
defect, the right to the defect option shall lapse.
Article 406
If the thing sold is defective by a latent defect and perishes while in the possession of the
buyer or if he has consumed the same before being aware of the defect, he shall have recourse
against the seller for price reduction due to the defect.
Article 407
1. If a new defect arises in the thing sold while in the possession of the buyer, he may not
return the same due to the latent defect, yet he may claim the seller for the price
reduction unless the seller accepts to take the same with the new defect.
2. If the new defect is eliminated, the buyer shall restore his right to return the thing sold
to the seller by reason of the latent defect.
Article 408
1. If an increase that prevents the same from being returned occurs in the thing sold, and
then a latent defect is discovered by the buyer, he may have recourse against the seller
for the reduction in value caused by the defect. The seller shall not have the right to
recover the thing sold.
2. The stopping increase shall be every property of the buyer connected to the thing sold
by an inseparable connection.
Article 409
1. If several things are sold by the same transaction, and a defect is discovered in some of
the things sold before the delivery, the buyer shall have the choice either to accept the
things at the specified price or return all the things.
2. If several things are sold by the same transaction, and a latent defect is discovered in
some of the things sold after the delivery; and if partition of the same shall not incur
any damage, the buyer shall have the choice to return the defective things in proportion
to the price but he may not return the whole without the consent of the seller. If the
partition of the same shall incur damage; he may return all the things sold or accept the
same at the whole price.
Article 410
1. An action for the warranty against defect shall not be heard after the lapse of one year
from taking delivery of the thing sold unless the seller is bound by a longer warranty
period.
2. The seller may not raise a plea of said period if it is proven that the defect is hidden due
to an act of deceit from his part.
Second: Obligations of the Buyer
1- Payment of the Price and Receipt of the Sold Property
Article 411
The buyer must pay the price first, at the time of contracting, and before taking delivery of
the things sold or making any claim for the same, unless otherwise agreed.
Article 412
1. If the buyer receives the thing sold before payment of the price in the full view of the
seller who has not stopped said receipt, such a matter shall be considered a permission
of delivery.
2. If the buyer receives the thing sold before payment of the price without the permission
of the seller, the seller shall have the right to recover the same. In case of its
deterioration or damage while in the possession of the buyer, he shall be considered as
having taken delivery unless the seller is willing to recover the same with the defect
therein.
Article 413
The damage of the thing sold incurred by the buyer even if without intention, shall be
considered a receipt of the same.
Article 414
If the thing sold was not present at the place of the contract at the time of contracting, and
if the buyer was not aware of it at the said time, and then becomes aware of the same later on,
he shall have the choice either to rescind the sale or ratify the same and take delivery of the
thing sold at the place where it exists.
Article 415
1. The buyer shall be bound to hand over the payment in advance at the place where the
thing exists at the time of contract unless otherwise provided by agreement or custom.
2. If the price is a deferred debt in the liability of the buyer, and where no agreement is
made to the payment of it in a certain place, it shall be paid at the domicile of the buyer
at the time of maturity.
Article 416
1. If the buyer is disturbed in his possession by any person relying on a right previous to
the sale or one that has devolved to him from the seller, or if the buyer fears, for
serious reasons, that the thing sold shall be recovered by a third party, the buyer may
detain the price until the disturbance is ceased or the risk of recovery by a third party is
eliminated unless otherwise stipulated in the contract. However, the seller in this case
may claim for the collection of the price.
2. The provision of the previous Paragraph shall be applicable in case a latent defect in
the thing sold which is guaranteed against by the seller is discovered by the buyer.
Article 417
If a specific time limit for the payment of the price is determined in the sale, and it is
stipulated therein that the sale shall not be effective unless the buyer pays the price during the
said period. In case of default and the thing sold being still in the possession of the seller, the
sale shall be considered cancelled by law.
Article 418
1. If the buyer took delivery of the thing sold, then died insolvent before payment of the
price, the seller may not recover the thing sold. The price shall be considered a debt on
the estate, and the seller deemed equal to other creditors.
2. If the buyer died insolvent before taking delivery of the thing sold and payment of the
price, the seller may detain the thing sold until he receives the price. He shall have
priority over other creditors for the collection of the price thereof.
3. If the seller received the price then died insolvent before the delivery of the thing sold,
the same shall be considered a trust in his possession and the seller shall have priority
over other creditors.
2- Sale expenses
Article 419
The costs of the delivery of the price and the contract of the sale and registration thereof
shall be borne by the buyer, and the costs for the delivery of the thing sold shall be borne by
the seller unless otherwise provided by agreement, law, or custom.
Section 3
Various sales
1- Sale with Delayed Delivery “Al-Salam Sale”
Article 420
“Al Salam” refers to the sale of property for a deferred delivery in exchange for immediate
payment.
Article 421
The object of “al-salam” sale, “al-mussallam fihi,” must be of known kind, quality,
capacity and quantity, and must be capable of being recognized by description.
Article 422
It is also a condition that the object of “al-salam” sale, “al-mussallam fihi,” must be
possible to exist at the time of maturity.
Article 423
The capital must be known to the contracting parties and settled at the time of contracting.
Article 424
The buyer may not dispose of the object of “al-salam” sale, “al-mussallam fihi,” before
receiving the same.
Article 425
The capital of “al-Salam” and the object of “al-salam” sale, “al-mussallam fihi,” may not
be either foodstuffs against foodstuffs or money against money; it shall suffice in other than
foodstuffs that they be different in kind and benefit.
Article 426
If the payment time limit becomes due as regards the object of “al-salam” sale, “almussallam fihi,” it must be delivered in the place agreed upon, in the case where no
agreement is found, it must be delivered in the place where the contract is concluded.
Article 427
If it is revealed impossible to deliver the object of “al-salam” sale, “al-mussallam fihi,”
because of the non-existence of its kind at the time of maturity, the buyer “al-mussallam” may
rescind the contract and restore the capital value.
2- Al-Takharuj
Article 428
The heir may sell his share in the estate after the death of the deceased to another heir or
more for a specified consideration even if the assets of the estate are not specified.
Article 429
1. “Al-Takharuj” contract shall transfer the inheritance share of the seller to the buyer
who shall be subrogated to the entitlement to the share of the seller in the estate.
2. “Al-Takharuj” contract shall not include any property belonging to the deceased that
becomes known after the contract even if the two parties to “Al-Takharuj” contract
were not aware of the same at the time of contract.
3. “Al-Takharuj” contract shall not include the rights in the estate against one or both of
the contracting parties to “Al-Takharuj” contract or the rights in the estate in favor of
one or both of them.
Article 430
The seller shall warrant to the buyer no more than the existence of the estate and the
ascertainment of his inheritance share therein if the contract is concluded without detailing the
content of the estate.
Article 431
The buyer must adopt the measures required by law for the transferring of a right that is
comprised of the inheritance share subject of “Al-Takharuj”.
3- Sale during Terminal Illness
Article 432
1. Every legal disposition issued by a person during terminal illness, and which
intentionally directs contribution, shall be considered effective only after the death, and
subject to the provisions of the will regardless of the name granted to such disposition.
2. The heirs of the person who made the disposition must prove that the legal disposition
is issued by their heir during his terminal illness and they may prove such a matter by
all means.
3. If the heirs prove that the disposition is made by the deceased during his terminal
illness, said disposition shall be considered as to have been made on the basis of
contribution, unless the contrary is proven by the beneficiary of the disposition.
Article 433
A sale made by the ill person to a stranger at a price less than the value of the same even if
with minor lesion shall have no effect on the creditors if the estate is encumbered by debts;
the buyer may pay the value of the same, otherwise, the creditors may rescind the contract.
Article 434
It is not allowed to cancel a sale made by an ill person if the buyer has disposed of the
thing sold by an act which gave a bona fide person a right in rem in the thing sold in return for
a consideration. In this case, the creditors of the estate encumbered by debts may have
recourse against the buyer who purchased from the ill person to the difference between the
price and the value of the thing sold. The heirs shall have said right if the buyer is one of
them; if he is a stranger, he shall be required to return up to two–thirds of the value of the
thing sold to the estate.
4- Sale of Disputed Rights
Article 435
1. The sale of disputed rights shall be void.
2. The right shall be deemed disputed if its subject-matter was the subject-matter of a
lawsuit or where a serious dispute in its regard has arisen.
Article 436
Judges, members of the public prosecution, attorneys or courts officials may not buy either
in their names or under an assumed name a disputed right whether in whole or in part if
examination of the dispute is within the jurisdiction of the court in the circuit of which they
carry out their duties under penalty of the nullity of the sale.
Article 437
The attorneys may not deal with their customers in the disputed rights should they be
handling the defence thereof whether in their names or under an assumed name, otherwise the
contract shall be void.
5- Sale by the Representative to himself
Article 438
Without prejudice to the special laws, an agent acting on behalf of others either by a
provision of law, an agreement, or an order from the competent authority, may not buy for
himself, whether directly or under an assumed name even if through auction, whatever is
entrusted to him under such agency.
Article 439
Brokers or experts may not buy, whether in their names or under an assumed name, the
property that they are assigned to sell.
Article 440
Notwithstanding the provisions stated in the two preceding Articles, the agent, broker, or
expert may buy for himself if he is so allowed by the principal or concerned party in this
regard.
6- Sale of the Property of Third Parties
Article 441
The sale of the property of another person made by a person without the permission of the
first said shall be conditional on the permission of the owner. If the owner ratifies the sale;
said contract shall be effective against him, as well as against the buyer. In addition to that,
said contract shall become effective if the ownership of the thing sold has been transferred to
the seller after the contract is made.
7- Barter
Article 442
Barter is a contract for the exchange of property or a pecuniary right to a consideration
without the use of money as currency.
Article 443
Each of the two contracting parties to the barter shall be considered a seller of the thing that
is bartered, and a buyer of the other thing bartered for.
Article 444
If a variation in the value of both goods offered for barter as assessed by the two
contracting parties is established, they may agree to compensate for the difference by a sum
of money.
Article 445
The costs of the barter contract and other costs shall be equally divided between the two
parties to the contract unless otherwise agreed.
Article 446
The provisions of sale shall apply to the barter for all that is not inconsistent with its nature.
Chapter 2
Donation
Section 1
Definition and Elements of the Donation
Article 447
Donation is a contract by which the ownership of a right shall be transferred to another
during the life of the owner without consideration.
Article 448
Without prejudice to the intention of contribution, the donor may require that the donee
must fulfill a certain obligation; such obligation shall be considered a consideration.
Article 449
1. The donation shall be concluded by the offer and acceptance and completed by the
receipt thereof and the completion of the procedures specified by the law for the
transfer of ownership.
2. Mere offer shall suffice if the donor is the legal tutor of the donee or his custodian, and
if the donated property is in his possession; same as if the donee is a minor and the
donor responsible for his education.
Article 450
A contract of donation shall not be effective if the donated property is not owned by the
donor unless approved by the owner and where the receipt is carried out with his consent
thereof.
Article 451
A donation of a debt to the donee shall be valid, and considered a discharge; it shall also be
valid to other than the debtor and shall become effective if the debtor pays the debt to the
donee.
Article 452
1. The consideration must be known in a conditional donation, otherwise the parties may
rescind the contract even if after the receipt of the donated property, unless the
consideration is agreed upon before the rescission.
2. If the donated property perishes or if it is disposed of by the donee before the
rescission, he shall be required to return its value at the time of receipt.
Article 453
If any of the parties to the contract of donation dies or if the donor becomes insolvent
before the donee has received the donated property, the donation shall be annulled.
Article 454
A donation that is made during terminal illness shall be governed by the provisions of the
will.
Section 2
Effects of the Donation
First: In respect of the Donor
Article 455
The donor shall commit to the delivery of the donated property to the donee. The
provisions applicable to the delivery of the thing sold shall be followed therefore unless
otherwise agreed upon.
Article 456
The donor shall not warrant the rei vindication action of the donated property while in the
possession of the donee if the donation is concluded without consideration; however, he shall
be responsible for any damage that may be incurred by the donee as a result of the said
entitlement of a third party if he has deliberately concealed the cause of the entitlement. If the
donation is made for a consideration, he shall not warrant the entitlement of a third party
unless to the extent of the consideration paid by the donee, as long as no agreement to the
contrary is provided.
Article 457
If the donated property is considered the right of a third party after it has perished while in
the possession of the donee, and where the rightful owner chooses to pursue him, said donee
may have recourse against the donor for his liability to the rightful owner.
Article 458
If the donated property is considered the right of a third party, and the donee had increased
said property from which it cannot be separated without damage, the rightful owner may not
recover the same before payment of the value of the excess amount.
Article 459
A donee shall not be held liable for a defect hidden in the property donated even if he has
deliberately concealed the same unless the donation is concluded for a consideration.
Second- In respect of the donee
Article 460
A donee must pay the consideration as stipulated by the donor.
Article 461
1. If the donor has stipulated that settlement of his debts shall be in return for the
donation, the donee shall only be bound to the settlement of the debts as determined by
the contract.
2. If the donated property is encumbered by a right in rem as a guarantee of a debt in the
liability of the donor, or any other person, the donee shall be bound to the settlement of
this debt unless otherwise provided by agreement.
Article 462
The costs of the contract of donation and the expenses incurred for the delivery and transfer
of the donated property shall be borne by the donee unless otherwise agreed upon.
Section 3
Revocation of the Donation
Article 463
A donor may not revoke a donation without the consent of the donee after possession has
been taken, unless the donee is a child.
Article 464
A donor may restore the donation if the right of recovery of the same is stipulated in the
contract in case the donee fails to perform certain obligations in favor of the donor or
whoever he is concerned for. If the donated property perishes due to an act by the donee or if
he has disposed of the same, the donor shall be entitled to the value of the same at the time of
disposition or loss.
Article 465
A revocation of the donation shall not be allowed in the following cases:
1. If the donee has disposed of the donated property by way of transfer of ownership
thereof. If such disposition is restricted to a part of the donated property, the donor may
revoke any remaining part.
2. The death of one of the parties to the contract after taking possession of the donated
property.
3. The deterioration of the donated property while in the possession of the donee; in case
of partial loss, the remaining part may be revoked.
4. If the donation is for a consideration.
5. If the donation is an alms or to any charitable organization.
6. If the debt is donated to the debtor by the creditor.
Article 466
A donee shall not be obliged to return fruits unless from the date of revocation by consent
or from the date of judgment; he may recover the necessary costs. However, other costs shall
not be recovered except those that resulted in the increase in the value of the donated
property.
Article 467
1. If the donor has recovered the donated property without consent or without a court
order, he shall be held liable for the deterioration regardless of its cause.
2. If a judgment for the revocation of the donation is rendered, and if the donated property
has perished while in the possession of the donee after being claimed for the same and
his abstention from the delivery, the donee shall be held liable for the deterioration
regardless of the cause thereof.
Chapter 3
The Partnership
Section 1
General Provisions
Article 468
Partnership is a contract entered into by two or more persons in which each of them agrees
to furnish a part of the capital or work for a business enterprise, and by which each of them
shares profits and losses resulting thereof.
Article 469
1. A partnership shall be considered a juristic person merely by its setting up; such
personality shall not be invoked against third parties except after fulfilment of the
registration procedures and publication as specified by law.
2. Third parties may raise a plea based on the said personality irrespective of the nonfulfilment of the above-mentioned procedures.
Article 470
1. A partnership contract must be made in writing.
2. If the contract is not written, such a matter shall have no effect on the right of a third
party. However, in reference to the partners themselves, the contract shall be
considered valid unless one of them pleads for its non-validity, where such a matter
shall apply to the said contract as of the date of filing the lawsuit.
Article 471
1. It is a condition that the capital of the company be currency or the like of which is
carried in trading; in case it be not money, its value must be appraised.
2. The shares of the partners may be equal or variable; yet the share of a partner must
neither be what is owed to him by a third party, nor be restricted to the influence or
financial confidence that the partner enjoys.
Article 472
1. The share of a partner in a partnership may be a right, ownership, a benefit to be
derived therefrom, or any other right in rem; the provisions of the sale shall apply to
said share in reference to liability in case of its deterioration, if it be deemed a right of
a third party, or for any defect or deficiency therein.
2. If the share is merely a benefit to be derived from the property, the provisions on the
lease shall be applicable thereto.
3. If the said share is a work; the partner must render the services undertaken by him in
the contract.
Article 473
1. The profits and losses shall be distributed in the manner stipulated in the contract.
2. If the partnership contract is silent as to the shares of each of the partners in the losses
and profits, they shall be distributed in proportion to their shares in the capital; no
agreement to the contrary shall be considered.
Article 474
1. The partners may not stipulate in the contract that any of them shall have a profit as a
lump-sum of money; such condition shall be annulled and the profit shall be distributed
in accordance to the share of each of them in the capital.
2. If it is agreed upon in the contract that one of the partners shall neither benefit from the
profits of the company nor participate in the losses thereof, said partnership contract
shall be void.
Article 475
1. If the share of a partner is limited to his work, his share of profit shall be according to
the benefit expected to be derived to the company from said work; if he submits money
or any other thing in addition to his work, he shall have one share for the work
provided and another for what he has provided in addition to the work unless otherwise
agreed upon.
2. The partner who has provided his work only as a share shall be exempted from
participating in the losses on condition that no wage is granted to him for his work.
Section 2
Management of the Company
Article 476
1. Every partner shall be considered an agent of the other partners in carrying out the
business of the partnership and achieving the purpose for which it is established unless
otherwise provided by provision or agreement.
2. Every partner shall be considered as a trustee for the property of the company which is
in his possession.
Article 477
1. If it is agreed in the partnership contract that one of the partners shall act on behalf of
the partnership and manage its business, he shall be conclusively deemed to have the
authority to act in whatever is included within that representation as well as any
relevant necessary incidents.
2. If the representation is given to more than one partner where they are not authorized to
act individually, they must act jointly except in such matters where there is no need for
the exchange of opinions or when dealing in an urgent matter whereby damage shall be
incurred to the company if not managed.
3. It is not allowed to either dismiss whoever is agreed upon in the partnership contract to
be appointed as a representative of the company nor restrict such representation
without justification as long as the partnership exists.
Article 478
1. A manager to the company may be appointed from among the partners or others with
or without remuneration.
2. The manager may act within the limits of the purposes of the partnership as entrusted
to him provided that he shall abide by the provisions of the contract, otherwise, as
applicable by custom.
3. If a manager acts beyond the scope of his powers, he shall be held liable for any
damage to the company resulting from his act.
Article 479
1. Several managers may be appointed to the partnership provided that the functions of
each shall be specified.
2. The managers, or one of them, may be dismissed in the same way by which they were
appointed.
Article 480
A person who is appointed to act on behalf of the company or as a manager thereof, may
not dismiss himself or resign at a time that may incur damage to the company.
Article 481
Partners other than managers shall not have the right of management but they are entitled
to review, either by themselves or through their representatives, the books and documents of
the partnership; any agreement to the contrary shall be void.
Article 482
A partner who is entitled to manage the interests of the company, shall be bound to exert
for said purpose the care which he uses in managing his own interests unless he be assigned to
the work for remuneration. However, he may not act with care less than the care of an
ordinary person. He shall also be bound to refrain from any act that may incur damage to the
company or is contrary to the purpose for which it was established.
Section 3
Effects of the Company
Article 483
A partner may neither detain any property of the company for himself nor use the same for
his own account; otherwise he shall be held liable to compensate the company for the damage
sustained thereof as a result of such a matter.
Article 484
If the company is encumbered by a debt that is relevant to the purposes of the partnership
and where the assets of the same are not sufficient, the partners shall be held personally liable
for the balance of the debt in their own assets to the extent of their shares in the partnership’s
loss; but, if it is stipulated in the partnership contract that the partners are jointly liable, they
shall all be jointly liable for the debt.
Article 485
If one of the partners is indebted to another by a personal loan, his creditor may not satisfy
his right out of the share of said partner in the capital before the dissolution of the partnership.
However, he may satisfy his debt from the profit belonging to the debtor. After the dissolution
of the partnership, he may satisfy his right from the share of the debtor in the capital.
Nevertheless, a sequestration may be levied by the personal creditor of the partner at the
hands of the liquidator against what shall devolve to the debtor at the time of dissolution.
Section 4
Termination of the Company
Article 486
The partnership shall be terminated due to any of the following matters:
1. The end of the duration thereof or the work for which it is established.
2. Loss of the capital or the loss of the capital provided by one of the partners before the
delivery thereof.
3. The death of one of the partners, his being interdicted, becoming insolvent or bankrupt.
Nevertheless, it may be agreed that the partnership shall continue between the other
partners, with the representative of the partners lacking capacity or who lost their legal
capacity, or with the heirs of the deceased even if they were minors.
4. The unanimous consent of all the partners for the dissolution of said partnership.
5. The issuance of a judicial order for its dissolution.
Article 487
1. The duration of a partnership may be extended before the term set for its duration
expires, and shall constitute a continuation of the partnership. Yet, if the duration of the
partnership is extended after the term set for its duration has expired; this shall be a
new partnership.
2. If the term set for the partnership has expired or if the work for which it is established
was terminated, and yet the partners continue their business; this shall be considered an
implied extension of the partnership in its first conditions but for an indefinite period.
3. A creditor of one of the partners may object to the extension of the partnership; such
objection shall result in that said extension shall not affect his right.
Article 488
The court may order the dissolution of the partnership at the request of one of the partners
for a default in fulfilling the obligations undertaken by another partner or if the latter said has
incurred significant damage to the company.
Article 489
1. If the term of the partnership is not specified, any of the partners may withdraw from
said partnership provided that he serve a notice of his intention to the other partners
before at least six months from the date on which it shall be effective; otherwise, his
withdrawal shall be considered as carried out at an inappropriate time.
2. The withdrawal of a partner from the partnership shall result in the termination of the
partnership unless otherwise agreed upon.
Article 490
1. Any partner may apply to the court for the dismissal of any of the partners whose
presence has incurred objection to the extension of its term or whose acts are
considered justified cause for the dissolution of the company provided that the
partnership shall remain between the others.
2. Any partner relying on reasonable grounds may apply to the court to order his
dismissal from the partnership if said partnership is for a definite period; in this case,
the partnership shall be dissolved unless the other partners agree to the continuance
thereof.
Section 5
Dissolution and Partition of the Company
Article 491
Dissolution of the property of the partnership and any partition of the same shall be carried
out in the manner agreed upon by the partners; in case of no agreement to this effect, any of
the concerned parties may apply to the court for the designation of one or more liquidators to
conduct the dissolution and the partition.
Article 492
1. The partnership shall retain its juristic personality to the extent necessary for the
dissolution.
2. The manager or the managers of the partnership shall be deemed the same as
liquidators in reference to third parties until the designation of a liquidator.
Article 493
1. A liquidator shall perform all dissolution activities such as to take stock of the assets of
the partnership, satisfy its rights, settle its debts, and sell its property until the assets are
prepared to be partitioned in compliance with the restrictions stated in the order of his
designation; he shall not conduct any activity which is not required for the dissolution.
2. In case of several liquidators, each liquidator shall not be allowed to work individually
unless permitted to do so in the order of his designation or in a subsequent order.
Article 494
1. The assets of the partnership shall be distributed among the partners after the
settlement of the rights of the creditors and retaining an amount to settle the debts
which are not yet due or which are disputed, as well as paying the costs arising from
the dissolution.
2. Every partner shall be given an amount which shall be in proportion to his share in the
capital and he shall be given a profit and bear the loss in proportion to his share in the
capital.
Article 495
The rules related to the partition of the common property shall be followed for the partition
of partnerships.
Chapter 4
Loan Contract
Article 496
A loan is a contract by which the ownership of a property or another thing in kind shall be
transferred provided that the borrower returns the same in quantity, quality and kind at the
end of the loan.
Article 497
1. The loan contract shall become effective only upon the delivery of the property or the
thing borrowed and where the like shall be proven to be in the liability of the borrower.
2. In case the property or the thing borrowed perishes before the delivery to the borrower,
such loss shall be borne by the lender.
Article 498
1. A lender must have the legal capacity to donate and the borrower must have the legal
capacity to undertake obligations.
2. The legal tutor, custodian, or guardian shall not have the right to either lend or borrow
a property from the person who is under his authority.
Article 499
It is a condition that the property or the thing borrowed must be in kind and possible to be
consumed.
Article 500
If the property or the thing borrowed is considered the right of a third party, the lender shall
not be held (missing word) except if he has deliberately concealed the cause of the
entitlement; in this case, the court shall estimate a fair compensation to be granted to the
borrower for the damage sustained thereof.
Article 501
If the loan has a term, the borrower may not recover the same before the due date; if no
term is set therefore, the court shall estimate an appropriate time limit for restitution.
Article 502
1. The lender shall commit to return the like of what he has received in quantity, kind and
quality upon the termination of the term of the loan and no consideration shall be given
to any change in its value; all this at the time and place agreed upon.
2. If it is impossible to return the same as the property or the thing lent, the right of the
lender shall be transferred to its value on the day of the receipt.
Article 503
If several persons have borrowed a property and one of them received the same with the
consent of the others, none of them shall be allowed to demand of the person who has
received the loan except to the extent of his share in what was received.
Chapter 5
Conciliation Contract
Article 504
Conciliation is a contract where y the two parties thereof settle a present dispute or avoid a
possible dispute in matters that may be subject to conciliation.
Article 505
1. A person who enters into conciliation must have the capacity of disposition for a
consideration as regards the rights comprised by the conciliation contract.
2. The legal capacity to donate is required if the conciliation includes a waiver of any of
the said rights.
Article 506
A conciliation made by a child at the age of reason or by an imbecile who are authorized to
do so shall be considered valid if beneficial; the same provision shall apply to the conciliation
made by legal tutors, custodians, and guardians.
Article 507
The subject-matter of the conciliation must be such that a consideration may be taken in
return thereof and must be definite in reference to what needs to be received or delivered.
Article 508
1. A consideration in return for the conciliation must be known if it needs to be received
or delivered.
2. If the consideration in return for the conciliation is a property, object or benefit
belonging to a third party, the effectiveness of the conciliation shall depend on the
permission of said third party.
Article 509
1. Rights may be submitted to conciliation whether the defendant admits or denies the
same or remains silent whereby no admission or denial is provided.
2. If the conciliation is made in the case of admission in return for a specific consideration
to be paid by the confessor, it shall be deemed a sale; and if made in return for a
benefit, it shall be deemed a lease.
3. If the conciliation is made upon denial or silence, it shall be deemed a commutative
contract in reference to the plaintiff, and in lieu of oath and cessation of litigation in
reference to the defendant.
Article 510
A person who concludes a conciliation on part of the thing claimed shall be regarded as
having relinquished his right to claim for the rest.
Article 511
If two persons who both claim the possession of what is in the possession of the other,
enter into a conciliation such that each shall retain what he has in his possession, the
provisions related to the barter shall apply to the conciliation.
Article 512
1. Conciliation shall result in that the right of the conciliating party shall be transferred to
the consideration that is the subject-matter of the conciliation and the relinquishment of
his right that was the subject-matter of the dispute.
2. Conciliation shall be binding to both parties, and neither of them nor their heirs may
revoke said conciliation.
Article 513
The effect of conciliation shall be restricted to the rights comprised therein and the
settlement of the dispute thereof with the exclusion of other matters.
Article 514
The two parties to the conciliation may rescind the said contract by mutual consent if it is
regarded as a commutative contract; the same may not be rescinded if it includes the
relinquishment of some rights.
Article 515
Conciliation shall be subject to the provisions that govern the most similar contract thereto
as to its validity and the resulting consequences thereof.
Part 2
Usufruct Contracts
Chapter 1
Lease
Section 1
The Lease in General
Article 516
The lease is a contract whereby the lessor shall enable the lessee to enjoy a certain thing for
a specified period in exchange for a definite consideration.
Article 517
The full legal capacity of the contracting parties at the time of contract is required for the
conclusion of the lease.
Article 518
1. For the effectiveness of the contract, the lesser or his representative must be an owner
having the right to dispose of the leased property.
2. The lease which is concluded by the officious intermeddler shall be dependent on the
permission of the owner of the right of disposition under the required conditions.
Article 519
The subject-matter of the lease is the benefit, and the delivery of the same shall be achieved
by the delivery of the object thereof.
Article 520
It is a condition that the benefit that is the subject matter of the contract be:
1- Capable to be satisfied.
2- Sufficiently definite to settle the dispute.
Article 521
The rent must be specified by the designation of its kind and value if constituted of money,
and by the statement of its kind, description and determination of its amount if constituted of
other than money.
Article 522
1. The rent may be in kind, debt or benefit in addition to whatever is acceptable as a price
in a sale.
2. If the rent is unknown, the contract may be rescinded and a payment on quantum
meruit basis shall be required for the period preceding the rescission.
Article 523
The rent shall be due upon the receipt of the benefit or the ability to receive the same.
Article 524
A condition to the payment of the rent in advance, the postponement of the same, or the
payment in installments at specified periods shall be valid.
Article 525
1. If the contract fails to state the time of payment of the rent, the rent amount specified
for the benefit shall be due absolutely after the receipt of the benefit or after achieving
the ability to the receipt of the same.
2. The custom that is applicable to the rent due on the basis of units of time shall be
adopted as to the dates of payment; otherwise it shall be determined by the court at the
request of the concerned party.
Article 526
The rent shall not be due for a period that has lapsed before the delivery of the leased
property except where the lessee was the causer of said matter.
Article 527
The term of the lease shall run from the date agreed upon in the contract. In case it is not
determined, it shall be from the date of the contract.
Article 528
A lease that is concluded for a future date shall be valid and binding under the contract
unless the thing leased is trust property or the property of an orphan, where it shall not be
valid if made for a future date that exceeds one year.
Article 529
If the lease contract terminates, and yet the lessee is still benefitting from the leased
property with the knowledge of the lessor without his objection thereto, the lease shall be
considered as renewed under the first terms until the time at which one of the two parties to
the contract requests that the thing leased be released.
Article 530
The lease in reference to trust property or the property of an orphan shall not be valid if
made for a period in excess of three years except with the permission of the competent court;
if the lease is concluded for a longer period, it shall be reduced to three years.
Section 2
The Obligations of the Lessor
Article 531
1. The lessor must hand over the thing leased as well as all its accessories in a usable
condition to satisfy the full intended benefit thereof.
2. The delivery shall be by enabling the lessee to take possession of the thing leased
without hindrance that may disturb his enjoyment thereof; also, the possession shall be
continuous until the termination of the lease term.
Article 532
The lessor may refrain from handing over the thing leased until he receives the rent in
advance.
Article 533
1. If a lease contract is on a specified property for a gross rent, and the statement of the
number of units thereof without stating the rent per each, and the quantity of said units
is revealed to be greater or lesser; the rent shall be the one specified in the contract
without increase or decrease; in case of decrease, the lessee shall have the option to
rescind the contract.
2. If the rent of each unit is specified in the contract, the lessee shall be bound by the rent
specified for the excess units, and the lessor shall be bound to reduce the specified rent
as regards the missing units; in both cases, the lessee shall have the option to rescind
the said contract.
3. If the amount of increase or decrease is minor, and where it has no effect on the
intended benefit, the lessee shall have no option.
Article 534
The effects of the delivery of the sold thing shall apply to the delivery of the thing leased
and its accessories unless otherwise agreed upon by the two parties.
Article 535
1. The lessor shall be bound to repair any damage in the leased property that may affect
the receipt of the intended benefit; in case of his default, the lessee may rescind the
contract or obtain the permission of the court to perform such repairs and have recourse
against the lessor for the expenses incurred to the customary extent.
2. If the damage that the lessor is obliged to repair is considered among the simple or
urgent matters that bear no delay according to custom; and the lessee requested such
repair, yet the lessor defaults or if it is impossible to communicate with him, the lessee
may repair the same and deduct said expenses from the rent to the customary extent.
Article 536
If constructions or repairs are made by the lessee with the permission of the lessor to the
benefit of the thing leased or for the maintenance thereof, he shall have recourse against him
for the expenses even if such recourse is not stipulated. However, if the repairs pertain to the
personal benefit of the lessee, he may not have recourse against the lessor unless otherwise
agreed.
Article 537
The lessor may prevent the lessee from any act that may result in damage to or change in
the leased property, or from placing equipment and devices that may harm the same or reduce
its value; and if the lessee fails to refrain, the lessor may apply to the court for the rescission
of the contract and compensation for the damage that was caused by such trespass.
Article 538
The lessor may neither disturb the lessee in the enjoyment of the benefit during the lease
term, nor incur any changes to the thing leased that prevent such enjoyment or cause
prejudice to the enjoyment in the benefit that is the subject-matter of the contract, otherwise
he shall be held liable for any damage thereof.
Article 539
If the disturbance resulted in depriving the lessee of the enjoyment of the leased property in
accordance with the contract, the disturbed lessee may apply for rescission and the recovery
of the paid rent equal to the deprivation period.
Article 540
1. The lessor shall warrant all the defects of the leased property to the lessee that prevent
from enjoyment or incur gross deficiency therein. However, he shall not warrant
defects that are tolerated in accordance with custom.
2. The lessor shall not warrant the defect if the lessee was aware of the same at the time
of contracting.
Article 541
If the defect has resulted in that the lessee was deprived from the enjoyment of the thing,
he may apply for the rescission and recovery of the payments thereof.
Article 542
The existence of a defect shall be governed by the provisions that apply to the defect option
in the sold thing, if not inconsistent with the nature of the lease.
Article 543
Any agreement that disturbance or defect shall be exempt from warranty shall be void.
Section 3
The Obligations of the Lessee
Article 544
1. The leased thing is a trust in the hands of the lessee who shall be liable for any
deficiency, damage or loss resulting from his trespass against or negligence thereof;
and he shall be required to maintain the same with the diligence of an ordinary person.
2. In case of several lessees, each of them shall be held liable for the damages resulting
from his trespass or negligence.
Article 545
The lessee may not overcome the bounds of the benefit agreed upon in the contract while
using the same. In the case of a lack of agreement to this effect, it must be enjoyed in
accordance with the purpose for which it is intended and in the manner approved by custom;
if such enjoyment has crossed the limits of the agreement or violated the applicable custom,
he shall be required to compensate for the damage incurred by reason of his act.
Article 546
1. The lessee may not incur any changes to the leased property without the permission of
the lessor unless such change is required by said leased property and shall not inflict
damage to the lessor.
2. If the lessee has violated such prevention, he shall be required, at the time of
termination of the lease, to restore the thing leased to status quo ante unless otherwise
agreed upon.
Article 547
1. The lessee shall be obliged to carry out the restorations agreed upon or charged with
according to the applicable custom.
2. The lessee must, during the lease term, commit to clean the thing leased and remove
any dust or dirt therein as well as any matters of which he is charged with according to
the applicable custom.
Article 548
1. The lessee may not prevent the lessor from carrying out the necessary works for the
maintenance of the leased property.
2. If such works have resulted in a prejudice to the enjoyment of the lessee, the latter said
shall be entitled to rescind the contract unless he continues to be satisfied with the
benefit while being silent until the termination of the maintenance works.
3. If the lessor has fixed the thing leased before rescission, the lessee shall be discharged
from the rent to the extent of loss of the enjoyment that he has sustained; and he shall
not have the right of option.
Article 549
1. In case of total loss of enjoyment from the leased thing, the lessee shall be discharged
from the payment of the rent during the period of the loss of enjoyment; and the lease
shall be cancelled at the total loss of the thing leased.
2. In case of partial loss of enjoyment from the leased property in a manner that affects
the receipt of the intended benefit, the lessee shall have the right to rescind the contract,
and the rent shall be extinguished from the date of rescission.
Article 550
1. If any matter is issued by the competent authorities that prevents the total enjoyment of
the leased property without cause attributed to the lessee, the lease shall be cancelled
and the rent shall be extinguished from the date of prevention.
2. If said prevention shall prejudice the enjoyment of the leased property in a manner that
shall partially affect the receipt of the intended benefit thereof, the lessee shall rescind
the contract and be discharged from the rent as of the date of the service of a notice to
the lessor.
Article 551
The lessee may rescind the contract:
1. If the execution thereof shall afflict apparent damage to his life or property, or to the
successor who has become entitled to the enjoyment of the leased thing.
2. If any matter occurs that prevents the execution of the contract.
Article 552
The lessee must restore the thing leased at the termination of the lease term to the lessor in
status quo ante at the time of delivery of the same, if he has unlawfully retained said thing in
his possession, he shall be obliged to pay the sum on quantum meruit basis to the lessor and
must compensate for the damage.
Article 553
1. If the lessee has constructed, with the permission of the lessor, a building, or plants in
the leased thing, or made other improvements that would increase the value of the real
estate, the lessor shall be obliged, at the time of the termination of the lease, to return
all expenses incurred for such improvements or the excess in the value of the real estate
to the lessee unless an agreement to the contrary is made.
2. If such improvements have been made without the permission of the lessor or without
regards to his objection, he may request from the lessee to remove the same in addition
to a compensation to be paid for the damage that may inflict the real estate as a result
of such removal.
Article 554
The lessee may not lease the thing leased or assign the same in whole or in part except by
written permission from the lessor.
Article 555
A lessee who is permitted to perform a sub-lease or assignment to third parties must
comply with the enjoyment restrictions that he has owned in kind and period.
Article 556
If the lessee has leased the leased property with the permission of the lessor, the new lessee
shall be subrogated to the rights and obligations of the first lessee under the first contract.
Article 557
In case of rescission of the lease contract concluded with the first lessee, the lessor may
revoke the contract concluded with the second lessee and restore the thing leased.
Section 4
Termination of the Lease
Article 558
The lease contract shall terminate by the expiry of the term specified in the contract unless
automatically renewed if stipulated therein.
Article 559
1. The lease shall not terminate by the death of one of the two contracting parties, but the
heirs of the lessee may request such termination of the contract if they prove that the
burdens of the contract became by reason of the death of the deceased too heavy to
what their resources can bear or if they exceed the limits of their needs.
2. If the lease is concluded only by reason of the profession of the lessee or any other
considerations related to his person and then he died, his heirs or the lessor may request
the termination of the contract.
Article 560
1. Each of the two contracting parties may request the termination of the lease contract
for an urgent excuse related to him, accordingly he shall be liable for the compensation
to the other contracting party for the damage sustained thereby.
2. If the lessor is the one who has requested the termination of the contract, the lessee
shall not be obliged to return the thing leased until he receives compensation or obtains
sufficient guarantee thereof.
Section 5
Some Kinds of Lease
1- Lease of Agricultural Lands
Article 561
A lease of an agricultural land shall be valid either with the determination of the crops to be
planted therein or by granting the lessee the option to plant any plants he wishes therein.
Article 562
A land may not be completely leased out when it is still occupied by the crops of another
lessee whose plants are not grown or if his crop is lawfully cultivated therein.
Article 563
A land that is occupied by plants may be leased and the owner thereof shall be charged
with pulling up the same and handing over the land to the lessee:
1- If it is lawfully planted and the plants are grown at the time of lease.
2- If it is unlawfully planted whether the plants are grown or not.
Article 564
A land that is occupied by plants may be put on future lease until the time at which the land
shall be free.
Article 565
1. If a person leased a land for agricultural use, such lease shall comprise all the rights,
but neither the agricultural machinery nor what is not permanently fixed to the land
shall be included therein unless a provision in the agreement so provides.
2. If the contract comprises the lease of agricultural machinery and equipment, and other
things, the lessee must undertake their maintenance and use the same according to the
ordinary usage.
Article 566
Any person who leases a land having the right to plant it of whatever kind he wishes, may
plant the said land in all the seasons of the year.
Article 567
If the term of the lease of the agricultural land expires before the plants are grown for a
reason beyond the will of the lessee, he shall be left therein for a payment on quantum meruit
basis until the crop is grown and harvested.
Article 568
The lessee must exploit the agricultural land under the requirements of exploitation
applicable by common usage, and he must work such that the land remains good for
production. Also he may not change the method of enjoyment of the same whereby the effect
thereof shall continue until after the termination of the lease.
Article 569
The lessor shall be obliged to perform all the repairs necessary for receiving the intended
benefit, and the lessee must perform the repairs required for the ordinary usage of the land as
well as for the maintenance of gorges, ponds, waterways, drains, roads, arcades and wells; all
this shall be applicable except otherwise provided by agreement or custom.
Article 570
If a leased land is overflown with water because of which it becomes impossible to plant,
or if it is cut out of water where it becomes impossible to irrigate or at a high cost, or where a
force majeure prevents such planting, the lessee may rescind the contract and shall not be held
liable for the rent.
Article 571
In case of loss of plants before harvest by reason beyond the will of the lessee, he shall be
held liable for the rent to the extent of the period that has lapsed before the loss of the crops,
and the balance shall be extinguished unless it is possible for him to plant the same as before
where he shall be liable for the remaining period.
Article 572
The contract may not be rescinded and the rent may not be extinguished either in part or in
whole if the lessee is able to obtain compensation or an adequate guarantee from any
authority for the damage sustained thereof.
2- Al Muzara’ah (Sharecropping)
Article 573
Al Muzara’ah is a contract for the investment of an agricultural land between the
landowner and another who invests the same provided that the crop shall be shared between
them in the shares agreed upon.
Article 574
It is required for the validity of the sharecropping contract “Al Muzara’ah” that:
1- The land must be known and cultivable.
2- The type of crop and the kind of seeds must be specified or the option shall be
given to the cultivator so as to plant any plants he wishes.
3- The share of both parties in the harvest must be estimated by a common
percentage.
4- The term of cultivation shall be determined so as to be consistent with the
achievement of the intended purpose thereof; however, if it is not specified,
the contract shall be intended for one crop rotation.
Article 575
Any agreement that the share of one of the contracting parties shall be a specified share of
the harvest or the harvest of a special part in the land or any other cases shall not be valid. In
addition, the seeds or the tax incurred on the title of the land may not be excluded from the
original harvest before partition.
Article 576
If Al Muzara’ah contract is completed, the harvest shall be common between the two
contracting parties who shall divide the same in the proportion agreed upon.
Article 577
1. If the land of sharecropping is considered to be the right of a third party after being
cultivated yet before the crop is harvested, and where the two bona fide parties to the
contract were unaware of the cause of the entitlement, they may keep the land under
sharecropping “Al Muzara’ah until the end of the harvest of crops therefrom, and he
who has provided the land shall be liable for the payment on quantum meruit basis to
the rightful owner.
2. If both said parties were in bad faith, the rightful owner may pull out the crop and
receive his land free of any occupation and he shall not be held liable for anything to
either of them.
3. If the person who has provided the land was solely in bad faith, and where the rightful
owner refuses to leave the land in return for payment on quantum meruit basis until the
time of harvest; the following shall apply:
a- If the seeds were provided by the person who has provided the land, the cultivator
shall be entitled to a remuneration on quantum meruit basis for his work in addition
to a compensation equivalent to what he has incurred in money, labor wages and
other expenses to the applicable extent should the contract bind him to exert what
is mentioned.
b- If the seeds were provided by the cultivator, he shall be entitled to the value of his
share of grown crop against the person who has provided the land.
c- The cultivator, in both cases, where the seeds are provided by him or by the person
who has provided the land, shall have the option to take his share of the crop after
being pulled out, and consequently, he shall not be entitled to anything else.
Article 578
The landowner must deliver the same in a condition good for cultivation with its easement
rights and all that is allocated for the exploitation of the land if permanently fixed thereof.
Moreover, he shall commit to repair the agricultural machinery that must be delivered in a
usable condition for the work if they need repair as a result of the ordinary usage thereof.
Article 579
1. The cultivator shall be liable for the agricultural works supply, the preservation and
maintenance of the crop, and the maintenance costs of irrigation canals and the like
until the time of the harvest of the crop.
2. Supply of the crop from the harvest after it is grown and what follows, and the costs
needed until the partition of the produce, shall be borne by both parties to the contract
in proportion to the share of each of them.
Article 580
The cultivator must exert the care of an ordinary person in the cultivation as well as in the
maintenance of the land and accessories in addition to the crop and harvest; in case of any
negligence therein where damage has incurred from such negligence, he shall be held liable
for a compensation.
Article 581
1. The cultivator may not lease the land or assign another person for the cultivation of
said land unless with the consent of the landowner.
2. If the cultivator violates such obligation, the landowner may rescind Al Muzara’ah
contract. If the land at the time of rescission was planted where the seeds were
provided by the landowner, he may recover the same and have recourse against the
cultivator for the damage incurred thereof. However, if the seeds were not provided by
him, he shall have the choice either to recover the land as planted and grant the value
of the seeds to the owner thereof or leave the crop until the time of harvest and hold the
first cultivator liable for the payment on quantum meruit basis in addition to the
damage incurred.
Article 582
Al Muzara’ah contract shall terminate by the expiry of the term thereof; if such term has
expired before the crop was grown, the cultivator may keep the crop until it is grown and be
liable for the payment for the land on quantum meruit basis as to the extent of his share of the
crop in the subsequent period. The expenses necessary for the crop shall be borne by both the
landowner and the cultivator to the extent of their shares.
Article 583
1. If the landowner dies and the crop was not grown, the cultivator shall continue the
work until the crop is grown; the heirs of the landowner may not prevent him.
2. If the cultivator dies and the crop was not grown, his heirs shall substitute him in the
work until the crop is grown even if the landowner objects.
Article 584
1. In the case of the rescission of Al Muzara’ah contract or when it is nullified, all the
crop yields shall be to the owner of the seeds; if the owner of the seeds be the
landowner, the cultivator shall be entitled to a remuneration on quantum meruit basis
for his work; if the owner of the seeds is the cultivator, the landowner shall be entitled
to the sum on quantum meruit basis for the land.
2. In both cases, the amount due for the work or the land may not exceed the value of the
share of the crop belonging to the owner thereof.
3- Al –Musakat (Irrigation)
Article 585
1. Al-musakat is a contract concluded between a worker and an owner of trees or crops
under which the worker shall tend to care for the trees or crops for a specified period of
time in return for a common part of the produce thereof.
2. Trees or crops shall mean every plant the roots of which remain in the ground for more
than one year.
Article 586
1. If the period of Al-musakat is not specified in the contract, it shall be limited to the first
produce obtained in the year of contract unless otherwise provided by custom.
2. If a period is specified in the contract in which the fruit-bearing shall be possible yet
nothing blossomed, neither party shall be liable for anything to the other party.
Article 587
The works and costs required for Al-musakat shall be governed by the following
provisions, unless otherwise agreed upon:
1- The works required for the care of the trees, the growth of the yields and their
good quality and preservation until they are ripe, such as irrigation,
pollination of trees and pruning, shall be borne by the worker “al-musaqi”, but
the fixed works that may not be repeated every year such as well digging, and
the construction of warehouses for the storage of the produce shall be borne
by the owner of the trees.
2- Financial costs required for the ordinary service and care until the maturity of
the crop such as the price of fertilizers or insecticides shall be borne by the
owner of the trees.
3- The costs required after the maturity of the crop such as the costs of fruit
picking and storage shall be borne by both parties in proportion to their shares
in the produce.
Article 588
The worker Al-musaqi” may not assign another for the work without the permission of the
owner of the trees, and if he did, the owner of the trees shall have the choice either to take the
produce in whole and grant the worker a remuneration on quantum meruit basis for his work,
or leave the produce to both of them and have recourse against the first worker “al-musaqi”
for a remuneration on quantum meruit basis for the subject matter of Al-musakat in addition
to a compensation for the damage incurred by his act.
Article 589
If the trees were deemed the right of a third party, and where the two contracting parties to
Al-musakat or either one of them has disbursed expenses or performed any act that has
affected the growth of the trees, the following shall result, as the case may be:
1- If the rightful owner has ratified Al-musakat contract, he shall substitute the
person who has provided the trees against the worker “al-musaqi” in all the
rights and obligations arising from the contract, and pay to the person who has
provided the trees an amount be equal to any useful costs disbursed thereof
according to custom.
2-
3-
4-
If the rightful owner has not approved the contract, and where Al-musakat
was concluded in good faith without the two contracting parties being aware
of the cause of the entitlement of a third party, the rightful owner shall have
the choice either to take what he is entitled to, pay a remuneration on quantum
meruit basis to the worker and grant the person who has provided the trees all
useful costs disbursed according to the custom, or leave the produce to them
until the end of the season and take from the person who has provided the
trees a fair compensation according to custom for the benefit that he has lost
due to such waiting.
If the two contracting persons to Al-musakat were in bad faith at the time of
contracting, the rightful owner shall take whatever he is entitled to and shall
not be held liable for anything to both parties.
If one of the two contracting parties has acted in bad faith while the other
party was in good faith, the last said shall be entitled to a fair compensation to
be paid by the rightful owner according to custom for the benefit he rendered
to the trees either in disbursements or work.
Article 590
If the term of Al-musakat has expired, the contract shall be terminated; and if the trees have
blossomed yet the fruits are not ripe, the worker “al-musaqi” shall have the choice either to
continue the work until the fruits are ripe with no charge to the share of the owner of the trees,
or he shall reject the work. In this case, the owner of the trees shall have the choice to divide
the fruits under the term agreed upon, grant the worker “al-musaqi” the value of his share
therein or incur expenses until the fruits are ripe, and then he shall have recourse against the
share of the worker of the fruits for the expenses incurred thereof.
Article 591
1. Al-musakat shall not be rescinded by the death of the owner of the trees, and his heirs
may not prevent the worker “al-musaqi” from continuing the work in accordance with
the contract.
2. If the worker “al-musaqi” dies, his heirs shall have the choice to either rescind the
contract or continue the work; if they choose the rescission while the fruits are not yet
ripe, they shall be entitled, when said fruits are ripe, to the share of the deceased therein
in proportion to his work until his death.
3. If it is a condition that the worker “al-musaqi” shall work by himself, Al-musakat shall
be rescinded by his death, and his heirs shall be entitled, when the fruits are ripe, to his
share therein in proportion to his work.
Article 592
If the worker “al-musaqi” has failed to perform his work, as he is required to or as
applicable by custom, his share of the produce shall be decreased in proportion to his
negligence thereof.
Article 593
If the worker “al-musaqi” is deemed disabled to work or shall not be trusted with the fruits,
the owner of the trees may rescind Al-musakat and shall be obliged with the payment on
quantum meruit basis for the work of the worker Al-musakat before the rescission.
Article 594
The provisions of Al-Muzara’ah shall apply to Al-musakat for all that is not specified in
the previous provisions.
4- Mugharasah (Planting)
Article 595
Al-musakat contract may be concluded in the form of Mugharasa’h “planting” whereby the
landowner shall enter into an agreement with another person by which he shall deliver the
land thereof to said person who shall plant, grow the plants, and care for the same as well as
construct all necessary means during a specified period provided that the land and the planted
trees and premises thereof shall be considered shared between both of them in accordance
with the agreement.
Article 596
The provisions that govern Al-musakat shall apply to Al-Mugharasa’h in all that is not
inconsistent with its nature.
5- Lease of Waqf “Endowment”
Article 597
1. The endowment “Waqf” administrator shall be the leasing authority thereof.
2. If the management of Al-Waqf is granted to two persons, neither of them may act
individually in reference to the lease without the other person.
Article 598
The administrator thereof may not obtain a lease of Al-waqf for himself or for any of his
ascendants or descendants even if in return for payment on quantum meruit basis except with
the permission of the court.
Article 599
1. A clause that is set by the founder “al-waqif” must be observed in the lease of Al-waqf
property; accordingly, a lease term which is designated by said founder may not be
infringed.
2. If no person is found who is willing to lease al-waqf property for the specified term,
and the agent is not given the leasing right in terms more beneficial to al-waqf, said
matter shall be brought to the court so as to order the lease for the period that it deems
more appropriate to al-waqf.
Article 600
1. If the founder “al-waqif” has not specified a period thereof, the real estates shall be
leased for a one year term except for the lands that shall be leased for three years at
most unless otherwise required for the interest of al-waqf, and where an order from the
court is issued thereof.
2. If the lease contract is made for a longer period without the permission of the court
even under subsequent contracts, said period shall be decreased to the period specified
in the previous paragraph.
Article 601
1. Leasing of al-waqf property for a sum below the rent specified on quantum meruit
basis shall not be valid unless made with minor lesion. The lessee shall be obliged to
complete the rent on quantum meruit basis and pay the missing amounts for the period
preceding the contract; he shall have the choice either to rescind said contract or accept
the same in return for rent to be determined on quantum meuit basis for the remaining
period.
2. The amount on quantum meruit basis shall be appraised by experts at the time of
conclusion of the contract without regards to an urgent change throughout the period of
the contract.
Article 602
If an improvement has occurred to the location of al-waqf real property which resulted in
that the rent is increased by a gross increase, where the expenses disbursed by the lessee as
well as the repairs and constructions made by him had no effect on such increase, the lessee
shall have the choice either to rescind the contract or accept the same for a payment on new
quantum meruit basis from the date of improvement.
Article 603
1. If the lease term has expired where the lessee had initiated constructions or plantation
for his own in the trust property from his own money upon a permission from the
person having the leasing authority, he shall have priority over any other person for the
lease for a future date by a payment to be determined on quantum meruit basis.
2. If the lessee refuses to accept the payment on quantum meruit basis, and where the
demolition of the building or the pulling out of the trees shall damage the leased real
property, al-waqf authority shall have the right to purchase the buildings constructed
thereon for the payment of its value to the rightful owner unless an agreement is made
that the building or the plants shall be left until the same collapse, whereby the lessee
shall take the debris thereof.
3. The administrator may lease the trust property as well as the building and plants with
the permission of the owner thereof provided that the latter said shall be given the rent
pertaining to his property.
Article 604
If the term of lease has expired where the lessee had a building or trees constructed by him
from his own money in the trust property without permission thereof, he shall be ordered to
demolish what he has built and pull out what he has planted thereon unless such a matter shall
cause damage to al-waqf property. However, if the damage to al-waqf property shall result
from the said acts, he shall be forced to wait until the building or the trees collapse, whereby
he shall take the debris thereof. In both cases, al-waqf authority may purchase whatever is
built or planted for a price that shall not exceed the least price whether demolished in
reference to a building, pulled out in reference to plants, or still exists in reference to any of
them.
Article 605
In matters where the permission of the court is required, the endowment administrator must
consult the competent authority of endowment affairs “Awqaf” for the interest of al-waqf
before requesting said permission.
Article 606
Leasing of al-waqf property shall be governed by the provisions that apply to the lease
contract in all that is not inconsistent with the previous provisions.
Chapter 2
Lending
Section 1
General provisions
Article 607
Lending is granting a third party the ownership of the benefit of an object without
consideration for a specified period of time provided that he shall return the same.
Article 608
Lending shall be complete by the receipt of the thing borrowed and shall have no effect
before such receipt.
Article 609
It is required that the thing borrowed be usable for the benefit intended, that the substance
of the thing borrowed shall remain the same, and that the benefit shall be allowed to be used.
Article 610
Lending shall not be a binding contract and both contracting parties may terminate the
same at any time even if a specified period is set thereof.
Article 611
The thing borrowed shall be deemed as a trust in the hands of the borrower, and in case of
its damage or loss or if its value has decreased without trespass or negligence thereof, he shall
not be held liable unless otherwise agreed upon.
Article 612
The legal tutor, custodian, or guardian may not lend a property that belongs to the person
under his authority; and if he lends someone, the borrower shall be obliged to the payment of
a sum on quantum meruit basis; and if the thing borrowed has perished, the lender shall be
considered liable thereof.
Article 613
No person may lend a property the title or benefit of which is not owned by him without
the permission of the owner thereof. If he did, the legal owner of the right shall have recourse
against the lender or the borrower for the guarantee thereof, and the borrower shall be obliged
to the payment of a sum on quantum meruit basis; the lender shall not have recourse against
the borrower for his liability thereof.
Article 614
1. The lender shall not be held liable if the thing borrowed is deemed the right of a third
party unless he has deliberately concealed the reason for the entitlement thereof.
2. The lender shall not be held liable for the latent defects in the thing borrowed unless he
has deliberately concealed the same or guaranteed the soundness of the thing borrowed.
3. If the right of a third party is ascertained after the thing borrowed has perished while in
the possession of the borrower without any trespass or negligence thereof, and where
the rightful owner has requested that he shall be liable thereof, the borrower may have
recourse against the lender for his liability to the rightful owner.
4. The lender shall be responsible for any damage that may inflict the borrower by reason
of deliberate concealment of the defect or the entitlement of a third party.
Article 615
1. If the lending is temporary for a specified period either by provision or custom, and if
the lender has revoked the same before the specified date, and damage is incurred to
the borrower, the lender shall be held liable to compensate for the damage incurred
thereof.
2. If a revocation shall prejudice the borrower, such as one with respect to any means of
transport lent and intended for travel, and during such a journey, or one with respect to
a land lent for cultivation, after it is planted, yet before the specified term, the borrower
shall have the right to keep the thing borrowed until the prejudice is eliminated in
return for a consideration on quantum meruit basis for the period that follows the
revocation.
Section 2
Obligations of the Borrower
Article 616
1. The borrower must exert due diligence in the maintenance of the thing borrowed same
as the care exerted by an ordinary person in the maintenance of his own property.
2. And the said borrower that was able to but he failed to avoid the damage to the thing
borrowed shall be held liable for the compensation.
Article 617
The cost of the thing borrowed and the expenses for returning it as well as the costs of its
transportation shall be borne by the borrower unless otherwise agreed upon.
Article 618
1. The borrower must benefit from the thing borrowed as carried out in the ordinary
manner in reference to the absolute lending that is not limited either to time, place or a
kind of enjoyment.
2. If the thing borrowed is restricted to a certain time or place, he is required to observe
such restriction; and in case the kind of enjoyment is specified, he shall not exceed the
equivalent or the least damaging extent thereof.
Article 619
1. If any deficiency has occurred due to the use of the thing borrowed that caused the
decrease in the value thereof, the borrower shall not be held liable for the value of said
decrease unless it was due to abnormal use.
2. If the borrower has exceeded the ordinary usage of the thing borrowed or used the
same contrary to said ordinary usage that resulted in that the thing borrowed has
perished or was damaged, he shall be held liable for the damage incurred to the lender.
Article 620
The borrower may not, without the permission of the lender, dispose of the thing borrowed
in a manner that grants a third party the right of enjoyment of it or a property right thereof
whether by lending, mortgage, lease or any other thing.
Article 621
The borrower may deposit the thing borrowed with a trustworthy person so as to keep the
same, and said lender shall not be held liable to the borrower in case of its loss while in the
possession of the trustee without trespass or negligence thereof.
Section 3
Termination of the Lending
Article 622
The lending shall be terminated by the lapse of the term agreed upon or by the satisfaction
of the benefit that is the subject-matter of the lending.
Article 623
1. The lending shall be rescinded by the revocation of the same by the lender, or by the
borrower, or due to the death of either one of them, and it shall not be transferred to the
heirs of the borrower.
2. If the borrower dies, and the thing borrowed is not declared and not found in his estate,
the value of the said thing at the time of the death shall be a debt on the estate.
Article 624
1. If the lending is rescinded or terminated, the borrower shall be required to return the
thing borrowed to the owner thereof, and must refrain from using the same unless he is
allowed by law to keep it.
2. If the lending is rescinded by the death of the borrower, the heirs shall be bound to
deliver the same to the lender upon request.
Article 625
1. If the thing borrowed be precious objects, the borrower must deliver the same in person
to the lender; but other things may be delivered by him personally or by any of the
persons under his care who are legally capable of such delivery.
2. The thing borrowed must be returned at the place agreed upon otherwise at the place of
lending or as applicable by custom.
3. If the borrower dies, his heirs are not obliged to deliver the thing borrowed except at
the place where it exists.
Part 3
Labour Contracts
Chapter 1
Independent Contracts
Section 1
Definition and Scope of the Independent Contract
Article 626
An independent contract is a contract by which the contractor shall commit to manufacture
a thing or perform a work for remuneration.
Article 627
The obligation of the contractor may be restricted to undertaking the work, and the
employer shall provide the material to be used by the contractor or by which he shall be
assisted in performing his work; in addition, the contractor may provide both the work and the
material.
Article 628
The subject-matter of the independent contract must be specified by stating its descriptions,
kind, and quantity as well as the method of its performance, term of completion and
determination of the remuneration in return.
Section 2
Effects of the Independent Contract
1- Obligations of the Contractor
Article 629
1. If the contractor is obliged to provide all or some of the work material, he shall be
required to provide the same under the terms and specifications stated in the contract or
otherwise in accordance with the applicable custom.
2. If the employer is the person who has provided the work material, the contractor is
obliged to take care of it and perform his work in compliance with the technical
requirements and he must return the remaining material to the owner thereof; in case of
a dispute, and where said material has perished or was damaged or lost, he shall be
held liable therefore.
Article 630
The contractor must bring all additional machinery and equipment necessary for the
completion of the work at his own cost unless otherwise provided by agreement or custom.
Article 631
The contractor is required to complete the work under the terms of the contract during the
period agreed upon; in case of the lack of agreement on either the terms or a period, he shall
be obliged to complete the work according to the customary rules of practice within a
reasonable time as required by its nature.
Article 632
The contractor shall be liable for the damage or loss that may result from his act or work;
no liability shall arise if the same has occurred due to an unforeseen accident.
Article 633
1. If the work of the contractor has a considerable effect on the property, said contractor
may detain the same until he receives the due remuneration; in case said property has
perished while in his possession yet before the payment of his remuneration, he shall
neither be held liable nor be entitled to any remuneration.
2. If his work has no effect on the property, he may not detain the same for the collection
of the remuneration; and if he shall do so, he shall be liable for a usurpation “ghasb”.
Article 634
1. The engineer and the contractor shall both be jointly liable for a period of ten years for
the total or partial collapse of the buildings that they have constructed or the other fixed
structures established thereof even if the collapse is the result of a defect in the land
itself or the landowner has permitted the establishment of the defective structures
unless the two contracting parties in said case were willing that such structures shall
stay for a period of less than ten years.
2. The liability mentioned in the previous Article shall include any defects found in the
buildings and premises that threaten the solidity and the safety of the building.
3. The period of ten years shall start from the date of the delivery of the work.
Article 635
If the work of the engineer is restricted to the design without a supervision of the execution
of the work, he shall be held responsible for the defects in the design only.
Article 636
Any clause that exempts the contractor or the engineer from the liability or limits such
liability shall be void.
Article 637
An action for the liability shall not be heard after the lapse of three years from the date of
the collapse or the discovery of the defect.
2- Obligations of the Employer
Article 638
The employer shall be obliged to take delivery of the work accomplished when it is
completed by the contractor and put at his disposal; if he refrains without legitimate cause
despite the fact that he was officially served with a notice of the same; and if the work has
perished or was damaged while in the possession of the contractor without his trespass or
negligence thereof, he shall not be held liable.
Article 639
The employer shall be obliged to pay the remuneration immediately upon the receipt of the
work that is the subject-matter of the contract unless otherwise provided by agreement or
applicable custom.
Article 640
1. If a contract is concluded under an analysis of unit cost basis, and it is indicated during
the work that it is essential for the execution of the design agreed upon that the
estimated analysis be exceeded by a burdensome increase, the contractor is required to
notify the employer of said matter immediately and must state the expected increase in
the price. In the case of his default, his right to recover the expenses in excess of the
analysis value shall be extinguished.
2. If such increase required for the execution of the design is ascertained to be
burdensome, the employer may cancel the contract and cease the execution provided
that such a matter shall be made without delay and he must pay the value of the works
which he has completed to the contractor estimated according to the terms of the
contract.
Article 641
1. If the independent contract is concluded on the basis of a design agreed upon in return
for a total remuneration, the contractor may not claim for any increase in the
remuneration required for the execution of said design.
2. If a modification or addition to the design is made with the consent of the employer,
the agreement concluded with the contractor on such modification or addition must be
observed.
Article 642
If no remuneration is specified in the contract of the work, the contractor shall be entitled
to remuneration on quantum meruit basis together with the value of the materials provided by
him that were required by the work.
Article 643
1. If no agreement is reached with the engineer who made the design of the building and
supervised the execution thereof, he shall be entitled to remuneration on quantum
meruit basis in accordance with applicable custom.
2. If anything occurs that prevents the completion of the work according to the design
prepared thereof, he shall be entitled to remuneration on quantum meruit basis for his
work.
Section 3
Subcontract
Article 644
1. The contractor may assign the execution of all or part of the work to another contractor
if no clause in the contract is provided to the contrary or if the nature of the work does
not require that he perform the work in person.
2. The responsibility of the original contractor towards the employer shall remain valid.
Article 645
The sub-contractor may not claim from the employer what the original contractor owes him
unless he is subrogated to the rights of the original contractor against the employer.
Section 4
Termination of the Independent Contract
Article 646
The independent contract shall be terminated by the completion of the work agreed upon or
by the rescission of the contract whether by consent or court order.
Article 647
If an excuse hinders the execution of the contract or the completion of such execution, it
may be rescinded or terminated by either of the parties, as the case may be.
Article 648
If the contractor has commenced the execution yet becomes unable to complete the same
for a reason beyond his will, he shall be entitled to the value of the accomplished works and
the expenses incurred for said execution to the extent of the benefit accruing to the employer.
Article 649
1. The independent contract shall be rescinded by the death of the contractor if it is agreed
that he shall perform the work personally or if his personal qualifications were taken
into consideration at the time of contracting.
2. If a clause to this effect is not included in the contract or the personality of the
contractor was not taken into consideration, the employer may rescind the contract if
no sufficient guarantees are satisfied by the heirs for the good performance of the work.
3. In both preceding cases, the heirs shall be entitled to the value of the accomplished
works and the expenses incurred under the terms of the contract and applicable custom.
Article 650
A party who is injured by the rescission may claim for compensation from the other party
within the limits accepted by custom.
Chapter 2
Employment Contract
Section 1
Conclusion of the Employment Contract and its Terms
Article 651
An employment contract is a contract whereby one of the two parties shall commit to work
for the benefit of the other party under his supervision or management in consideration of a
wage.
Article 652
1. An employment contract may be for a specified or an unspecified period of time and
for a specific work.
2. The period of the employment contract may not exceed five years; if said contract is
concluded for a longer period, it shall be reduced to five years.
Article 653
The employment term shall start from the time designated in the contract, or from the date
of the contract if the date of commencement is not specified, unless otherwise provided by
custom or by the circumstances of the contract.
Article 654
1. The wage of the employee shall be what is paid under the contract whether money or
benefit in whatever form.
2. If the wage is not specified in the contract, the employee shall be paid a sum on
quantum meruit basis in accordance with applicable custom; in the absence of such
custom, the court shall determine the same according to the requirements of justice.
Article 655
Commissions, percentages, grants, and pay for services in works payable according to
custom, shall all be included in the wage of the employee and be considered as part thereof;
they shall be assessed at the time of the settlement of his rights or the attachment of the same
thereof.
Article 656
If a person works for another at the request of the last said without agreement on the
remuneration, he shall be paid a sum on quantum meruit basis if he is considered an employee
who works for remuneration or if the work is not customarily considered as a contribution.
Section 2
Effects of the Employment Contract
1- Obligations of the Employee
Article 657
The employee must:
1- Perform the work in person and exercise the care of an ordinary person in
such performance.
2- Obey the orders of the employer related to the work in such a way that he
shall not be exposed to danger or in violation of the law or morals.
3- Preserve the things delivered to him for the performance of his work and be a
trustworthy employee; therefore, he shall only be held liable for his trespass.
4- Keep the secrets of the work even after the termination of the contract as
specified by agreement or custom.
Article 658
The employee shall commit to all that is generally accepted by custom to be accessory to
the work even if not conditioned by the contract.
Article 659
During the time of work, the worker may neither engage in anything else nor be employed
for other than the employer during the term of the contract; otherwise, the employer may
rescind the contract or reduce the wage in proportion to the extent of the negligence of the
employee.
Article 660
The employee shall be liable for the deficiency in, damage to, or loss of the property of the
employer due to his negligence or trespass.
Article 661
1. If an employee performs a work that allows him to have knowledge of the secrets of
the work or get acquainted with the clients of the entity, both parties may agree that the
employee shall not be allowed to compete with the employer or participate in a
competitive work after the termination of the contract provided that such agreement
shall only be valid if restricted in time, place and type of work to the extent necessary
for the protection of the legitimate interests of the employer.
2. The employer may not hold to such agreement if he terminates the contract without any
act by the employee that justifies such termination as well as he may not hold to said
agreement if he commits an act that justifies the termination of the contract by the
employee.
Article 662
If an agreement for the payment of compensation is made in case of any violation to the
prohibition of competition, where the compensation is excessive and intended to force the
worker to remain employed by the employer, said agreement shall be void.
Article 663
1. If the worker has made a new invention or discovery in the course of his work, the
employer shall have no right thereof unless in the following cases:
a- If the nature of the work agreed upon is intended for such purpose.
b- If it is expressly agreed in the contract that he shall have the right of any
invention achieved by the worker.
c- If the worker has achieved such invention by the means provided to him by
the employer such as materials, tools, structures or any other means put at his
disposal to be used for such purpose. Nevertheless, if the invention or the
discovery referred to in the aforementioned cases is of a major economic
importance, the employee may demand the employer for a special
consideration in which the requirements of justice shall be observed, also, the
assistance provided by the employer must be taken into account.
2. The previous provisions shall not prejudice any special laws relating to the invention
and discovery.
Article 664
1.
2.
The employer is required to pay the employee the wage agreed upon if he has performed the
work or if has prepared and devoted himself to said work even if no work is assigned to him
thereof.
The wage shall be paid to the employee in the time and place specified in the contract or by
custom.
Article 665
The employer must:
1- Provide all means of security and safety in his entity and furnish whatever necessary to
enable the worker to fulfil his obligations.
2- Maintain the machinery and equipment related to the work so as no harm is caused
thereof.
3-
45-
Give the employer, at the end of his service, a certificate of the type of his work and the
dates of commencement and termination of the same, the amount of his wage and all
other additional payments received thereof.
Return all the employee’s personal papers to him.
Bear all the expenses for the deportation of the employee if he requests so within fifteen
days from the date of termination of the contract or its rescission on the part of the
employer.
Article 666
The employer shall be responsible for the clothing, food and accommodation of the employee if the
same is required under the applicable custom or by the nature of the work.
Section 3
Termination of the Employment Contract
Article 667
1. The employment contract shall be terminated by the lapse of the specified period
unless its renewal is stipulated therein; as well as upon the completion of the work
agreed upon.
2. A contract shall be considered as renewed for an unspecified period either if the two
contracting parties continue the execution of the contract after the termination of the
term or after the completion of a work the nature of which allows such renewal.
Article 668
1. If the term is not specified by agreement or by the type of the work or the purpose
thereof, either one of the two contracting parties may terminate the contract at any time
on condition that the other party be notified of such intention within a reasonable time
before the termination of the contract or in the periods specified by law or custom.
2. In this case, the employee shall be entitled to a sum on quantum meruit basis for the
period during which he has worked provided that it shall not exceed the specified
wage.
Article 669
Any of the contracting parties, upon the existence of an urgent excuse related to them, may
apply for the rescission of the contract, and shall be obliged to the payment of compensation
to the other party for the damage that may result from said rescission.
Article 670
The contract shall be terminated by the death of the employee as well as by the death of the
employer if his personality was taken into consideration at the time of the conclusion of the
contract.
Article 671
The lawsuits arising from the employment contract shall not be heard after the lapse of one
year from the date of termination of the contract, except for the lawsuits related to the
disclosure of the secrets of the work. Said period shall not apply to the lawsuits related to
commissions and percentages unless from the date on which the employer hands over a
statement of the commissions and percentages accrued to the employee according to the last
inventory.
Chapter 3
Agency
Section 1
General Provisions
Article 672
Agency is a contract whereby a person called the “principal” shall authorize another person
to engage on his behalf in a permissible and a specific act.
Article 673
It is required for the validity of the agency that:
1- The principal be an owner of the right of disposition of what is authorized.
2- The agent must have the legal capacity to act as authorized.
3- The subject-matter of the agency be known and capable of being delegated.
Article 674
An agency may be absolute, restricted, conditional, or made for a future date.
Article 675
The agency shall be a special agency if it is limited to a certain matter or matters, and shall
be general if it includes every matter that may be delegated.
Article 676
In the case of a special agency, the agent may only carry out the matters specified therein
and the relevant necessary matters as required by the nature of the acts delegated thereof.
Article 677
In the case of a general agency, the agent may conclude commutative contracts and
dispositions except for contributions, conciliation, discharge, arbitration, loan and personal
status matters unless licensed in the power of attorney.
Article 678
If an agency is worded in general terms where the intention is not clearly specified, the
agent thereby shall only be entitled to the management and safeguarding.
Article 679
Permission and order shall be both considered a power of attorney if a presumption
evidences so, and a subsequent permission shall be the same as a prior agency.
Section 2
Effects of the Agency
1- Obligations of the Agent
Article 680
In the execution of the agency, the agent must act within the bounds of the authority
therein; and he may not exceed said bounds unless for a greater benefit in favor of the
principal.
Article 681
The agent must, in the execution of what he is authorized, exercise the care that he exerts in
his own business if the agency is gratuitous and must exercise the care of an ordinary person
if it is made for consideration.
Article 682
1. In the case of several agents, where each of the same has an independent contract, he
shall be entitled to act individually in what he is authorized; yet if it is conditioned that
they shall not act independently, none of them may act as such and the principal shall
not be liable for individual acts.
2. Where the agents are all appointed by the same contract without being licensed to act
individually in the work, they shall be obliged to work jointly unless where joint work
is not possible such as litigation, provided that the other agent shall be consulted, or
where the matter does not require the exchange of opinions such as the receipt or
settlement of a debt.
3. In the case of several agents, they shall be held jointly liable when the agency may not
be divided or should the damage suffered by the principal be the result of a mutual
error.
Article 683
1. The agent may not delegate the duties conferred upon him by the agency to another
unless he is authorized by the principal, the second agent shall be deemed an agent of
the original principal.
2. If the agent has the right to delegate to a third party without specification, he shall be
held liable towards his principal for his mistake in appointing another or for the
instructions issued thereof.
Article 684
Donations, lending, mortgage, deposit and loan contracts in addition to partnerships, Almudarabah and conciliation of what is denied concluded by the agent, shall only be valid if
made in the name of the principal.
Article 685
It is not a condition that the contracts of sales, lease and conciliation based
acknowledgment be concluded in the name of the principal; accordingly the acts made in
name of the principal by the agent within the bounds of the agency shall result in that
rights of the contract shall revert to the principal same as to the ownership. If any acts
made in the name of the agent without declaring his capacity as an agent, the rights of
contract shall revert to him.
on
the
the
are
the
Article 686
A property that is received by the agent for the account of his principal shall be deemed
same as a deposit; hence, he shall not be held liable if said money perishes while in his
possession without trespass or negligence thereof.
Article 687
An agent having the authority to receive may not litigate and the agent having the authority
to litigate may not receive unless by a special permission from the principal.
Article 688
An agent who is delegated to purchase a specified thing may not buy the same for himself,
and the agent having the authority to purchase may not sell his own property to the principal.
Article 689
An agent shall be obliged to provide the principal with all the necessary information as to
the result achieved in carrying out the agency and he must give an account of his work.
2- Obligations of the Principal
Article 690
The principal is required to pay the remuneration agreed upon to the agent upon
performance of his work, and if no remuneration is agreed upon, and where the agent works
for remuneration, he shall be entitled to a payment on quantum meruit basis otherwise he
shall be considered a donor.
Article 691
The principal must return to the agent the expenses disbursed in the execution of the
agency and within the customary extent.
Article 692
The principal shall be liable for the rights in the liability of the agent by reason of the
ordinary execution of the agency.
Article 693
The provisions of agency in contracts specified in the present Law shall apply to the
relationship between the principal and the agent from one side and the third party from the
other side with whom the agent deals with.
Section 3
Termination of the Agency
Article 694
The agency shall terminate in any of the following cases:
1- By the completion of the work which is the subject-matter of the agency.
2- By the expiry of the specified term.
3- By the death of the principal or by losing his legal capacity unless the agency
is related to the right of a third party.
4- By the death of the agent or by losing his legal capacity even if the agency is
related to the right of a third party; and in this case, the heir or the custodian if
enjoying his legal capacity, and was aware of the agency must notify the
principal of the death of the testator and must take the measures required for
the interest of the principal.
Article 695
The principal may dismiss his agent whenever he wishes unless the agency is related to the
right of a third party or if it is issued to the interest of the agent, accordingly, the principal
may not terminate or limit the said agency without the approval of the beneficiary.
Article 696
The principal shall be held liable for the damage inflicted to the agent by reason of
dismissing him in an inappropriate time or without reasonable justification.
Article 697
1. The agent may resign the agency provided that no right of a third party is related
thereof, and that the principal be notified of such resignation.
2. The agent must pursue the works which he has initiated until he reaches a phase of
which no harm shall be inflicted to the principal.
Article 698
1. The agent shall be liable for the compensation to the agent for the damage suffered by
reason of resignation in an inappropriate time or without reasonable justification.
2. If the agency is related to the right of a third party, the agent must complete the
subject-matter of the agency unless serious reasons arise which justifies such waiver,
and in this case, he must notify the owner of the right and grant him a period in which
he shall preserve his right.
Chapter 4
Contract of Deposit
Section 1
General Provisions
Article 699
The deposit is a contract whereby a person preserves the property of another person, and
“al-widi’ah” is the property deposited with a trustworthy person for its safekeeping.
Article 700
It is a condition for the contract to be valid that the deposited property shall be capable of
being physically possessed.
Article 701
The deposit shall be effective upon an actual or constructive receipt of the deposited
property.
Article 702
A depositary may not receive remuneration for the preservation of the deposited property
unless otherwise agreed.
Section 2
Effects of the Contract
1- Obligations of the Depositary
Article 703
The deposited property is a trust in the hands of the depositary and he shall be held liable
for it in case of its loss either by his trespass or negligence in such preservation unless
otherwise agreed.
Article 704
A depositary must, in preservation of the deposited property, exercise the care of an
ordinary person which he exerts in his own business and must have the said property
safeguarded in the same way.
Article 705
1. The depositary may not place the deposited property with a third party without the
permission of the depositor unless he is obliged and he must restore the deposited
property after the reason is eliminated.
2. If he has placed the deposited property with a third party with the permission of the
depositor, he shall be discharged from his obligation and the third party shall be
deemed as a depositary.
Article 706
1. The depositary may not use the deposited property or give a right to a third party
thereon without the permission of the depositor; in case he fails to comply, and where
the said property has perished or decreased in value, he shall be held liable thereof.
2. If the deposited property shall be money or any other thing which is consumed by
using it, and where the depositary is authorized to use the same, the contract shall be
considered a loan.
Article 707
1. A depositary must return the deposited property and hand it over to the depositor at the
place of its deposit unless otherwise agreed.
2. If the deposited property has perished or decreased in value without the trespass or
negligence of the depositary, and where the depositary due to this reason obtains a sum
of money or any other consideration, he must pay the same to the depositor, and must
transfer to him all the rights that may accrue to him against third parties in reference to
the deposited property.
Article 708
The depositary must return the benefits and the fruits of the deposited property to the
depositor.
Article 709
In case of many depositaries, and where the deposited property may not be divided, they
may preserve the same with one of them with the consent of others or alternately between
them; and if the said property may be divided, it shall be divided so as to each of them shall
keep his share.
Article 710
If the depositor is in a continuance absence, the depositary must retain the deposited
property until his death or life is ascertained; and in case the deposited property is vulnerable
to deterioration if kept for an extended period, he shall be required to apply for the competent
court for the sale of the same and to keep the price as a trust with the treasury of the court.
Article 711
1. If two persons places a common property into the hands of another person, and where
one of them requests that his identified share be returned to him in the absence of the
other, the said person must return the property if the said property is in kind, and shall
refuse to return the property to one of them if the property is non-fungibles unless with
the approval of the other.
2. If the deposited property is subject of dispute between them, he may not return it to
either of them unless with the approval of the other or by an order from the competent
court.
Article 712
1. If the depositary dies, and if the actual deposited property is found in his estate, it shall
be considered a trust in the hand of the heir who is required to return the same to its
owner.
2. If the property is not found, the estate shall not be liable:
a- If the heir proves that the depositary has stated the fate of the
deposited property as such as having been returned by him or
destroyed or lost without negligence or trespass.
b- If the heir recognizes and describes it and where he shows that it was
lost or destroyed after the death of the deceased without trespass or
negligence.
3. If the depositary died without declaring the deposited property and if it is not found in
his estate, it shall be a debt on the said estate and its owner shall share with other
creditors.
Article 713
1. If the depositary died, and if his heir has sold the deposited property and delivered the
same to the buyer where it has perished, the owner of the said property shall have the
choice to require either the seller or the buyer, if he has acted in bad faith, for the
payment of its value at the time of the sale if it is a non-fungible property or to return
the like if it is a fungible property.
2. If the deposited property is present in the hand of the buyer, its owner shall have the
choice either to take it and revoke the sale or confirm the sale and take the price
thereof.
2- Obligations of the Depositor
Article 714
The depositor must pay the remuneration agreed upon if the property is deposited in return
for remuneration.
Article 715
The depositor must pay to the depositary the expenses incurred for the preservation of the
deposited property which is made with the permission of the depositor; and in case the
depositor was absent, the depositary may file the matter to the court so as to rule thereon as it
deems appropriate.
Article 716
1. If a depositary has incurred expenses on the deposited property “al-wadi’ah” without
the permission of the depositor or the court, he shall be considered a donor.
2. A depositary may, in urgent or necessary cases, incur expenses on the deposited
property up to the customary extent and he may have recourse against the depositor for
the expenses paid from his own money.
Article 717
The costs of the deposited property “al-wadi’ah” and the costs for its delivery shall be
borne by the depositor, and he shall also be liable for any damage suffered by the depository
because of the deposited property unless it is a result of his trespass or negligence.
Article 718
If the deposited property is deemed a right of a third party under the liability of the
depository, he shall have the right to have recourse against the depositor for his liability
thereof.
Article 719
If the depositor dies, the deposited property shall be handed over to his heir unless his
estate is encumbered by debts where it shall not be delivered without the permission of the
court.
Section 3
Provisions related to Certain Deposits
Article 720
1. The deposit of objects belonging to the guests of hotels or the likes shall be associated
with a liability term, and the owners of these places must warrant any loss or
deficiency incurred to the said objects.
2. No liability shall be assumed for valuable objects or money or securities unless the
owners of the aforementioned places accept to preserve the same being aware of their
value.
Article 721
1. The guests of hotels or the likes must, before departure, notify the owners, of lost or
stolen property thereof.
2. An action for the liability for lost or stolen property shall not be heard after the lapse of
six months from the date of departing.
Article 722
Each of the depositor and the depositary may terminate the contract at any time before the
due date; if the deposit is made for remuneration, the depositary may not terminate the
contract before the due date unless for a legitimate excuse for which he shall be entitled to a
remuneration for the proportional period. The depositor may terminate the contract at any
time provided that he shall pay the total remuneration agreed upon.
Article 723
1. If the depositary has suffered serious and permanent insanity and if the depositor
proves the deposited property against the legal tutor or the guardian, it shall be returned
to its owner if found in same substance; and if it is not found, the depositor shall be
reimbursed for the same from the property of the insane provided that a solvent
guarantor shall be provided.
2. If the depositary was cured from his insanity and claimed that he has returned the
deposited property or that it has perished without trespass or negligence, his statement
under oath shall be accepted and he shall restore from the depositor or his guarantor
what was taken from his property in substitute for the deposited property.
Chapter 5
Custody of Disputed Property
Article 724
Custody shall be defined as placement of a disputed property in the hands of another
person so as to he shall preserve and manage the same provided that he shall return it to the
rightful owner.
Article 725
Custody may be made by agreement or by an order from the court.
Article 726
A custodian shall be appointed by the agreement of all concerned parties; otherwise the
court shall be entrusted with such appointment.
Article 727
The provisions on the deposit and the provisions on the agency shall apply to the custody
as to the extent be not inconsistent with the provisions of the following Articles unless the
rights and obligations of the custodian are otherwise specified either by agreement or by the
court’s verdict.
Article 728
1. A custodian shall be obliged to preserve and manage the property entrusted to his
custody. And he must exercise the care of an ordinary person thereof.
2. He may not delegate all or some of the duties conferred upon him to any other
concerned party without the consent of the other parties or the permission of the court.
Article 729
The custodian may not perform any act of disposition other than those required for the
management, except with the consent of all concerned parties or by a license from the court.
Article 730
The custodian shall be obliged to provide the concerned parties with the necessary
information in relation with the execution of his task, and he must give an account of the
same within the periods and in the manner agreed upon by the two parties or as ordered by the
court.
Article 731
1. The custodian shall be entitled to remuneration unless he has accepted the custody as a
volunteering activity.
2. He may recover all the expenses disbursed for the preservation and management of the
property assigned to his custody.
Article 732
1. Custody shall terminate by the agreement of all concerned parties or by a verdict from
the court; moreover, it shall be terminated by the expiry of its term if it is made for a
specified period.
2. A custodian shall set out to return the property assigned to his custody to whoever is
selected by the concerned parties or as appointed by the court.
Part 4
Aleatory Contracts
Chapter 1
Gaming and Gambling Contract
Article 733
1. Any gambling or gaming contract shall be void.
2. A loser in a gaming or gambling may restore what he has paid within three years from
the date on which he has paid what he has lost, even if an agreement to the contrary is
provided and he may prove what he has paid by all means of evidence.
Article 734
Gaming which is concluded for a remuneration for he who achieves a certain goal which is
deemed as a sport activity in preparation of the strength reasons shall be excluded from the
provisions of the previous Article, provided that the remuneration shall be from one of the
competitors or others of which shall be granted to the winner; the two contracting parties may
not stipulate that a remuneration shall be given to a person who shall win before the other.
Chapter 2
Insurance Contract
Article 735
The insurance shall be regulated by the provisions of the special laws thereof.
Part 5
Contracts of Personal Securities
Chapter 1
Guarantee
Section 1
Elements of the guarantee
Article 736
A guarantee is the joining of the liability of one person to another for claiming the
fulfillment of an obligation.
Article 737
The offer of the guarantor shall suffice for the conclusion of the guarantee unless rejected
by the creditor.
Article 738
It is a condition for the conclusion of the guarantee that the guarantor has the legal capacity
to donate.
Article 739
A guarantee may be unlimited or restricted to a valid condition or be conditional on a
proper condition, or made for a future date or be temporary.
Article 740
A guarantee of the maintenance of a wife and relatives shall be valid even if before
adjudication or consent thereof.
Article 741
A guarantee which is made by a person suffering from terminal illness shall not be valid if
he is under a debt which is greater than the amount of his property and such guarantee shall
be valid if the debt is less than the amount of his property; the provisions of the will shall be
applicable thereof.
Article 742
A guarantee which is conditional on the discharge of the principal debtor shall be a
subrogation, and the subrogation which is conditional on the non-discharge of the subrogator
shall be a guarantee.
Article 743
A guarantor under conditional guarantee or which is made for a future date may revoke
such guarantee before the debt is incurred.
Article 744
1. A guarantee of a commercial debt shall be considered a civil act even if the guarantor
is a merchant.
2. A guarantee arising from a precautionary guarantee of commercial papers or from the
endorsement of such papers shall be considered a commercial act.
Article 745
A guarantee shall comprise the accessories of the debt and the claim costs unless otherwise
agreed.
Section 2
Effects of the Guarantee
1- Between the Guarantor and the Creditor
Article 746
1. A guarantor must fulfill his obligation on the due date.
2. If the obligation of a guarantor is limited to a restriction or a condition, it must be
fulfilled at the time on which the said restriction or condition is satisfied.
Article 747
A guarantee may be restricted to that that the payment shall be made from the property of
the debtor which is deposited in the hands of the guarantor provided that the consent of the
debtor is acquired.
Article 748
If a guarantee is absolute, the obligation of the guarantor shall be accessory to the
obligation of the principal debtor whether it is immediate or deferred.
Article 749
If a person guarantees an immediate debt of a debtor by a postponed guarantee, the debt
shall be postponed as against both the guarantor and the debtor, yet if the guarantor has
reserved such postponement to himself or if the creditor has determined such postponement in
favor of the guarantor, accordingly; the debt shall not be postponed as against the principal
debtor.
Article 750
If a debt is guaranteed by a real security prior to the guarantee, and where the guarantor has
required that the principal debtor must first be claimed; the execution against the property of
the guarantor may not be applicable before the execution against the property which secures
the debt.
Article 751
A creditor may not have recourse against the guarantor of a guarantor before having
recourse against the guarantor unless he is jointly liable thereof.
Article 752
If the guarantor or the debtor dies before the date of maturity of the deferred debt, the debt
shall fall due on the property or the estate of the debtor, as the case may be.
Article 753
In case of several guarantors for the same debt; any of them shall be bound to the payment
of the whole debt unless the guarantee is made by the same contract and where no joint
liability is assumed thereof; accordingly, each of them shall be claimed in proportion to his
share thereof.
Article 754
If the guarantors are jointly liable for the debt, and where one of the same has settled the
debt at the time of its maturity, he may have recourse against the others in proportion to their
shares in the debt and to their shares in the debt of the insolvent guarantor.
Article 755
Guarantors shall always be jointly liable in judicial and legal guarantee.
Article 756
If a creditor has received another consideration for his debt, the principal debtor and the
guarantor shall both be discharged from the debt unless the said consideration is deemed a
right of a third party.
Article 757
1. A guarantor shall be discharged from the debt to the extent of securities which the
creditor failed to keep by his fault.
2. Securities shall be defined as every security which is provided to secure the fulfillment
of a debt even if determined after the guarantee, in addition to any security which is
determined by law.
Article 758
1. If a debt becomes due, and where the creditor fails to claim the debtor of the same, the
guarantor may warn the creditor so as to adopt the measures against the debtor, in case
of his default within the six months that follows the date of notice, and where the
debtor fails to provide the guarantor with a sufficient security, the guarantor shall be
discharged from the guarantee.
2. A period which is granted by a creditor to a debtor without the consent of the guarantor
shall not preclude from the right of the guarantor to hold to his discharge from the debt.
Article 759
If a creditor becomes insolvent or if his debtor becomes bankrupt, he may declare his debt
to the competent party on the listing of debts or bankruptcy otherwise his right to have
recourse against the guarantor shall be extinguished as to the extent of the damage resulting
from his default thereof.
Article 760
A guarantor may not have recourse against the principle debtor for what he has satisfied on
his behalf unless the guarantee was made upon his request or with his consent and where the
guarantor has fulfilled the same; and he may not have recourse from what he has advanced as
part of the deferred debt unless after the due date.
Article 761
A creditor must deliver to the guarantor upon his settlement of the debt all the documents
necessary to exercise his right to have recourse against the debtor; and if the debt is secured
by another real security, the creditor is required to assign the same to the guarantor if it is a
movable property or to transfer his rights to him if it is a real estate provided that the
guarantor shall bear all the expenses arising from such transfer and for which he shall have
recourse against the debtor.
Article 762
A creditor may not have recourse against the guarantor only except after having recourse
against the debtor; and the guarantor may invoke this right.
Article 763
A creditor may not execute on the property of the guarantor except after depriving the
debtor of his property; and the guarantor may invoke this right.
2- Between the Guarantor and the Debtor
Article 764
If the guarantor has satisfied another consideration as a substitute for the debt, he shall be
entitled to have recourse against the debtor for what he had guaranteed and not that which he
has satisfied.
However, if he has entered into a compromise with the creditor as to the amount of the
debt, he shall be entitled to have recourse for the amount of the compromise and not for the
total debt.
Article 765
1. If the debtor has satisfied the debt before the guarantor has settled the same or if he
becomes aware of any reason which prevents the creditor from claiming such a debt, he
shall be required to notify the guarantor of the said matter, and in case of his default,
and where the guarantor satisfies the debt, he shall have the choice to have recourse
against either the debtor or the creditor.
2. If an action is brought against the guarantor, the debtor must be intervened by the first
said, and in case of his default, the debtor may raise against him all the pleas which he
may have to counter the action of the creditor.
Article 766
A guarantor may have recourse against the debtor for all the costs incurred for the
execution of the guarantee.
Article 767
If the debtors are jointly liable, their guarantor, at their joint request, may have recourse
against any of them for the amount of debt settled by him.
Section 3
Termination of the Guarantee
Article 768
If a guarantor or a debtor has entered into a compromise with the creditor as to part of the
debt, they shall be discharged from the remaining part, however; if it is stipulated that the
guarantor only shall be discharged from the debt, then the creditor shall have the choice either
to take the amount of the compromise from the guarantor and the remaining part from the
debtor or he may discharge the guarantor and claim the debtor for all the debt.
Article 769
If the creditor dies, and where his succession is reserved to the debtor, the guarantor shall
be discharged from the guarantee; yet if he had an heir, the guarantor shall be discharged from
the debtor’s share only.
Article 770
In a temporary guarantee, the guarantor shall only be claimed for the obligations incurred
during the period of guarantee.
Article 771
1. If another person is subrogated to the debt or to a part of the debt thereof which is
secured by the said guarantee upon the approval of the beneficiary and the subrogee,
the debtor and the guarantor shall be both discharged within the bounds of the said
subrogation.
2. If it is stipulated in the subrogation that the guarantor only shall be discharged from the
debt, he shall solely be discharged from the debt without the debtor.
Chapter 2
Subrogation
Section 1
Creation of the Subrogation
Article 772
Subrogation is the transfer of a debt and a claim from the liability of the subrogator to the
liability of the subrogee.
Article 773
Subrogation is a binding contract unless either party stipulates that he shall have the option
to revoke.
Article 774
1. A subrogation may either be restricted or absolute.
2. A restricted subrogation shall be the one which its fulfilment is restricted to the debt
which is due to the subrogator in the liability of the subrogee or to the property which
is in his possession as a trust or a security.
3. An absolute subrogation shall be that which is not restricted to any of the
aforementioned even if it exists.
Article 775
1. The consent of the subrogator, the subrogee and the beneficiary shall be a condition for
the subrogation to be valid.
2. A subrogation which is concluded between the subrogator and the subrogee shall be
dependent on the acceptance of the beneficiary.
Article 776
It is required for the conclusion of the subrogation in addition to the general requirements
that:
1. It shall be completed and be not dependent except on a proper or customary
condition and where the contract shall not be made for a future date.
2. The settlement thereof must not be delayed to an indefinite notice.
3. It shall not be limited in time.
4. That the transferred property which is the subject matter of the restricted
subrogation must be a debt or property which may not be substituted and that both
property be equal in kind, amount and description.
5. That it shall not involve any conditional or noticeable remuneration to any of the
parties thereof and that the subrogation shall not be affected by the remuneration
attached after its conclusion and which shall not fall due.
Article 777
It is required for the subrogation to be valid that the subrogator must be indebted to the
beneficiary; but it is not required that the subrogee be indebted to the subrogator, yet if he
accepts the subrogation, he shall be bound by the debt to the beneficiary.
Article 778
An acceptance of subrogation by the father or the custodian against a third party shall be
permissible if it is beneficial to the minor through that the subrogee be more solvent than the
subrogator or be equally solvent.
Article 779
1. A subrogation shall be annulled if any of the requirements for its conclusion be not
satisfied, and the debt shall revert to the subrogator.
2. If the subrogee has settled the debt to the beneficiary before the nullification is
discovered, he shall have the choice to have recourse against either the subrogator or
the beneficiary.
Article 780
A void cause of the transferred debt shall render the subrogation void.
Section 2
Effects of the Subrogation
1-Between the Creditor and Subrogee
Article 781
A beneficiary shall be granted the right to claim the subrogee; and the subrogator shall be
discharged from both the debt and the claim should the subrogation be properly concluded.
Article 782
A debt shall be transferred to the subrogee in its same characteristic as it was against the
subrogtor, hence; if it is due, the subrogation shall become due, and if it is postponed, the said
subrogation shall be postponed.
Article 783
The securities on the transferred debt shall remain regardless of the change in the person of
the debtor; nevertheless, the guarantor whether be real or personal shall not remain liable to
the creditor unless he has agreed to the subrogation.
Article 784
A beneficiary and a subrogee may, after the conclusion of the subrogation, enter into a
compromise on part of the debt or less or on the postponement of a due debt or on the
advancement of the deferred debt or to take a consideration as a substitute for the debt unless
such a matter shall result in the delay usury.
Article 785
A subrogee may invoke against the beneficiary all the pleas related to the debt and which
he had against the subrogator as well as that he may raise all the pleas of the subrogator
against the beneficiary.
2- Between the Subrogator and Subrogee
Article 786
A subrogator shall be entitled to claim the subrogee for the debt or property in his liability
if the subrogation is not restricted to either one and the subrogee shall not have the right to
detain the same until he settles the debt to the beneficiary.
Article 787
The right of the subrogator to demand the subrogee of the debt or property owed to him
shall be extinguished if the subrogation is restricted to one of them, and where its
requirements are satisfied; and the subrogee shall not be discharged from the debt owed to the
beneficiary unless he had satisfied the same to the subrogator.
Article 788
A subrogee may not, in a valid subrogation of the two types, refrain from settlement to the
beneficiary even if the subrogator has satisfied his debt from the subrogee or has restored the
property which was in the possession of the latter said.
Article 789
If an absolute subrogation is made with the consent of the subrogator, and should a debt is
owed to him by the subrogee, a set off with his debt shall be carried out for the nonsettlement; yet if no debt is due to him thereof, the subrogee shall have recourse against the
subrogator after the settlement.
3- Between the Beneficiary and Subrogator
Article 790
A subrogator must hand over the bond of the transferred right to the beneficiary in addition
to any information or means to enable him to attain his right.
Article 791
If a subrogator guarantees to the beneficiary the solvency of the subrogee, such guarantee
shall only have effect as to his solvency at the time of subrogation unless otherwise agreed.
Article 792
1. If a subrogator dies before the debt of the restricted subrogation is satisfied, the
property which is in the liability of the subrogee or in his possession during the life of
the subrogator shall be allotted to the beneficiary.
2. The term of the debt in the two kinds of subrogation shall remain effective if the
subrogator dies and shall such debt become due by the death of the subrogee.
Article 793
1. A restricted subrogation shall become void if the debt has lapsed or if the property is
deemed to be a right of a third party by an order previous to the subrogation; the
beneficiary shall have recourse against the subrogator for his right thereof.
2. A restricted subrogation shall not be void if the debt has lapsed or if the property is
deemed to be a right of a third party due to an incidental matter subsequent to the
subrogation, and the subrogee shall have the right to have recourse against the
subrogator after the settlement for the payment made thereof.
Article 794
A beneficiary may have recourse against the subrogator in the following instances:
1. If the subrogation is rescinded by the agreement of all parties thereof.
2. If the subrogee has denied the subrogation where no evidence is established thereof and
where he has denied the same under oath.
3. If the subrogation is restricted, and where the debt has lapsed or the property has
perished or is deemed a right of a third party while it is not secured thereof.
4. Between the beneficiary and a third party.
Article 795
1. In case of several subrogations in respect of a single right, a subrogation which by
priority shall become effective against the right of a third party shall be preferred.
2. A subrogation shall not become effective against a third party unless if officially
notified to the subrogee or his acceptance of the same by a document having an
established date.
Article 796
If an attachment is imposed in the hands of the subrogee before the subrogation becomes
effective against a third party; the subrogation in reference to the distrainer shall be deemed as
another seizure; and in this case, if a seizure is imposed after the subrogation has become
effective against a third party; the debt shall be divided pro rata with the earlier distrainer, the
beneficiary and the latter distrainer provided that the amount by which the beneficiary shall
complete the amount of the subrogation shall be taken from the share of the latter distrainer.
Section 3
Termination of Subrogation
Article 797
A subrogation shall be terminated by fulfilment of the subject matter of the same to the
beneficiary either de facto or de jure.
Book 3
Original Right in Rem
Part 1
The Right of Ownership
Chapter 1
The Right of Ownership in General
Section 1
Scope of the Right and Means of its Protection
Article 798
The right of ownership is the power of the owner to use the thing owned by him as well as
to enjoy and dispose of it by all the lawful dispositions.
Article 799
1. The owner of the thing shall own all that is deemed of its essential elements which may
not be separated thereof without being subject to damage, deterioration or change.
2. He who owns a land shall own that which is above and below it as far as it can be
enjoyed of in height and depth unless otherwise is provided by law or by agreement.
Article 800
1- No person may be deprived of his ownership without a legitimate reason.
2- A property of any person may not be expropriated except for the public interest and
against a fair compensation as determined by law.
Section 2
Restrictions on the Right of Ownership
Article 801
The owner must use his property in a manner which complies with the restrictions
determined for the public or private benefit as prescribed by laws and regulations.
Article 802
In case of any right of a third party in the property is established, the owner may not
dispose of the same by an act which may be deemed harmful unless with the permission of
the beneficiary.
Article 803
1. If the owner, while using his property, has incurred damage to a third party, the injured
person may request that the damage be eliminated and shall be entitled to a
compensation; if applicable.
2. An administrative license issued to the owner may not prevent the injured person from
exercising his right to claim for the elimination or the compensation.
Article 804
If a person owns a property having the right to dispose of the same lawfully, and where
another person constructs a building besides it, yet it is damaged due to the earlier situation,
the latter said may not claim damage therefrom and he is required to avoid any damage
thereof.
Article 805
1. An owner, in his disposition of a property whether by a contract or a will, may not
require conditions that shall limit the rights of the alienee unless the said conditions be
for reasonable and definite period and intended for a legitimate benefit to the alienator,
the alienee or to a third party.
2. Any clause that prevents the alienee from disposing of the same shall be void unless
the provisions of the previous Paragraph are satisfied.
Article 806
If one of the conditions of disposition is valid according to the provisions of the previous
Article, and where the person against whom the stipulation is sought has contravened the said
condition, the person who made the stipulation and the beneficiary from the said clause may
require the annulment of the inconsistent disposition. Nevertheless; the inconsistent
disposition shall become valid if approved by the person who made the stipulation unless the
said clause is set to the benefit of a third party where he must also approve on the said
disposition.
Article 807
1. A preventive or restrictive clause of a disposition shall not be invoked against a third
party unless the latter said has been aware of it at the time of disposition or could have
known of it.
2. If the property is a real estate, and where the disposition subject to the condition is
published, a third party shall be deemed to have been aware of the condition from the
date of publication.
Section 3
Joint Ownership
General Provisions
Article 808
Without prejudice to the provisions of the shares of inheritance of each heir, if two or more
persons own the same thing for any reason of ownership without the said share of each be
divided, they shall be deemed joint tenants and their shares shall be deemed to be equal unless
an evidence to the contrary is provided.
Article 809
1. Each co-owner may dispose of his share as he wishes without the permission of the
other tenants in common on condition that no damage shall be inflicted to the rights of
the co-owners.
2. If the disposition involves a divided part of the common property and where the said
part at the time of partition does not fall within the share of the alienator, the right of
the alienee shall be transferred, as of the time of disposition, to the part which has
devolved to the alienator by reason of partition; and if the alienee has been negligent of
that the alienator does not own the property as divided which is the subject matter of
the alienation at the time of the contract, he shall have the right as well to require the
annulment of the disposition.
Article 810
A tenant in common may sell his share without the permission of the other co-owner
except in the case of mixed or indistinguishable shares where the sale shall not be effective
without the permission of his co-owner; moreover, he may not dispose of his share by an act
to be deemed harmful without the permission of his co-owner.
Article 811
1. A common property shall be jointly managed by all the co-owners unless otherwise
agreed.
2. If one of the co-owners conducts the management of the same without the objection of
the others, he shall be considered as their agent.
Article 812
1. The majority of the co-owners, on basis of the value of their shares, may carry out the
ordinary activities of management, and may appoint from amongst the co-owners or
others a manager who shall carry out the said activities, as well as they may set down
the regulation governing such management.
2. The decisions adopted by the majority shall be effective against all co-owners and their
successors whether the said successor shall be general or private.
Article 813
If the majority specified in the previous Article is not satisfied, the court may, at the
request of any co-owner, adopt the measures as necessary or if the interest so requires, and
may, when necessary, appoint a manager for the common property.
Article 814
1. The co-owners who own at least three quarters of the common property, may decide,
for the purpose of obtaining a greater enjoyment of the said property, to perform any
essential changes and modification in the purpose for which the property is intended,
which exceeds the bounds of the ordinary management provided that their decisions
shall be notified to the remaining co-owners; and he who objects shall be entitled to
have recourse to the court within two months from the date of notification.
2. The court, in case of any recourse thereof, and if it confirms the decision of the said
majority, may take the appropriate measures and it may, in particular, decide to grant
the opposing co-owner a guarantee which secures the payment of any compensation
which may be due to him.
Article 815
Every tenant in common shall be entitled to adopt any measures for the preservation of the
common property even without the consent of the other co-owners.
Article 816
The costs of the management of the common property, as well as the costs for its
preservation and the taxes imposed thereof, and other costs resulting from the joint ownership
or determined on the property shall be borne by all co-owners in proportion to the share of
each of them.
2- Division of the Common Property
Article 817
Partition is division and designation of the common share and it may be carried out by
agreement or by a court’s verdict.
Article 818
The divided property must be partible and be owned by the co-owners at the time of
conducting such a matter.
Article 819
Without prejudice to the special laws, he who is willing to withdraw from joint ownership
and who fails to agree with the remaining co-owners on such a matter may apply for the
judicial partition.
Article 820
Voluntary partition may not be carried out when one of the co-owners shall lack the legal
capacity unless having a legal tutor; same if any of them is an absentee or missing and where
such absence or loss is proven.
Article 821
1. It is required for the judicial partition to be valid that it shall be carried out by an
application to be filed by any of the joint tenants.
2. Partition shall be carried out even if one of the co-owners refrains or absents himself.
Article 822
The common property must be partible so as the intended benefit of the same shall not be
lost by partition.
Article 823
If the partition is revealed impossible or if it shall incur damage or great deficiency in the
value of the property intended to be divided, any of the co-owners may sell his share to
another co-owner or he may request from the court to sell the same in the manner specified by
law.
Article 824
1. The creditors of each co-owner may object to the partition, whether such partition is
voluntary or by a judicial proceeding through a warning to be notified to all co-owners
if it is voluntary or by their intervention into the lawsuit if it is judicial.
2. Partition shall not have effect against the creditors who were not intervened into all
proceedings.
3. If partition is carried out, the creditor who has failed to intervene, may not challenge
the said partition unless in case of deceit.
Article 825
If a debt on a deceased person is discovered after the partition of the estate, the partition
shall be cancelled unless the heirs have settled the debt or were discharged from the said debt
by the creditors, or if the deceased has another property which is still not divided and where
the debt is settled therefrom.
Article 826
A sharer shall be considered as an independent owner of his share which has devolved to
him after partition.
Article 827
Partition may not be revoked after its completion. However, all the co-owners may rescind
the said partition and withdraw the same upon their consent and may return the divided
property as to be common between them as it was before.
Article 828
The provisions of the option of condition, the option to inspect and the defect option shall
apply to the partition of different kinds of property in reference to the non-fungibles which are
of same kind; but the partition in reference to the fungibles shall be governed by the
provisions of the defect option without the option of condition or the option to inspect.
Article 829
1. A person who suffers a gross lesion from the voluntary partition may apply to the court
for the rescission of the partition and to be repeated in a just manner.
2. The value of the divided property at the time of partition shall be considered for the
evaluation of the lesion.
Article 830
An action for the rescission and repartition shall not be heard after the lapse of one year
from the date of partition.
Article 831
Partition shall be considered void if all or some of the divided property is deemed a right of
a third party and accordingly repartition of the remaining part must be carried out.
Article 832
Partition which is carried out by an officious intermeddler shall be dependent on the
express or implied authorization of the co-owners of the divided property.
3- Division of Al Muhaya’ah (Alternative utilization)
Article 833
Al Muhaya’ah is the partition of benefit, and it may be either a time-share or a placeshared. In the first said the co-owners shall benefit from all the common property alternately
for a period which shall be proportional to the share of each of them, and in the second, each
of them shall benefit from a certain part of the common property.
Article 834
1. In time-share ownership, the period of time must be specified where such a matter is
not necessary for the place-shared.
2. The co-owners shall agree to the period of Al-muhaya’ah; if they fail to agree, the
court shall determine the period which it deems appropriate according to the nature of
the dispute and the common property; a lot shall be drawn to determine the
commencement of the time-share or the designation of the place shared.
Article 835
Al-muhaya’ah as to the legal capacity of the sharers, their rights and obligations shall be
subject to the provisions of the lease contract unless it is inconsistent with the nature of almuhaya’ah.
Article 836
1. Co-owners may agree during the final procedures of partition to that the common
property shall be divided on basis of muhaya’ah until the final partition is completed.
2. If the co-owners fail to agree on the division of al-muhaya’ah, the court may, at the
request of any co-owner, order the same.
Article 837
1. If one of the co-owners of the common property which is partible requests the partition
and where the others request al-muhaya’ah, the claim for the partition shall be
accepted.
2. If one of the same requests Al-muhaya’ah and where no claim for the partition is
brought and where others shall abstain, they shall be compelled to enter into Almuhaya’ah.
3. If one of the co-owners of the common property which is not partible requests the
partition, and where others abstain, they shall be compelled to enter into al-muhaya’ah.
Article 838
Al-muhaya’ah shall not be annulled by the death of any of the co-owners or by the death of
them all; and the heirs of the deceased shall substitute for him.
Article 839
Co-owners of the common property may not apply for its partition if it is established that
the purpose for which the said property is allocated must remain permanently in common.
4- Ownership of Stories and Apartments
Article 840
In case of several owners of the stories of a building or its different apartments, they shall
be considered as co-owners in the ownership of the land and the parts of the building which
are intended for the common use between all the owners or any other part which is registered
in such description or which the nature of the building requires that it shall be common, and it
shall particularly comprise the following:
1. Foundations and main walls.
2. Common party walls and walls designed for the entrances and to support the ceiling.
3. Ventilation ducts for utilities.
4. Ceiling supports, arches, entrances, courtyards, roofs, stairs and staircases, passages
and corridors, as well as to the ground foundation, lifts and porters rooms.
5. Heating and cooling systems and other kinds of pipes, drains, ducts, structures and
common installations such as the lighting and water equipment and their accessories
and whatever is annexed to the building except that which is inside the story or
apartment.
Article 841
The common parts of the building specified in the previous Article may not be divided, and
the share of each owner therein shall be proportional to his share in the building; and no
owner may dispose of such a share independently of the part which he owns.
Article 842
Party walls between two apartments shall be jointly owned by the owners of the said two
apartments unless they are deemed to be included in the common part.
Article 843
The wall which at the time of its construction is designed to separate two buildings shall be
considered as common to the bifurcation point unless evidence to the contrary is provided.
Article 844
Each owner may enjoy of the common parts for the purpose for which they are intended
provided that such a matter shall not prevent other co-owners from exercising their rights.
Article 845
1. Each owner must participate in the costs of preservation, maintenance and management
of common parts and his share in the costs shall be proportional to his share of
ownership in the real estate.
2. An owner may not relinquish his right in the common parts so as to be released from
the costs thereof.
Article 846
No owner may incur any changes in the common parts without the consent of all owners
even for the renovation of a building unless such modification shall benefit the said parts
without changing their intended use nor inflict damage to other co-owners.
Article 847
The owner of the lower floor must carry out all the works and restorations necessary to
avoid the collapse of the upper floor; in case of his abstention from performing such
restorations, the court at the request of the injured person may order the performance of the
necessary restorations, and the injured person may have recourse against the owner of the
lower floor for his share in the costs.
Article 848
1. If the building collapses, the owner of the lower floor must rebuild the same to its
earlier condition; in case of his abstention, and where the owner of the upper floor has
rebuilt it with his permission or with the permission of the court, he may have recourse
against the share of the owner of the lower floor for the costs disbursed thereof.
2. If the owner of the lower floor abstains, yet the owner of the upper floor rebuilds it
without the permission of the court or the permission of the owner of the lower floor,
he shall have recourse against the owner of the lower floor for his share in the value of
the building at the time of construction.
3. If the owner of the upper floor rebuilds the lower floor without consulting the owner of
the lower floor and upon the verification of such failure, the owner of the upper floor
shall be considered a donor and he may not have recourse against the owner of the
lower floor for anything.
4. The owner of the upper floor in the two cases specified in Clauses (1), (2) of this
Article may prevent the owner of the lower floor from disposition and enjoyment of the
same until he satisfies his right; and he may lease the same with the permission of the
court so as to collect his right out of the rent thereof.
Article 849
The owner of the upper floor may not increase the height of the building in a manner that
shall inflict damage to the owner of the lower floor.
5- Association of Owners of Stories and Apartments
Article 850
1. Whenever a common ownership of an immovable property which is divided into
stories or apartments exists, the owners may set up an association as among them so as
to manage and secure the better enjoyment of the same.
2. The objective of the association may be intended for the construction or purchase of
real estates and the distribution of their parts among the members thereof.
3. The association in reference to its formation, bylaw, management and powers shall be
subject to the provisions of the special laws thereof.
Chapter 2
Reasons of the Property Acquisition
Section 1
Appropriation of Res Nullius Property (Ownerless Property)
1- Movable Property
Article 851
Whoever takes possession of a movable property which has no owner with the intention of
owning the same shall acquire the ownership thereof.
Article 852
A movable property which is abandoned by its owner with the intention of relinquishment
of the ownership of the same shall become res nullius.
Article 853
Special laws shall regulate the matters related to treasures, minerals, the rights of hunting
and fishing, lost property and antiques.
2- Immovable Property
Article 854
1. Waste lands with no owner shall be a State domain.
2. Such land may not be owned or occupied without the authorization of the competent
authority according to the laws.
Article 855
1. He who reclaims or build any of the wastelands with the authorization of the competent
authority shall become the owner of the same.
2. The competent authority may authorize a person to reclaim the said land provided that
he shall only benefit from the same without gaining ownership thereof.
Article 856
1- Petrification of a wasteland shall not be considered as reclamation of the same.
2- A person who has petrified a land for a period of at least three years shall have priority
over others should he has reclaimed the said land during the said period with the authorization
of the competent authority; otherwise it may be given to another provided that the last said
must reclaim the land.
Article 857
A person who has dug a complete well in a wasteland with the authorization of the
competent authority shall become the owner of the said land.
Section 2
Acquisition of Ownership by Succession
First–Security
Article 858
Rights may be owned by the ownership of the security which shall revert to the time on
which they shall be become due provided that the subject matter of the rights are originally
capable of being owned.
Second –Inheritance
1- General Provisions
Article 859
An heir shall acquire by inheritance the immovable and movable property and the rights in
the estate according to the provisions of Islamic Shari’ah and the implementing laws thereof.
2- Provisions of the Estate
a- Designation of the Executor of an Estate
Article 860
If the deceased has not appointed an executor for his estate, any of the concerned parties
may apply to the court for the designation of an executor who was unanimously agreed on by
the heirs to be selected either from among them or from among others; and if the said heirs
fail to unanimously select one, he shall be appointed by the court after hearing their
statements.
Article 861
If the deceased has appointed an executor for his estate, the court must, at the request of
any concerned party, confirm the said appointment.
Article 862
1. He who is appointed as an executor of an estate may resign from his assignment in
accordance with the provisions of the agency.
2. The court may, at the request of any concerned party or without application, dismiss
the executor of an estate and appoint another where there is a justifiable reason for such
a matter.
Article 863
1. The court must record in a special register the orders issued for the appointment of
executors of the estate or for their confirmation if they were appointed by the deceased
or for the dismissal or resignation thereof.
2. Such registration shall have effect against a third party dealing with the heirs in respect
of the immovable property of the estate.
Article 864
An executor of an estate shall take delivery of the property of the estate after being
appointed and he shall carry out the dissolution of the same under the control of the court, as
well as that he shall be entitled for remuneration for his assignment to be assessed by the
court; and the costs of the dissolution shall be borne by the estate.
Article 865
The court, as required, must take all the necessary procedures for the preservation of the
estate and it may order the deposit of the money, securities and valuable things with the
treasury of the court wherein the property of the estate is located within its circuit until the
dissolution be carried out.
Article 866
An executor of an estate is required to:
1- Pay from the estate’s assets the costs of the decedent’s funeral.
2- Obtain an order from the court for the disbursement of a sufficient
maintenance to the needy heir provided that it shall not be in excess of his
share of the estate until the termination of the dissolution of the said estate on
condition that the said maintenance shall be deducted from his share of the
estate; and the court shall adjudicate on any dispute that may arise in this
regard.
Article 867
1. As from the time of appointment of an executor, the creditors may neither take any
measure against the estate nor proceed with such measure unless be brought against the
said executor of the estate.
2. All the proceedings brought against the deceased shall be suspended until the
settlement of all debts on the estate at the request of any concerned party.
Article 868
An heir may not, before receiving a deed of his share in the net estate, dispose of the
property of the estate, and he may not claim for the payment of the debts due to the estate or
to demand set-off of a debt owed by him against a debt due on the estate.
Article 869
1. An executor of an estate must adopt all the measures for the preservation of the
property of the estate and he must conduct the necessary activities of management as
well as to represent the estate in the lawsuits and collect the debts owed to it.
2. An executor of an estate shall assume the responsibility of a paid agent even if he is not
paid, and the court may require him to give an account of his management on specified
periods.
Article 870
1. An executor of an estate must serve a notice to the creditors and debtors of the estate so
as to declare their rights and their debts thereof within one month from the date of
publication of such notice.
2. The notice must be posted on the notice board of the court wherein the last domicile of
the deceased is situated within its jurisdiction as well as the court wherein the property
of the estate is situated within its jurisdiction, and it must be published in any daily
newspaper.
Article 871
An executor of an estate must deposit with the court which has issued the decision for his
appointment or confirmation of the same, and within three months from the date of
appointment or confirmation, a statement of the rights and liabilities of the estate and an
evaluation of the amount of said property, and he must notify the concerned parties of such
deposit by a registered letter; moreover, he may apply to the court for the extension of the
said period where there is a justifiable reason for such a matter.
Article 872
An executor of an estate may resort to the assistance of an expert for the evaluation of the
property of the estate and to take stock of the same, and he must prove what the documents of
the deceased should reveal and the information which he becomes aware of. Moreover, the
heirs must notify him of all the rights and the debts on the estate of which they are aware of.
Article 873
Any person who misappropriated any property of the estate by way of deceit even if he is
an heir shall be punished for the breach of trust.
Article 874
Any dispute on the validity of the stock-taking shall be brought to the competent court
within thirty days from the date of the deposit of the statement mentioned in Article (871) of
this Law.
b- Settlement of the Debts of the Estate
Article 875
1. After the expiry of the specified period for disputing the statement of the executor of an
estate, he shall obtain the permission of the court for the settlement of undisputed
debts.
2. But disputed debts shall be settled after a final adjudication is rendered on their
validity.
Article 876
An executor of an estate must, in case of the insolvency or the possible insolvency of the
estate, suspend the settlement of any debt even if not disputed until a final adjudication is
rendered as regards all the disputes on the debts of the estate.
Article 877
1. An executor of an estate must settle the debts out of the rights collected thereof and the
money comprised therein and from the price of the movable property thereof; and in
case of its non-sufficiency, then out of the price of the immovable property therein.
2. Movable and immovable property of the estate shall be sold by auction in accordance
with the procedures and the periods specified for forcible sales of the Civil and
Commercial Procedure Law unless another method is agreed upon by the heirs.
3. In case of the insolvency of the estate, the consent of all the creditors must be provided,
and in all cases; the heirs shall have the right to enter the auction.
Article 878
The court, at the request of all the heirs, must rule on the maturity of the deferred debt and
the determination of the amount due to the creditor.
Article 879
Every heir may, after the distribution of the deferred debts, pay the amount allotted to him
before the due date.
Article 880
Creditors who have failed to collect their rights due to their non-ascertainment in the
statement mentioned in Article (871) of the present Law, and where they had no securities on
the property of the estate, may not have recourse against the heirs unless within the limits of
what they have collected from the estate.
Article 881
An executor of an estate shall, after the settlement of the debts of the estate, execute the
wills of the deceased and other burdens.
c- Delivery and Division of the Estate Property
Article 882
After the fulfilment of the obligations of the estate, the remaining assets shall devolve to
the heirs each according to his legitimate share therein.
Article 883
1. The executor of an estate shall hand over to the heirs the assets devolved to them.
2. The heirs may, immediately after the expiry of the period specified for the disputes on
the stock-taking of the estate, request to temporary take delivery of all or some of the
property and money of which are not required for the dissolution in return for or
without a guarantee to be provided thereof.
Article 884
The court shall, at the request of one of the heirs or any concerned party, issue a certificate
of succession in which shall be stated the share of inheritance of each of them and his right to
succession.
Article 885
Every heir must request from the executor of the estate to deliver him his divided share in
the estate unless such heir is obliged to remain in joint ownership according to an agreement
or by provision of law.
Article 886
1. If the application for the division is acceptable, the executor of an estate shall conduct
the said division provided that it shall not become final until after the approval of all
the heirs.
2. The executor must, if no unanimous agreement is reached on the division, apply to the
court for conducting the same according to the Law; and the costs of the action for the
division shall be deducted from the shares of the heirs.
Article 887
The rules specified for the partition shall apply to the division of the estate in addition to
the following provisions:
1. If any property of the estate is found to be capable of being exploited either in
cultivation, industry, or commerce and which is considered as an economic
independent part, and where the heir fail to agree on the continuance of the work
among them, and where no right of a third party is established thereof, it must be
completely allotted to the heir who requests the same should he be the most capable
person to taking responsibility of it and provided that its value must be determined, and
be deducted from his share of the estate; and if the ability of the heirs are deemed
equal, it shall be allotted to the heir who offers the highest value as far as it shall not be
less than the sum fixed on quantum meruit basis.
2. If a debt, upon the division of the estate, is allocated to some heirs, the remaining heirs
shall secure the payment of the debt in case of the bankruptcy of the debtor or his
insolvency after the division unless otherwise agreed.
Third- The Will
Article 888
1. A will is an act which shall become effective only after the death.
2. A legatee shall acquire by will the property bequeathed according to the provisions of
Islamic Shari’ah and the implementing laws thereof.
Article 889
An action on the will or on the revocation of the same; if denied, shall not be heard after
the death of the testator unless official documents are found as made in the handwriting of the
decedent with his signature thereon or if the signature on the deed of the will or the revocation
is authenticated.
Section 3
Transfer of Ownership between Living Persons
First: Accession to Property
Article 890
Alluvial deposits carried in the valleys and flowing water to the land of a person shall be
considered as his own.
Article 891
Big and small islands which are naturally formed in the streams of water and the sea shall
be considered a State domain.
Article 892
Lands uncovered by the sea, lakes, streams or swamps with no owner shall be a State
domain.
Article 893
All constructions or plants existing above or below the ground shall be deemed as the work
of the landowner which is constructed at his own cost, and shall belong to him unless
evidence to the contrary is provided.
Article 894
If the landowner has constructed or has scattered seeds on his own land with the material of
others or the seeds of another person without his permission, and if such material or seeds are
still existing and where their owner thereof requests for the restitution of the same, the
landowner must return them to the owner thereof; but if they were deteriorated or consumed,
he must pay the value of the same to the owner; and in both cases the landowner must pay
compensation if appropriate.
Article 895
If a person constructs a building or grows plants or initiates other constructions with the
material of his own but on the land of another person of which he is aware that it belongs to
another and without the consent of the owner thereof, the latter said owner may apply for the
pull out of such additions at the cost of the originator; and if such pull out shall incur damage
to the land, the landowner may acquire the additions in their value at the time of the pull out.
Article 896
If a person constructs a building or grows plants or initiates other constructions with the
materials of his own but on the land of another person assuming a legitimate reason thereof,
thus, if the value of such constructions as present exceeds the value of the land, the originator
may acquire the land by a sum which is to be determined on the quantum meruit basis; and if
the value of the land is not less than the value of such additions, the landowner may acquire
the said additions for their present value.
Article 897
If a person builds constructions with the material of his own but on the land of another
person with his permission, yet if no agreement is made for the fate of such constructions, the
landowner may not apply for the pull out of the additions and he must pay the value of such
constructions should the owner thereof has not applied for their pull out.
Article 898
If a person grows plants or builds other constructions with the materials of another person
and on the land of a third person, the owner of the said materials may not apply for their
recovery, but he may have recourse against the originator, as well as that he may have
recourse against the landowner for a sum be not in excess of what he is owed in the liability
of the originator out of the value of such additions.
Second: The Contract
Article 899
The right of ownership and other rights in rem, in reference to the movable and immovable
property, shall be transferred by way of contract should the elements and terms of the same
are satisfied in accordance with the law.
Article 900
The ownership of a movable property which is not identified shall only be transferred after
its partition in accordance with the law.
Article 901
The ownership and other rights in rem in reference to an immovable property shall not be
transferred as between the contracting parties or against a third party except by registration
according to the provisions of the relevant special laws.
Article 902
A commitment to transfer the ownership of an immovable property shall be restricted to
the obligation of compensation should any party fails to fulfil his commitment whether or not
such compensation is stipulated in the commitment.
Third: Preemption
Article 903
Preemption is the right to acquire all or part of the thing sold which is the subject matter of
the preemption against the will of the purchaser for the amount of the price and costs incurred
thereof.
Article 904
The right of preemption shall be due to:
1- The co-owner of the same property sold.
2- Joint owners of the servitude on the property sold.
Article 905
If the preemption grounds are all met, the co-owner of the same thing sold shall have
priority over the joint owner of the servitude in the thing sold.
Article 906
1. Where several pre-emptors are all joined in the same degree, and where they all filed
for the same, the preemption as among them shall be equal.
2. If several co-owners of the servitude are joined, the particular shall have priority over
the general.
Article 907
If a person purchases a property which is a subject of preemption then he sells the same to
another before it is possessed by preemption, the pre-emptor shall be entitled to purchase the
same for the price paid by the first buyer, and the second buyer may recover the difference
from the first buyer, if any.
Article 908
1. Preemption shall be held by the completion of sale as far as the reason of the same is
satisfied.
2. The donation for a consideration shall be deemed as the sale.
Article 909
The real property which is the subject matter of the right of preemption must belong to the
pre-emptor at the time of purchase of the sold immovable property.
Article 910
If preemption is established, it shall not become void by the death of the seller, the buyer or
the pre-emptor.
Article 911
Preemption may not be exercised in the following cases:
1- In endowment “Waqf” or for the same unless for a justifiable reason.
2- If the property is owned by way of a conditional gratuitous donation or by
alms, inheritance or will.
34-
As regards divided immovable property.
If the sale is carried out by public auction according to the law.
Article 912
Preemption may not be divided, thus, the pre-emptor may not acquire some of the real
property against the will of the buyer unless there are several buyers and where the seller is
the same for which the pre-emptor may purchase the share of some of them without the
others.
Article 913
A preemption claim shall not be heard in the following cases:
1- When a father sells a property to a foreigner in which the son has the right of
preemption.
2- When the sale is made by the son to his father.
3- When the sale is made by one of the spouses to the other spouse.
4- If the pre-emptor renounces his right of preemption whether expressly or
impliedly after the sale is carried out.
Article 914
A person who is willing to exercise his right of preemption must file his lawsuit against the
buyer within thirty days from the date on which he becomes aware of the sale, and if such
claim is delayed without an acceptable excuse, his right of preemption shall be extinguished.
Article 915
The court shall adjudicate on every dispute arising on the real price of the real property
which is the subject matter of the right of preemption, and it may grant the pre-emptor one
month as to pay the sum requested otherwise the preemption shall be deemed void.
Article 916
The title of ownership of the property shall be due to the pre-emptor by a final judgment of
the court or by receiving the same from the buyer by consent provided that the rules of
registration shall be observed.
Article 917
1. Ownership of the real estate which is the subject matter of the right of preemption
whether by court decision or by agreement shall be considered a new purchase wherein
the option to inspect and the defect option shall be due to the pre-emptor even if the
purchaser has waived the same.
2. A pre-emptor shall be entitled to benefit from the period granted to the purchaser for
the payment of the price without the consent of the seller.
3. If the immovable property is deemed to be a right of a third party, after being acquired
by preemption, the pre-emptor may have recourse for the price against who has been
paid either be the seller or buyer.
Article 918
1. If the purchaser has added to the real property which is the subject matter of the right
of preemption anything from his own money or if he has built or has planted trees
before the preemption claim is filed, the pre-emptor shall have the choice either to
waive the right of preemption or to acquire the immovable property for the specified
price in addition to the value of the increase or what he has built or planted.
2. If the addition or the building or the plants were made after the claim, the pre-emptor
may either waive the right of preemption or request the removal of the said
constructions if possible or leave the same in return for the payment of the value of the
increase or the additions as due upon pull out.
Article 919
A pre-emptor may revoke all the dispositions of the buyer even if the real property which is
the subject matter of the right of preemption was provided to Al-waqf or has become a place
for worship.
Article 920
Any security mortgage or other preferential right which is made by or against the buyer
over the immovable property which is the subject matter of preemption shall not have effect
against the pre-emptor should it is carried out after filing the preemption claim; and the
priority rights of the creditors shall remain over the price of the real property which has
devolved to the buyer.
Fourth: Possession
1- General Provisions
Article 921
1.
2.
3.
Possession shall be an actual control of a person either by himself or through another over a
thing or right which is capable of being dealt with.
A person who is below the age of reason shall acquire possession through his legal
representative.
Possession shall not arise from an act of a person as merely allowed or from an act which is
tolerated by a third party.
Article 922
If possession is associated with duress or was gained secretly or if it was ambiguous, it shall not
have effect against the person who was under duress or from whom the possession was kept concealed
or whom was confused except from the time on which these defects are abated.
Article 923
1.
2.
3.
Possession shall be considered as continuous as from its commencement by the ordinary and
regular use of the thing or the exercise of the right.
He who claims prescription shall have the right to rely on the possession of the person from
whom the immovable property is transferred.
A claim of prescription may not be made by a lessee, usufructuary, depositary, borrower or their
heirs.
Article 924
Possession shall be transferred from the possessor to another upon agreement and where the
transferee is capable of taking control over the thing or right which is the subject of possession even if
not yet delivered.
Article 925
1.
2.
If a dispute arises between several persons over the possession of the same thing or right, the
person having physical possession of the thing shall be temporary deemed as the possessor
unless it is proven that such possession was obtained in a defective manner.
Possession shall keep its characteristic which it started with at the time of its acquisition unless
evidence to the contrary is provided.
Article 926
He who possesses a thing without being aware that such a matter infringes the right of a third party
shall be deemed a bona fide person. And bona fide shall be assumed unless evidence to the contrary is
provided.
Article 927
1.
2.
The bona fide of a possessor shall not be extinguished except from the time on which he
becomes aware of that such possession is an infringement of the right of a third party.
The bona fide shall be extinguished as from the time on which the possessor is notified of the
defects of his possession in the pleadings.
3.
An act of dispossession shall render its author as acting in bad faith.
Article 928
Possession shall be abated if the said possessor has relinquished his actual control over the thing or
right or has lost the same by any other manner.
Article 929
1.
2.
3.
Possession shall not be extinguished where the actual control over the thing or right is
temporary hindered.
A lawsuit shall not be heard if such hindrance continues for one year and if it was arisen from a
new possession which occurred despite of the will of the possessor or without his knowledge.
The said one year shall be calculated from the time on which the new possession has
commenced if it was apparent and from the time of the knowledge of the first possessor of it if
it has started secretly; and if there is a significant hindrance against filing the lawsuit, the one
year shall be calculated as from the time of being able to file the same.
Article 930
If the possessor files a lawsuit for the repossession; he may claim that the defendant is prevented
from constructing a building or growing plants in the disputed real property throughout the lawsuit
provided that he must submit a sufficient security to ensure against the damage that may be inflicted to
the defendant should the plaintiff has no right thereof.
2- Effects of Possession
a- Acquisitive Prescription
Article 931
1. A claim for the ownership or of a right in rem shall not be heard, upon denial, from a
plaintiff having no legitimate excuse against whoever possesses; as an owner, a real
property, which is not registered at the competent registration authority, or whoever
possesses a right in rem which is not registered on a real property and where his
possession has continued for an uninterrupted fifteen years.
2. A claim for the ownership or an action of a real right thereof shall not be heard, upon
denial, from a plaintiff having no legitimate excuse thereof against whoever possesses
a movable property or real right thereof, and where such possession has continued for
an uninterrupted period of ten years.
Article 932
If there is a possession over a real property or a right in rem which is not registered at the
Land Registry , and where such possession has occurred in good faith, and in the same time
be based on a valid cause, the extinctive prescription which bars such lawsuit shall be ten
years.
Shall be considered a valid cause:
1- Appropriation of a wasteland.
2- Alienation of ownership by succession or will.
3- Donation.
4- Sale and Barter.
Article 933
1. An action for the subject matter of Al-Waqf, its possession and the non-existence of a
legitimate excuse shall not be heard against the occupant of a real property who is
acting as the absolute owner without any dispute or interruption for thirty six years.
2. The assets and immovable property owned by the State or subordinate public
authorities and institutions may not be owned, the same shall be applicable as to the
trust property and assets or any right in right to be acquired by prescription.
Article 934
1. An action for the absolute ownership and an action of succession shall not be heard
against the occupant of an immovable property should the extinctive prescription
which bars the lawsuit has lapsed as from the occupancy of the said property by the
occupant and the person from whom such property is transferred by way of purchase,
will or inheritance or any other reason.
2. Existing occupancy which is certain in a previous period shall be deemed as a
presumption of its continuity between the two periods unless denied by evidence to the
contrary.
Article 935
No person may invoke the extinctive prescription which shall bar the hearing of an action
for an absolute ownership should he occupies an immovable property by other than a title
deed, and he may not change by himself to his behalf the reason of such occupancy and the
ground on which it relies.
Article 936
An acquisitive prescription may not apply to the action of ownership as long as a legitimate
excuse shall hinder the rightful owner from claiming his right.
Article 937
Prescription may not be interrupted by the loss of possession of an immovable property of
which is repossessed by its owner or by filing a lawsuit for its recovery within one year.
Article 938
Without prejudice to the previous provisions, the rules which govern the extinctive
prescription shall apply to the acquisitive prescription in respect of the computation of the
period, suspension and interruption of the time limitations as well as to invoking the same
before the courts and to the relinquishment of the same in addition to the agreement as to
modify the said period to the extent of which such rules be not inconsistent with the nature of
the acquisitive prescription.
b- Possession of Movables
Article 939
1. An action for the ownership shall not be heard against a possessor of a movable
property or a right in rem over a movable property or a bearer bond, and where his
possession is based on a valid cause and good faith.
2. Possession shall be deemed as a presumption of ownership unless otherwise is
provided.
Article 940
1. Notwithstanding the provisions of the previous Article, the owner of a movable
property or the bearer bond, should he loses possession of the same or where it is stolen
or usurped, may claim the bona fide possessor for the restitution of it within three years
as from the date of its loss or theft or usurpation; the provisions relating to the usurped
movable property shall apply to the said restitution.
2. If the possessor of the thing stolen, lost or usurped and which is found in his
possession, has purchased the same with bona fide in a market, auction or has
purchased the same from a merchant who trades in the like, he shall be entitled to claim
the owner of the said thing for the payment in advance of the price which he has paid
thereof.
c- Acquisition of Produce by Possession
Article 941
A bona fide possessor shall own the fruits and the benefits which he receives during the
period of possession.
Article 942
A possessor in bad faith shall be liable for all the returns which he receives or which he has
fails to receive as from the time on which he is deemed to be in bad faith.
d- Recovery of Expenses
Article 943
1. The owner whose thing is returned to his ownership must pay to the bona fide
possessor all the essential costs incurred thereof and necessary for the preservation of
the property from deterioration.
2. Useful costs shall be subject to the provisions of the two Articles (896, 897) of the
present Law.
3. The owner shall not be obliged to return the luxury costs, and the possessor may pull
out the constructions made by these costs provided that the thing shall be restored to its
first condition, and the owner may keep the same in return for their value as due at the
time of removal.
Article 944
If a person receives the possession from a preceding owner or possessor, and where he
proves that he has paid to the predecessor the costs disbursed thereof, he shall be entitled to
claim the predecessor or who has recovered the same for such costs.
Article 945
1. If a bona fide possessor benefits from the thing assuming that he has a right thereof, he
shall be not be held liable for the rightful owner for such benefit.
2. A bona fide possessor shall not be held liable for any deterioration or loss of the thing
except to the extent of compensation or securities for which he becomes entitled due to
the said deterioration or damage.
Article 946
If a possessor is deemed to be in bad faith, he shall be held liable for the deterioration or
damage of the thing even if it is incurred due to a reason beyond his will.
Title 2
Rights Derived from the Right of Ownership
Chapter 1
Right of Disposition
Article 947
1. The State may grant the right of disposition of the lands owned by it to the person who
wishes so under the terms prescribed by the Law.
2. The deed of disposition must be registered in the Land Registry.
Article 948
1. A person having the right of disposition in the lands owned by the State may plant the
same and benefit from it as well as he may benefit from the produce resulting from his
work, and which grow without being planted, and he may plant whatever trees and
vines he wishes, moreover, he may use the same as a garden or pastureland, and he
may construct homes, stores or factories therein or any other building which he needs
for cultivation provided that such a matter be not be expanded in a manner by which
the thing disposed of becomes contrary to its intended purpose, and he may lease and
lend the said lands as well as that he may use his right of disposition therein as a pledge
or mortgage to secure a debt thereof.
2. Buildings and accessories constructed on the lands owned by the State, in addition to
the plants and vines planted therein shall be subject to the substantive provisions of the
State domain in reference to the disposition and alienation.
Article 949
A person having the right of disposition in the lands owned by the State may benefit from
the soil and sell the sand and stones therein provided that he shall comply with the relevant
laws and conditions.
Article 950
The right of disposition shall be subject to the same legal and consensual restrictions that
apply to the right of ownership.
Article 951
Common right of disposition shall be subject to the provisions that apply to the right of
ownership except for what shall be inconsistent with a special law or with the nature of the
right of disposition.
Article 952
The right of disposition in the Lands owned by the State may not be bequeathed or placed
under endowment.
Article 953
In applying the Articles mentioned in this Chapter, the provisions specified in the special
legislations must be observed.
Chapter 2
Rights of Usufruct and Residential use
Section 1
Usufruct
1- General Provision
Article 954
Usufruct is an original right in rem by which the usufructuary shall be entitled to use and
enjoy a property which is owned by another as long as it exists in the same substance.
Article 955
1. Usufruct shall be acquired by legal disposition or by possession.
2. Usufruct of lands owned by the State shall be determined under the provisions of the
special laws.
2- The Effects of Usufruct
Article 956
The rights and obligations of the usufructuary shall be specified by the deed which has
created such usufruct in addition to the provisions set forth in the following Articles.
Article 957
The fruits of the thing which is the subject of usufruct shall be a right for the usufructuary
during the period of his enjoyment.
Article 958
1. A usufructuary must use the thing in the state in which he received it and according to
its intended purpose and he must observe the rules of good management thereof.
2. A bare owner may object to any unlawful use or that which is inconsistent with the
nature of the thing subject of usufruct, and he may apply to the court to terminate the
usufruct and return the thing without prejudice to the rights of a third party.
Article 959
A usufructuary shall, during the period of enjoyment, be obliged to the costs required for
the preservation of the property which is the subject of usufruct in addition to the maintenance
costs thereof, but extraordinary costs and major reparations that may arise from the fault of
the usufructuary shall be borne by the owner unless otherwise agreed upon.
Article 960
A usufructuary must exercise the due diligence of an ordinary person in preservation of the
thing, and he shall not be held liable if the thing was deteriorated or damaged without trespass
or negligence thereof.
Article 961
A usufructuary shall be liable for the value of the thing which is the subject of usufruct in
case of its damage or deterioration after the lapse of the period of enjoyment, and where it is
not returned to the owner thereof while able to do so, even if the thing was not used after the
lapse of the said period, and even if the owner has not asked such a matter.
Article 962
1. A usufructuary must notify the owner in the following cases:
a- If a third party shall claim a right over the thing which is the subject
of the usufruct or which is usurped by a usurper.
b- If the thing has perished or has been damage or where major repairs
are required for which the owner is liable.
c- If he needs to take a measure so as to avoid a danger which was
concealed.
2. 2- If the usufructuary fails to make the said notification, he shall be held liable for the
damage incurred to the owner.
3- Termination of Usufruct
Article 963
A usufruct shall be terminated by the lapse of the specified period; and if no period is
specified, it shall be considered to be determined to the life of the usufructuary and in all
cases; it shall end by the death of the usufructuary even if before the expiry of the specified
period.
Article 964
1. Usufruct shall terminate by the deterioration of the thing, yet it shall be transferred
from the said thing to the alternate consideration.
2. If such deterioration is not due to the fault of the owner, he shall not be obliged to
restore the thing to its status quo ante, yet if he has restored the same, the usufruct shall
be restored to the usufructuary if such deterioration was not attributed to him; and in
this case, the Article (959) of the present Law shall be applicable.
Article 965
Usufruct shall terminate should the two capacities as a usufructuary and an owner are
joined in same person, yet it shall not be terminated if the owner has an interest to that it
remains.
Article 966
1. An action for the usufruct shall not be heard should it has not been used for fifteen
years.
2. If the usufruct is the right of several joint tenants, and where one of the same has used
such right, the extinctive period shall be interrupted in favor of the others, and
moreover; the suspended period which is in favour of one co-owner shall also be
suspended as in favor of the others.
Section 2
The Right of Use and the Right of Residence
Article 967
The right of use or the right of residence or both of them may be subject to the usufruct.
Article 968
Without prejudice to the provisions of the deed which created the right, the extent of the
right of use and the right of residence shall be determined as to the necessity of the
beneficiary and his family for themselves only.
Article 969
1. The beneficiary from the right of residence shall be obliged to construct the house if
necessary, and whatever is constructed shall be considered as belonging to him and
after to his heirs.
2. In case of his default, the court may lease the house to another who shall construct the
same, and the costs of construction shall be deducted from the rent provided that the
house shall be returned to the beneficiary of the right of residence after the termination
of the term of lease.
3. All this shall apply except otherwise is provided by the deed which created the right or
by law.
Article 970
The right of use or the right of residence may not be assigned to a third party except by an
express clause in the deed which created the right.
Article 971
The provisions of the usufruct shall apply to the right of use and the right of residence as
far as they are not inconsistent with the previous provisions and the nature of these two rights.
Chapter 3
Al-Waqf
Article 972
Al-waqf shall be regulated by a special law.
Chapter 4
Right of Easement
Section 1
Establishment of Rights of Easement
Article 973
An easement is a right which is determined for the benefit of one immovable property over
an immovable property owned by another.
Article 974
An easement may be created over a public property provided that it shall not be
inconsistent with the use for which such property is allocated.
Article 975
1. Rights of easement shall be acquired by legal disposition or by succession.
2. Apparent rights of easement only shall be acquired by prescription including the right
of passage, water-flow and discharge.
Article 976
If an owner has created an apparent easement over two separate immovable properties, the
right shall remain should one of the two said immovable properties or both be conveyed to
other owners without any change in their condition unless otherwise agreed.
Section 2
Specific Easement Rights
1- The Right of Way
Article 977
A private road shall be same as the common property to the person having the right of way
therein; and any of the holders of such right may not create anything therein without the
permission of the others.
Article 978
The beneficiaries of the right of way through the private road may not agree on the sale or
partition of the same or on blocking the entrance thereof.
Article 979
1. Co-partners in the private road only may open access thereto or pass there-through.
2. Pedestrians crossing a public road may enter into a private road if necessary.
Article 980
If any of the co-partners blocks the gate thereto, his right of way shall not be extinguished
and he as well as his successor may reopen such gate.
Article 981
The costs of construction of a private road shall be borne by all partners in proportion to
their respective benefit thereof.
2- The Right of Passage
Article 982
If the right of passage in a land owned by another is granted to a person, the owner thereof
may not prevent such access unless crossing therein is an act of tolerance.
Article 983
The owner of a land with no access to a public road or where no sufficient access to such
road is provided or where it is possible to reach the said road but with heavy cost or major
difficulty, shall have the right of passage through the neighbouring land to the customary
extent for a just compensation; such right shall not be exercised except in the immovable
property where the passage there-through shall cause the least damage.
Article 984
Should the non-access to a public road is resulting from the partition of a real property
which is concluded by a legal disposition, the right of passage shall only be applicable
through the parts of the said real property.
3- The Watering Right
Article 985
The watering right shall be defined as an irrigation shift of either the land or plants.
Article 986
Every person shall be entitled to benefit from the water resources, their tributaries and
streams provided to the public benefit in accordance with the laws and special regulations.
Article 987
No person may have the right to benefit from a stream or a watercourse or a gorge which is
constructed by a person to irrigate his land except with his permission or according to the law.
Article 988
No co-partner of water resources or a gorge or a common stream may split-off another
watercourse except with the permission of the other partners thereof.
Article 989
If the beneficiaries of the watering right fail to agree to conduct the necessary repairs of the
water resources, or the gorge or the common stream, they shall be obliged to perform so in
proportion to their shares therein at the request of any of them.
4- The Right of Water-Flow
Article 990
1. The right of water-flow is the right of the landowner to the flow of the irrigation water
into the land of another so as to reach his land as from its distant source.
2. Should this right be granted to a person, the owners of the land wherein such water
shall run through may not prevent him from exercising such right.
Article 991
If the right of water-flow is granted to a person in the property of another, and were
necessity thereof is proven; the beneficiary of the right of water-flow must construct and
repair the drain as to abate the damage, yet if he refrains, the landowner may perform such a
matter at the cost of the beneficiary of the water-flow to the customary extent.
Article 992
1. Every landowner, who is willing to use the natural or industrial water of which he has
the right to dispose of so as to irrigate his land, shall have the right to that such water
shall run into the lands in the middle between them and his own land, and provided that
he shall pay an compensation in advance, and on condition that such a matter shall not
seriously affect the enjoyment of the landowner thereof; and if damage is inflicted to
the land, the landowner shall be entitled for compensation for the damage sustained
thereof.
2. The landowner must allow that necessary constructions be established on his land
required for the right of water-flow of a neighbouring land in return for a compensation
to be paid in advance, and he may benefit from the said premises provided that he shall
bear the costs for such construction, and a consideration in return for such benefit be
proportionate to his respective benefit therefrom.
Article 993
The owner of the immovable property who has suffered damage from the premises
mentioned in the previous Article may apply for compensation for the damage inflicted by
said constructions to be paid by the beneficiaries therefrom.
5- Right of Discharge
Article 994
The right of discharge is a means to discharge the natural, waste or excess water by running
through the land of a third party.
Article 995
The owner of the lowland may not construct a dam to obstruct the natural flow of the water
from the upland; and the owner of the upland may not perform any work that shall increase
the burden of the lowland.
Article 996
The owner of an agricultural land, who irrigates his land by natural or industrial water,
shall be entitled to the right of discharge of waste or excess water through running in the land
of a third party in return for an appropriate compensation.
Article 997
The owners of the lands through which the discharged water runs may benefit from the
premises for the discharge of water established in their lands provided that the costs for the
construction of such premises as well as their modification and maintenance shall be borne by
each of them in proportion to their respective benefit therefrom.
Article 998
No person may discharge water in a harmful manner in the property of a third party or in a
public or private road.
Article 999
The owners of new premises may not discharge their water into the property of another
without his permission.
Article 1000
The owner of the real property shall level the surface thereof in a manner so as to that the
rain water shall flow into his land or in the public road in compliance with the laws and
special regulations; the said water may not be discharged in the neighboring land.
Section 3
Effects of the Easement Rights
Article 1001
The scope of the right of easement shall be determined by the deed which created the same
and by the applicable custom in the place where the real property is situated as well as to the
following provisions.
Article 1002
The owner of the dominant tenement may exercise his right within the lawful bounds, and
he may perform any matter necessary to exercise and maintain his right without increasing the
burden of the benefit thereof.
Article 1003
1. The costs of the works necessary to exercise and maintain the right of easement shall
be borne by the owner of the dominant estate.
2. Should the works be beneficial to the servient tenement, the costs of maintenance shall
be borne by both parties in proportion to their respective benefit therefrom.
Article 1004
The owner of the servient tenement may not carry out any act that may affect the exercise
of the right of easement or change it unless such benefit from the earlier part has become
more burdensome to the owner of the servient tenement or should prevent him from carrying
out the beneficial repairs; accordingly, the owner of the said real property may require that the
right be transferred to another part in which he may easily exercise his right same as in the
older place.
Article 1005
1. If the dominant tenement is partitioned, the right of easement shall remain due to every
part thereof provided that such a matter shall not increase the burdens of the servient
tenement.
2. If the right shall only benefit some of the said parts, the owner of the servient tenement
may require that it shall be terminated over the remaining parts.
Article 1006
1. If the servient tenement is divided, the mere right shall remain over every part thereof.
2. If the right is not actually exercised over some of the said parts, it may not be used
thereon, and the owner of each part may require that the said right be terminated over
the relative part thereof.
Section 4
Forfeiture of the Easement Rights
Article 1007
The right of easement shall be terminated in the following cases:
1. By the expiry of the specified period or by the extinguishment of the subject-matter
thereof.
2. By the consolidation of the ownership of both the dominant and servient tenements in
favor of the same owner and it shall be restored should the reason for its
extinguishment has a retroactive effect.
3. If it becomes impossible to exercise such right due to the change of the condition of
both the dominant and servient tenements, and shall be restored should their status quo
ante is restored thereof.
4. By the revocation of the use of such right by the owner thereof and the service of a
notice to the owner of the servient tenement in reference to the revocation of such
allocation.
5. If the purpose for the dominant tenement is extinguished or should a limited benefit is
remaining which is totally inconsistent with the burdens encumbered by the servient
tenement.
Article 1008
The exercise of the right of easement by any co-owner shall result into the suspension of
the prescription period in favor of the others.
Article 1009
A claim of an easement right shall not be heard by the non-exercise of such right for fifteen
years; and if the right is determined in favor of a trust property, the period shall be thirty three
years.
Book 4
Real Securities
Title 1
Security Mortgage
Chapter 1
Creation of a Security Mortgage
Article 1010
Security mortgage is a contract whereby a creditor shall acquire a right in rem on an
immovable property which is allocated to the settlement of his debt, and by which he shall
have priority over ordinary creditors and subsequent creditors of same class for the
satisfaction of his right from the price of the said real property regardless of the owner
thereof.
Article 1011
A security mortgage shall only become concluded by its registration, and the mortgagor
shall be held liable for the costs of the contract unless otherwise agreed.
Article 1012
A mortgagor shall be the owner of the mortgaged real property and must have the legal
capacity to dispose of the same; and the mortgagor may be the same debtor or another person
who shall provide a mortgage on behalf of the debtor.
Article 1013
If the mortgagor is other than the owner of the real property, his mortgage shall be
dependent on the authorization of the owner by an authenticated deed.
Article 1014
The mortgaged real property must be existent and present at the time of the execution of
the mortgage.
Article 1015
1. A mortgage may only be provided on a real property which is capable of being dealt
with or on a right in rem on a real property.
2. The mortgaged property must be precisely identified in the same mortgage contract or
in a subsequent authenticated contract otherwise the mortgage shall become void.
Article 1016
A mortgage shall comprise the appurtenances to the mortgaged real property which are
deemed same as real property and the included rights thereof.
Article 1017
1. If one co-owner mortgages all or part of his undivided share, the mortgage shall be
transferred, after the partition, to the divided part which falls within his share.
2. The amounts which are due to the mortgagor from the equality of shares or from the
price of the real property shall be allocated to the payment of the mortgage debt.
Article 1018
The consideration for the mortgage must be a specific and a certain debt.
Article 1019
A mortgage may not be divided and every part of the mortgaged immovable property shall
secure all the debt and every part of the debt shall be secured by the mortgaged immovable
property.
Article 1020
The provisions of the mortgage shall apply to the movable property which is required to be
registered under the special laws thereof.
Chapter 2
Effects of the Security Mortgage
Section 1
Effects of the Security Mortgage between the Contracting Parties
1- The Mortgagor
Article 1021
A mortgagor may dispose of his mortgaged real property, yet such a matter shall have no
effect on the rights of the mortgagee creditor.
Article 1022
1. A mortgagor shall be entitled to manage his mortgaged immovable property and obtain
its produce until the date of the foreclosure thereof for the non-fulfilment of the debt.
2. The produce shall be attached to the mortgaged immovable property as from the date
of foreclosure.
Article 1023
A mortgagor shall be held liable for the mortgaged property and shall be responsible for its
safety until the date of the settlement of the debt, and the mortgagee creditor may object to
any act that may decrease such security, and he may take all the measures so as to preserve
his right to have recourse against the mortgagor for the costs.
Article 1024
1. If the mortgaged immovable property has perished or damaged due to the fault of the
mortgagor, the mortgagee creditor may claim for the immediate settlement of his debt
or that a sufficient security for his debt be provided.
2. If the deterioration or damage is beyond the will of the mortgagor, and where the
creditor refuses that the debt shall remain without security, the mortgagor shall have
the choice either to provide a sufficient security to the debt or settle the same before the
due date.
3. If acts have occurred which shall put the mortgaged property at risk of being
deteriorated or damaged or which renders it insufficient to the security, the mortgagee
creditor may apply to the court for the cessation of such activities and to take all the
measures that may prevent the occurrence of such damage.
Article 1025
The mortgage shall be transferred, upon the deterioration or damage of the mortgaged real
property, to the alternative property and the mortgagee creditor shall satisfy his debt from the
said property.
Article 1026
If the mortgagor is a person other than the debtor, the debt may not be satisfied from other
than the mortgaged real property, and the mortgagor may not have recourse against the debtor
before the execution is carried out on the mortgaged real property unless otherwise agreed.
2- The Mortgagee Creditor
Article 1027
A mortgagee creditor may assign his right to another by an authenticated deed and upon the
consent of the debtor.
Article 1028
1. A mortgagee creditor may satisfy his debt from the mortgaged real property on the
maturity date of the debt in accordance with its degree and according to the specified
procedures.
2. If the mortgaged real property is insufficient to satisfy the debt, the said creditor shall
have the right to have recourse against the property of the debtor who is deemed as an
ordinary creditor for the remaining debt.
Article 1029
If alienation of the ownership of the mortgaged real property is stipulated in the mortgage
contract in return for the debt should it be not satisfied by the mortgagor on the specified
time, the mortgage shall be valid, yet the clause shall become void.
Article 1030
The lease which is made by the mortgagor shall not become effective against the
mortgagee creditor except if having an established date prior to the mortgage.
Section 2
Effects of the Security Mortgage in respect of non-contracting parties
1- General Effects
Article 1031
The mortgage shall become effective against non-parties from the date of its registration
before any right in rem to be acquired by a third party on the mortgaged real property.
Article 1032
The effect of the mortgage shall be restricted to the amount specified in the registered
mortgage deed unless otherwise specified by law or by agreement.
Article 1033
Subrogation of a mortgage or assignment of the same or of its ranking shall not become
effective against non-parties except by the registration and notation of the same on the
original mortgage contract.
2- Priority Right
Article 1034
1. The mortgagee creditors shall satisfy their rights from the price of the mortgaged real
property or from the alternative property ahead in priority over the ordinary creditors
according to the ranking of each of them even if the registration is performed in the
same day.
2. The said ranking shall be determined by the consecutive registration number; and if
several persons have applied in the same time for the registration of their debts against
same debtor and on the same real property, the registration of the said mortgages shall
be made under the same number; and the said creditors shall, upon distribution, be
considered in the same ranking.
Article 1035
A mortgagee creditor may assign his mortgage priority for the amount of his debt to
another mortgagee creditor on the same mortgaged real property.
Article 1036
The ranking of the mortgage shall have effect as of the date of its registration and shall
keep the same rank until its extinguishment thereof.
Article 1037
The registration of the mortgage shall result in that the expenses of the contract and the
registration shall impliedly be included in the mortgage debt and class.
3- Right of Pursuit
Article 1038
A mortgagee creditor shall have the right of pursuit of the mortgaged real property in the
possession of any person so as to satisfy the debt at the time of maturity date and in
accordance with its ranking.
Article 1039
A mortgagee creditor may take the foreclosure proceedings and sell the mortgaged
immovable property should the debt be not settled on the specified date after notification of
the debtor and the possessor of the real property; all this shall be in accordance with the law.
Article 1040
Whoever acquires the ownership of the mortgaged immovable property or any other right
in rem thereon for whatever reason after the registration of the mortgage without him being
personally liable for the mortgage loan shall be considered to be a possessor of the mortgaged
immovable property.
Article 1041
The possessor of the mortgaged real property must settle the mortgage loan and the costs
after being notified provided that he shall have recourse against the debtor and shall be
subrogated to the rights of the creditor who has satisfied his debt.
Article 1042
1. The possessor of the mortgaged real property, whom his title deed is registered, shall
be entitled to clear any right in rem on the immovable property which has devolved to
him and where the said right is made before the registration of the said title deed
through the settlement of the debt and its accessories.
2. The possessor may exercise this right even if before a notification is served by the
mortgagee creditors to the debtor or the possessor; and this right shall subsist until the
date of the sale of the mortgaged real property according to the law.
Article 1043
If the possessor has not chosen to clear the mortgages of the real property, the foreclosure
and the sale proceedings shall be carried out in accordance with the law.
Article 1044
The possessor of the mortgaged real property may participate in the auction sale of the real
property, and should he be the successful bidder and where the price is paid, he shall be
considered an owner of the mortgaged real property under the original title deed, and the real
property shall be cleared of any registered right thereon.
Article 1045
If the successful bidder in the auction sale of the mortgaged real property is other than the
possessor, he shall acquire its ownership by the auction-knock-down and he shall receive his
right in substitute of the possessor.
Article 1046
A possessor shall be held liable for any damage, deterioration or defect that may be
inflicted to the mortgaged real property.
Article 1047
If the proceeds of the bid resulting from the sale of the real property be in excess of the
amount of the mortgage loans, the excess shall be due to the possessor, and the mortgagee
creditors may satisfy their debts there-from.
Article 1048
The possessor of the mortgaged real property may object to the debt for which the real
property is sold by raising all the grounds of objection which may be raised by the debtor
should the debt be registered after the acquisition by the possessor.
Article 1049
1. An action for the liability may be brought by the possessor against the previous owner
within the bounds which the successor may raise against the person from whom he has
received his right either for consideration or by donation.
2. A possessor shall also have recourse against the debtor for the payment which is in
excess of what is due in his liability under his title deed and shall be subrogated to the
rights of the creditors to whom he has paid the debts of the debtor.
Chapter 3
Termination of a Security Mortgage
Article 1050
A mortgage shall be terminated by the extinguishment of the mortgage loan and shall be
restored should the reason for which the debt is extinguished be abated, without prejudice to
the rights which are acquired by a bona fide third party in the period between the
extinguishment and restoration of the right.
Article 1051
A debtor may settle the mortgage loan and its accessories before the due date.
Article 1052
A mortgage shall be extinguished by the sale of the mortgaged real property according to
the Law, and by the payment of the price to the mortgagee creditors in accordance with the
ranking of each of them or by the deposit of the same.
Article 1053
A mortgage shall be extinguished should the mortgagee creditor waives the same by an
authenticated waiver, and he may waive the mortgage lien without the debt.
Article 1054
The mortgage shall be extinguished by the deterioration of the subject matter thereof, and
the provisions in reference to the deterioration of the mortgaged property specified in the
present law must be observed.
Article 1055
1. If the extinctive prescription which shall bar the hearing of the lawsuit has lapsed as for
the mortgage loan, the mortgagor may apply for a decision on the redemption of the
mortgage.
2. If the mortgaged real property is transferred to a possessor, he may invoke the
extinctive prescription which shall bar the lawsuit should the mortgagee creditor have
failed to file an action on the mortgage for fifteen years without excuse.
Article 1056
A mortgage shall not be extinguished by the death of neither the mortgagor nor the
mortgagee creditor and shall remain valid as for the heirs.
Title 2
The Pledge
Chapter 1
Creation of the Pledge
Article 1057
The pledge is defined as the detention of movable property in the possession of the creditor
or a competent person so as a security for a right which may be satisfied in whole or in part in
priority over the other creditors.
Article 1058
It is required that the pledged property be deliverable at the time of pledge and be salable.
Article 1059
It is required that the consideration for the pledge be a certain debt.
Article 1060
It is required for the completion of the pledge and for its effectiveness that the pledgee
creditor shall take possession of the pledged property and the pledger may revoke the pledge
before delivery.
Article 1061
A pledger and a pledgee may agree to put the pledged property in the possession of a
competent person and that the possession of the said witness shall be deemed as the
possession of the pledgee creditor; the pledge shall be completed by its receipt.
Article 1062
The competent person may not hand over the pledged property to the pledger or to the
pledgee creditor without the consent of the other as long as the debt is existent and he may
redeem the same should it be handed; if the pledged property has deteriorated before the
redemption, the said witness shall be held liable for its value.
Article 1063
If the said person has died, and where no agreement is made between the pledger and the
pledgee creditor for the deposit of the pledge with another person, either of them may apply to
the court so as to order the deposit of the same in the hand of another competent person
elected thereof.
Article 1064
The pledger must be an owner of the pledged property and have the capacity to dispose of
the same, and the pledger may be the same debtor; moreover, he may be a real guarantor who
shall provide a pledge on behalf of the debtor.
Article 1065
1. If the pledger is other than the owner of the pledged property, his pledge shall be
dependent on the authorization of the real owner, and if the authorization is not given,
the pledge lien shall not be made on the movable property unless from the time on
which such movable property becomes owned by the pledger.
2. A pledge of a future property shall be deemed void.
Article 1066
Pledge in reference to the common property shall be subject to the provisions on the
security mortgage specified in Article (1017) of the present Law.
Article 1067
The pledge shall be subject to the provisions which preclude the division of the mortgaged
property specified in Article (1019) of the present Law, and all this shall be a security for all
the debt or a part of the debt thereof.
Article 1068
The pledge shall comprise all the accessories included by the sale and relevant to the
pledged property.
Article 1069
The pledged property may be provided as security for several debts of the same ranking on
condition that such pledge be made in the same contract and be totally pledged in favor of
each creditor for his respective debt.
Chapter 2
Effects of the Pledge
Article 1070
1. The Pledger may not dispose of the pledged property except with the consent of the
pledgee creditor.
2. If such disposition is considered a sale, the right of the pledgee creditor shall be
transferred to the price of the pledged property.
Article 1071
1. If an acknowledgment of the pledged property is made by the pledger to another, such
acknowledgment shall not become effective against the pledgee creditor.
2. The said recognition shall not revoke the right of the pledgee creditor so as to detain
the pledged property until he satisfies his debt.
Article 1072
The pledger shall be liable for the soundness of the pledged property and he may not
commit any act that shall decrease its security or prevent the pledgee creditor for exercising
his rights. And in case or urgency, the pledgee may, at the cost of the pledger, adopt all the
means necessary to preserve the pledged property.
Article 1073
The provisions in reference to the deterioration or damage of the pledged property due to
the fault of the mortgagor or force majeure set forth in Article (1024) of the present Law shall
apply to the pledge.
Article 1074
The pledge, upon the deterioration or damage of the pledged property, shall be transferred
to the alternative property and the pledgee creditor shall satisfy his debt therefrom according
to the provisions of Article (1025) of the present Law.
Article 1075
A pledger may apply to the court to authorize the sale of the pledged property, should he is
given the opportunity to sell the same for a favourable deal, even if before the maturity date
of the debt, and the court shall specify in such authorization the sale conditions and shall
adjudicate on the matter related to the deposit of the price.
2- The Pledgee Creditor
Article 1076
A pledgee creditor must safeguard the pledged property either by personally or through a
trustworthy person and he must exercise the care of an ordinary person; moreover, he shall be
held liable for its deterioration or damage unless he proves that such a matter is due to a
reason which is beyond his will.
Article 1077
1. If the pledged property has deteriorated or was damaged by the trespass of the pledgee
creditor or the negligence in safeguarding the same, he shall be liable for its value at
the time of taking delivery thereof.
2. If the value of the pledged property is equivalent to the value of the secured debt, the
debt shall be abated.
3. If the value of the pledged property is higher than the debt, the pledger shall be
released from the debt and the pledgee creditor shall be liable for the remaining
amount.
4. If the value of the pledged property is less than the debt, the debt shall be forfeited as to
the amount of the said value, and he shall have recourse against the creditor for the
remaining debt in the liability of the debtor.
Article 1078
The pledgee creditor shall be entitled to the rights of the mortgagee creditor in reference to
the execution on the pledged property and after on the other assets of the debtor upon the nonfulfilment of the total debt as specified in Article (1028) of the present Law.
Article 1079
The pledge shall be subject to the provisions on the nullity of the agreement for the
acquisition of the pledged property upon the non-fulfilment of the mortgage debt secured as
specified in Article (1029) of the present Law.
Article 1080
If the pledged property shall be threatened of being subject to deterioration or deficiency in
the value for which a risk arises that it shall become insufficient to secure the right of the
pledgee creditor, the said creditor must notify the pledger of the same, and if the said pledger
fails to apply for such redemption in return of another security, either of them may apply to
the court for the sale of the pledged property; and accordingly the right of the pledgee creditor
shall be transferred to the price.
Section 2
Effects of a Pledge on non-contracting parties
Article 1081
It is required for the effectiveness of the pledge contract as against a third party that the
contract be written in an instrument having an established date.
Article 1082
The pledged property shall secure the original debt and the essential costs paid by the
pledgee creditor on behalf of the pledger for the preservation of the pledged property, in
addition to the costs of the pledge and its execution.
Chapter 3
Termination of a Pledge
Article 1083
The pledge shall be terminated by the extinguishment of the secured debt in full, and shall
be restored should the reason for which the debt is extinguished be abated, without prejudice
to the rights which are acquired by a bona fide third party in the period between the
extinguishment and the restoration of the debt.
Article 1084
The pledge shall also be terminated by any of the following reasons:
1. Express or implied assignment by the pledgee creditor of his right in the pledge.
2. Consolidation of both the pledge lien and the right of ownership in the same owner
provided that it shall be retroactively restored should the reason is abated.
3. The deterioration or termination of the pledged right.
Article 1085
The pledge shall not be terminated by the death of the pledger or the pledgee creditor, and
the heirs of the said pledgee creditor or the competent person may detain the pledged property
until the settlement of the debt.
Title 3
Preferential Rights
Article 1086
The preferential rights shall be regulated by special laws.