Dubai Law No.1 of 1971 Contracts Law

Lexis Middle East
Dubai Law No. 1/1971

Contracts Law
Type Law
Issued on 29 Jun 1971 (corresponding to 22 Rabi Al-Thani 1391 H)
Nature Law
Jurisdiction Dubai
Copyright LexisNexis
Document link: https://www.lexismiddleeast.com/law/Dubai/Law_1_1971
https://www.lexismiddleeast.com
Dubai Law No. 1/1971 Contracts Law
Table of contents
Title 1 - Notification, Acceptance and Cancellation of the Offer (art. 4 - 11) ................................................................................ 3
Title 2 - Contracts, False Contracts and Void Agreements (art. 12 - 34) ........................................................................................ 4
Title 3 - Outstanding Contracts (art. 35 - 40) ................................................................................................................................. 7
Title 4 - Implementation of Contracts (art. 41 - 87) ....................................................................................................................... 8
Contracts to be implemented (art. 41 - 49) ........................................................................................................................ 8
Time and Place of Implementation (art. 50 - 54) ............................................................................................................... 9
Implementation of Reciprocal Promises (art. 55 - 62) ...................................................................................................... 10
Allocation of Payments (art. 63 - 63) ................................................................................................................................ 11
Contracts not to be implemented (art. 64 - 69) ................................................................................................................ 11
Implementation of the Contracts in Kind - a-The Contracts implemented in Kind (art. 70 - 77) .................................... 12
b-The Contracts that cannot be implemented in Kind (art. 78 - 78) ................................................................................ 13
c-On the Option of the Court (art. 79 - 79) ...................................................................................................................... 13
d-Worthy of Implementation in Kind of the Contract (art. 80 - 80) ................................................................................. 13
e-The Persons Deprived of the Implementation in Kind (art. 81 - 82) ............................................................................. 14
f-The Persons Deprived of Implementation in Kind unless with Amendment (art. 83 - 83) ............................................ 14
g-The Persons whose Contracts are implemented in Kind (art. 84 - 84) .......................................................................... 14
h-The Persons whose Contracts are not implemented in Kind (art. 85 - 85) .................................................................... 15
i-Impact of Rejection of the Lawsuit of Implementation in Kind (art. 86 - 86) ................................................................ 15
j-Termination instead of Implementation in Kind (art. 87 - 87) ...................................................................................... 15
Title 5 - Some Relationships similar to Contractual Relationships (art. 88 - 92) ......................................................................... 15
Title 6 - Impact of Violation of the Contract (art. 93 - 95) ........................................................................................................... 15
Title 7 - Guarantee and Warranty (art. 96 - 118) .......................................................................................................................... 16
Title 8 - Deposit (art. 119 - 153) ................................................................................................................................................... 18
Deposits and Mortgages (art. 143 - 151) ........................................................................................................................... 20
Lawsuits of the Mortgagees and Mortgagors against Aggressors (art. 152 - 153) ............................................................. 21
Title 9 - Agency (art. 154 - 209) .................................................................................................................................................... 22
Appointment of Agents and Powers thereof (art. 154 - 167) ............................................................................................ 22
Permission (art. 168 - 172) ............................................................................................................................................... 23
Cancellation of Authorization (art. 173 - 182) ................................................................................................................. 23
Obligations of the Agent towards the Principal (art. 183 - 192) ....................................................................................... 24
Obligations of the Principal towards the Agent (art. 193 - 196) ....................................................................................... 25
Impact of the Agency on the Contracts with Third Parties (art. 197 - 209) ...................................................................... 25
2 https://www.lexismiddleeast.com
Article 1 - Name
This Law shall be entitled (Contracts' Law of 1971) and shall enter into effect as of 15/07/1971.
Its provisions shall be applied, to the extent permitted by the circumstances, on any contract concluded before the entering
into effect of this Law.
Article 2 - Exceptions
Anything mentioned in this Law shall not affect any custom of trade, usages of trade or any provision in any contract that is
not inconsistent with the provisions of this Law.
Article 3 - Definitions
The following words and expressions shall have the meanings stated beside them, wherever mentioned in this Law, unless the
context indicates otherwise:
(a) Offer: Offer provided by one person to another, in order to do a certain task or refrain from doing such task, to obtain the
approval of the other on this activity or the refrainment therefrom.
(b) Consent: When the person for whom the offer was made accepts the same, then the offer becomes approved and when the
offer is approved, it becomes a promise.
(c) Promisor: The person who provides the offer.
(d) Promised: The person who accepts the offer.
(e) Promise Benefit: Everything done by the promised, refused to be done by him, everything being done by him or that he
refrains from doing, everything undertaken to be done by the promised or to refrain from doing, and everything arranged by
the promised to be accomplished or to be refrained from accomplishment, taking in consideration the provisions of this Law,
provided that all these tasks are carried out according to the wish of the promisor.
(f) Agreement: Every promise with benefit.
(g) Reciprocal Promises: Those that form benefit, or some benefit from one to another.
(h) Invalid Agreement: Agreement that is unenforceable under the Law.
(i) Contract: Agreement enforceable under the Law.
(j) False Contract: Every agreement that either party may implement under the Law while the rest of the parties are not able to
do so.
(k) Void Contract: Every contract that has become unenforceable under the Law.
Title 1 - Notification, Acceptance and Cancellation of the Offer
Article 4 - Notification, Acceptance and Cancellation of the Offer

The notification, acceptance and cancellation of the offer, as well as the cancellation of its acceptance shall be carried out
through any act or refrainment by the offering, accepting or cancelling party, with the intent of notification, acceptance or
cancellation of the offer or through any act or refrainment leading to notification.
Article 5 - Notification of the Agreement Clauses

The agreement shall be considered complete when the contact of both parties leads to their agreement on the subject. If the
offer is a promise made against a certain act, the agreement shall be considered complete upon accomplishment of such act.
Article 6 - When the Notification is considered Complete

1-The offer shall be notified by its communication to the person to whom it was made.
2-The notification of consent shall be complete after its communication to the offerer. As per the latter, this shall be through
one of the communication means, of which the use, as per the parties, is reasonable in all circumstances and makes the
notification out of the acceptor's control.
3-The cancellation of the offer or consent, towards its provider, shall be notified if submitted to the addressee through a
communication means that is out of the notifier's control, and towards the addressee, upon his notification.
Article 7 - Cancellation of the Offer and Consent

1-The offer may be cancelled at any time before the consent, towards the offerer, and not afterwards.
2-The consent may be cancelled at any time before its notification, to the consenting party, and not afterwards.
https://www.lexismiddleeast.com 3
Article 8 - Method of Cancellation

The offer shall be cancelled under any of the following conditions:
a) The offerer notifies the other party of the cancellation.
b) Expiry of the time period specified for the consent of the offer. In case no time period was specified, upon expiry of a
reasonable period of time without notification of the consent.
c) The consenting party neglects the prerequisite for consent.
d) The offerer is deceased or affected by mental disorder and the news of his decease or mental disorder reached the
consenting party before the consent.
Article 9 - The Consent is Absolute

In order for the offer to become a promise, the consent shall be:
(a) Absolute and unconditional.
(b) Expressed in a normal and reasonable manner unless the offer specifies the method of consent.
If the offer specifies its method of consent but the consent takes place in another method, the offerer shall, within a
reasonable time after his notification, insist that his offer shall be accepted in the specified method alone. Otherwise, he shall
be considered having accepted the consent in its method.
Article 10 - Consent of the Implementation of Conditions or Receipt of Benefit

Implementation of the content of the offer, or consent of any benefit for a promise made with the offer, shall be considered as
consent of the offer.
Article 11 - Explicit and Implicit Promises

The promise shall be considered explicit to the extent that the offer or consent of any promise is verbal, and implicit when the
offer or consent is not expressed verbally.
Title 2 - Contracts, False Contracts and Void Agreements
Article 12 - Agreements forming Contracts

1-Every agreement made with the consent and choice of parties which have legal capacity, for a legitimate benefit and for a
legitimate purpose, shall be considered a contract unless it is explicitly stated, as follows, to consider it void.
2-Paragraph 1 of this Article shall not affect any valid legislation requiring making a contract in writing or in the presence of
witnesses.
Article 13 - Capacities of the Contracting Parties

Every person shall be considered having legal capacity if he is an adult, sane and not incapacitated.
Article 14 - Significance a Sound Mind for the Purpose of the Contract

1-A person is considered of a sound mind for the purpose of the contract if he was, upon making the contract, able to
understand it and appreciate its effect on its own interests in a reasonable manner.
2-A person who is usually demented but recovers his poise during certain periods, may conclude contracts during such periods.
3-A person who usually has sound mind and loses his poise during certain periods, may not conclude contracts during such
periods.
4-A person whose mental disorder is limited to one subject or more, may conclude contracts on subjects not related to such
disorder.
Article 15 - Definition of Contentment

Two persons or more are considered contented if they agree on the same matter with the same significance.
Article 16 - Definition of Contentment and Choice

Contentment shall be considered optional if it does not occur:
1-Through coercion, as defined in Article 17 hereof.
2-Through illegal influence, as specified in Article 19 hereof.
3-Through deception, as defined in Article 20 hereof.
4-Through sedition, as defined in Article 21 hereof.
5-By mistake, taking into consideration the provisions of Articles 24, 25 and 26 of this Law. Contentment shall be considered
having occurred in any of the above-mentioned methods if it would not have taken place without the effect of this coercion,
illegal influence, deception, sedition or mistake.
Article 17 - Definition of Coercion

Coercion is committing, or threatening to commit, an act considered an offense under the Penal Code, seizing or threatening
to seize any properties illegally, thereby damaging any person, with the intention of forcing such person to implement an
agreement.
Article 18 - Proof of Good Faith in the Transactions where one of the Parties is bound in General to be
Honest with the other
In case of good faith in a transaction between two parties and one of them shall be honest with the other in general, the
burden of proving good faith in the transactions shall be borne by the party who has such general obligation.
Article 19 - Definition of Illegal Influence

1-The contract is considered concluded under illegal influence if the public relations between both parties made one of them
in a position enabling him to control the will of the other and he takes advantage of this position to obtain an unfair advantage
over the other.
2-Without prejudice to the general principle of the above-mentioned rule, the person is considered in a position enabling him
to control the will of the other:
(a) If he had a real or apparent authority over the other or was obliged to be honest with the other.
(b) If he concluded a contract with a person whose mental ability was affected, temporarily or permanently, because of age,
sickness, physical or psychological pain.
3-a-If the person in a position enabling him to control the will of another person, concludes a contract with such other person,
and it was revealed later on that the contract, as it appears or based on heard evidence, does not please the conscience, the
burden of proof that the contract was not concluded through illegal influence, shall be borne by the person who is in a position
enabling him to control the will of the other party.
b-This paragraph does not affect the provisions of the preceding Article.
Article 20 - Definition of Deception

1-Deception shall mean: Any of the following acts carried out by a party in any contract, whether by himself, by conspiracy or
through his representative, with the intent to deliberately deceive the other party or his representative and lure him to
conclude a contract:
(a) Stating an incorrect fact as the truth by someone who is aware of its incorrectness or by someone who does not care, due to
his recklessness, whether the above statement is correct or not.
(b) Hiding the truth by someone who knows the truth or thinks the same.
(c) Promise given without the intention to implement it upon giving.
(d) Any other act with the intent of fraud.
(e) Any act or refrainment considered by the Law as fraudulent in particular.
2-Mere silence about the facts that may affect the willingness of a person to conclude a contract, shall not be considered as
deception, unless the Law has imposed, at light of the case's circumstances and after taking such circumstances into
consideration, an obligation on the silent person to speak or in case his silence involves the presence or absence of an
essential fact.
Article 21 - Definition of Sedition

Sedition shall mean
(a) Assertion of an incorrect fact by a person who believes it is correct.
(b) Breach of duty, with the intention to commit fraud, which brings an advantage to the violator or whoever claims through
him, by misleading another person in a way damaging him or whoever claims through him.
(c) Making one of the agreement parties, albeit in good faith, commit a mistake as per the essence of the subject covered by the
agreement.
Article 22 - Agreements concluded without Contentment and Choice subject to Cancellation:

1-In case of contentment in any agreement, by coercion, deception or sedition, the agreement shall be considered subject to
cancellation according to the choice of the party whose contentment was obtained under the said circumstances.
2-Any party in a contract, whose contentment was obtained by deception or sedition, may, if he wishes so, adhere to the
implementation of the contract and shall be placed in the situation that he should be in if the given data were correct.
3-Notwithstanding the provisions of paragraph 1 of this Article, if contentment was obtained by sedition or fraudulent silence
as per Article 20 of this Law, the contract shall not, however, be subject to cancellation if that person, whose contentment was
obtained in such manner, has the ways to detect the truth through ordinary effort.
Article 23 - Right to Cancel the Contract concluded under Illegal Influence

1-If contentment in the agreement takes place under illegal influence, the agreement shall be a contract subject to
cancellation according to the choice of the party whose contentment was obtained in such manner.
2-The cancellation of this contract shall be either absolute or under the restrictions and conditions deemed fair by the Court if
the party who has the right to avoid the same has obtained a benefit thereunder.
Article 24 - The Agreement is Void if both Parties were wrong regarding a Fait Accompli
1-If both parties of the agreement were wrong regarding an essential fait accompli in the agreement, the agreement shall be
void.
2-The error in estimating the value of the thing covered by the agreement shall not be considered wrong as per a fait accompli.
Article 25 - Effect of the Error as per the Law

The contract shall not be considered false if it results from an error in respect to any law in force. The error related to any
other unenforceable law shall have the same effect entailed from an error in the fact.
Article 26 - Contract resulting from the Error of one Party regarding a Fait Accompli
The contract shall not be considered false if it results from the error of one party regarding a fait accompli.
Article 27 - Legal and Illegal Benefits and Purposes

1-The benefit and purpose, in any agreement, shall be considered legal unless:
(a) They were banned under the Law.
(b) They were of a type that is inconsistent with the provisions of any Law, if allowed by the same.
(c) They contained fraud.
(d) They included or involved the occurrence of an illegal damage to another person or the property thereof.
(e) The Court considered them immoral or incompatible with the public order.
In all these cases, the benefit and purpose in any agreement shall be considered illegal.
2-Any agreement containing illegal benefit or purpose shall be considered void.
Article 28 - The Agreement is Void if the Benefits and Purposes are Partially Illegal
If some of the benefit was for one purpose or more, or several benefits for one illegal purpose, the agreement shall be void.
Article 29 - Promise without benefit shall be void unless it was written out of natural love and passion or
was a promise of compensation for a thing that took place or a promise to settle a masked debt by
prescription.
1-A promise without benefit cannot be implemented under the Law unless:
(a) It was written and took place because of natural love and passion between close parties.
(b) It was a promise of compensation, in whole or in part, to a person who already carried out something on behalf of the
promisor or carried out a work that the promisor was obliged to carry out under the Law.
(c) It was a written and signed promise by the person or his authorized representative, bound, generally or particularly, to
settle, in whole or in part, a debt that the creditor shall collect if it was not for the prescription of the lawsuits.
In any of these cases, the promise shall be implemented in the same manner of implementation of the contract that includes a
benefit.
2-The current agreement shall not be considered void with the contentment and choice of the promisor, due only to the
inadequacy of the benefit. However, the Court may take the inadequacy of the benefit in consideration when deciding if the
contentment of the promisor was voluntarily and by choice.
3-This Article shall not affect the relation between the donator and the donated concerning the validity of a donation that
already occurred.
Article 30 - The Agreement to prevent a Marriage is Void

The agreement to prevent the marriage of any person other than a minor shall be void.
Article 31 - The Agreement to prevent Trading is Void

1-Any agreement preventing any person from exercising a legitimate profession, craft or trade of any type, shall be void to the
extent of the prevention contained therein, except the agreement to prevent the exercise of a trade of which the goodwill was
sold.
2-Despite paragraph 1 of this Article, whoever sells goodwill may agree with the purchaser to refrain from the exercise of a
similar trade, within certain local limits, as long as the purchaser, or any person to whom the goodwill was transferred, is
exercising a similar trade. These limits shall be reasonable as deemed by the Court, taking in consideration the nature of the
trade.
Article 32 - Invalidity of the Agreement to prevent Judicial Proceedings

1-Any agreement preventing one of its parties, in an absolute manner, from the implementation of his rights in any contract
or under the latter, as per the usual judicial proceedings in ordinary Courts, or requiring the determination of a period in which
these rights may be implemented, shall be considered void to the extent of the prevention contained therein.
Except the Contract to refer a Dispute to Arbitration
2-a-Paragraph 1 of this Article does not consider any contract as violating to the Law in case two persons or more agree
thereunder to refer any dispute that may arise between them, concerning any subject or types of subjects, to arbitration,
provided that the decided amount in such arbitration shall be the only amount to be collected concerning the dispute referred
in the said manner.
Matters hidden in these Contracts
b-A lawsuit to implement any contract in kind, of the type set forth in the precedent clause of this paragraph, may be filed. In
such event, the Court may issue its order to appoint one or more arbitrators or otherwise, as it deems it necessary, in order to
implement the contract in kind. If one of the parties of the said contract filed a lawsuit against the other party, for a purpose
other than implementation in kind or to not collect the amount decided by arbitration, which is related to any matter agreed
between them to be referred to arbitration, then the contract shall be considered as preventive of hearing the lawsuit.
Except the Contracts of Referral of Existing Matters
3-Paragraph 1 of this Article does not consider any written contract agreed upon between two persons or more, to refer any
existing matter between them to arbitration, as contrary to the Law and does not affect any law in force at the time concerning
referrals to arbitration.
Article 33 - Mystery shall invalidate Agreements:

Every agreement with no specified meaning or of which the meaning cannot be specified, shall be considered void.
Article 34 - The Agreement by Way of Bet shall be Void

1-The agreement by way of bet shall be considered void and no lawsuit shall be filed to collect anything that is allegedly
gained in any bet or deposited at any person to follow any game or event that was not achieved but was subject to bet.
2-Any agreement to promote an agreement of bet or to assist in entering into such an agreement, for the implementation,
achievement or guarantee thereof or to guarantee its implementation, shall be considered void. No lawsuit shall be filed to
collect any amount of money paid, or to be paid, under such an agreement.
3-No person shall have the right to file a lawsuit to claim any commission, brokerage or reward for the implementation,
accomplishment or assistance in the implementation or accomplishment of any agreement by way of bet. He shall not have the
right to claim any required amounts or that may be required under any agreement by way of bet or by virtue of an agreement
as mentioned above, as long as it carried out the said works while being aware that they are related to the bet agreement,
whether the plaintiff is a party in the agreement or not. No lawsuit shall be filed to collect any amount paid, or may be paid,
while being aware of the same, to other persons by way of commission, brokerage or reward concerning such a bet agreement
or concerning any agreement of the above-mentioned type.
Title 3 - Outstanding Contracts
Article 35 - Definition of Outstanding Contract

The outstanding contract is the contract related to the performance of a certain act or to the refrainment from the same, even
if a side event of that contract occurred or not.
Article 36 - Implementation of Outstanding Contracts related to the Occurrence of an Event

Every contract related to the performance of a certain act or to the refrainment from the same, in case of occurrence of an
event that is unlikely to take place in the future, shall not be implemented under the Law unless after occurrence of such
event. In case this event becomes impossible, these contracts shall be considered void.
Article 37 - Implementation of Outstanding Contracts related to the Non-occurrence of an Event

The contracts related to the performance of a certain act or to the refrainment from the same shall be implemented in case of
non-occurrence of an event that is unlikely to take place in the future when the occurrence of such event becomes impossible
and not before that.
Article 38 - When the Event on which the Contract depends is considered impossible if the Behaviours
were made by a Living Person
If the future event on which the contract depends is the method in which a person behaves at an unspecified time, the event
shall then be considered impossible when such person carries out an act that makes it impossible to behave this way within
any specified period, unless other matters take place.
Article 39 - When the Outstanding Contracts related to the Occurrence of a Specific Event during a Certain
Time become Void
1-The contract concluded for the performance of an act or for the refrainment from doing so, in case of occurrence of an event
that is unlikely to take place in the future during a certain time, shall become void if such event does not take place after such
time or if the event becomes impossible before that time.
When the Contracts related to the Non-occurrence of a Specific Event during a Certain Time are implemented:
2-The contract concluded for the performance of an act or for the refrainment from doing so, in case of non-occurrence of an
event that is unlikely to take place during a certain period, may be implemented under the Law when the time passes without
the occurrence of such event or if it was confirmed earlier that it will not occur.
Article 40 - Agreements depending on Impossible Events are Void

The agreements for the performance of an act or for the refrainment from doing so and depending on the occurrence of an
impossible event shall be void, whether such event is known by the parties of the agreement, upon its conclusion, or not.
Title 4 - Implementation of Contracts

Contracts to be implemented
Article 41 - Obligations of the Contracts’ Parties

1-The contracts' parties shall either implement, or offer to implement their promises, each in his own concern, unless such
implementation was exempted or excused under the provisions of this Law or any other law.
2-The promises shall be binding to the representatives of the promisors in case of death of the promisors before
implementation, unless it was stated in the contract that the intent is otherwise.
Article 42 - Effect of Refusal to accept the Offer of Implementation

1-When the promisor offers implementation to the promised and the latter does not accept, the promisor shall then not be
liable for non-implementation and shall not lose his rights in the contract.
2-The said offer shall meet the following conditions:
(a) It shall not be restricted.
(b) It shall be made in the right place and time and under circumstances as to leave to the person to whom the offer was made,
a reasonable opportunity to ensure that the person making the offer is able to perform all obligations of his promise and he is
willing to do so.
(c) If the offer was to hand over an item to the promised, the latter shall be given adequate opportunity to ensure that the
offered item is the same item promised to be handed over.
3-The offer made to one of several promised jointly shall have the same legal consequences as the offer made on all of the
promised.
Article 43 - Impact of the Refusal of the Party to fully implement the Promise
If any party refuses to fully implement his promise or renders himself unable to do so, the promised may terminate the
contract unless he had expressed, verbally or through his conduct, to proceed with it.
The Person who shall implement the Contract
Article 44 - The Person to implement the Contract

If it was found, naturally, that the intent of the contractors is that the promisor implements, by himself, any promise included
in the contract, the promisor shall implement such promise. In other cases, the promisor or his representatives may employ a
competent person for the implementation.
Article 45 - Impact of Acceptance of Implementation by a Third Person

When the promised accepts that the promise is implemented by a third person, he shall not later on implement it against the
promisor.
Article 46 - Transfer of Common Obligations

If two persons or more are related by a joint promise, and unless the contract proves otherwise, all these persons shall be
jointly liable for the implementation of the promise. In case of decease of one of them, his representative shall be jointly liable
with the others who are still alive. In case of decease of the last one alive, the representatives of all of them shall be jointly
liable.
Article 47 - Assignment of the Promisor to participate in the Implementation

1-If two persons or more give a joint promise, the promised may, unless there was an explicit agreement otherwise, assign one
or more of the said promisors to implement the promise in full.
Each of the Promisors shall have the Right to claim the Contribution of his Partners:
2-Each of the joint promisors, who implemented a joint promise, may ask all the other promisors, to contribute equally with
him, unless it is stipulated otherwise in the contract.
Bearing the Loss resulting from the Failure to contribute:
3-If one of the joint promisors fails to contribute by his share as stated above, the remaining joint promisors shall bear the loss
resulting from the same equally.
4-Paragraphs 1 and 3 of this Article shall not prevent the guarantor from recovering any amounts paid on behalf of the
principal, and shall not allow the principal to recover any amounts paid by him from the guarantor.
5-Any judgment issued against one or more of the total joint promisors shall not prevent the filing of a second lawsuit against
the rest of the promisors for the unsettled part of the decided debt.
Article 48 - Impact of the Exemption of one of the Joint Promisors

If two or more persons are related in a promise, the discharge of one of them by the promised shall not exempt the others from
their liability and this shall not exempt the promisor who was discharged as mentioned, from his liability towards the other
promisors.
Article 49 - Conversion of the Common Rights

If a person gives a promise to two persons or more jointly, and unless the contract stipulates otherwise, the right to claim
implementation between them, shall be reserved to the promised while they are alive and after the decease of one of them, by
the representatives of the latter jointly with the rest of the promised who are still alive, and after the decease of the last one,
by all their representatives jointly.
Time and Place of Implementation
Article 50 - Time of Implementation of the Promise without Request and without Specification of the
Period
1-If the contract does not stipulate its implementation upon the request of the promised and if the time of implementation
was not specified, the promise shall be implemented within a reasonable period of time.
2-The reasonable period of time shall be considered, in each case, a matter of reality.
Article 51 - Time and Place of Implementation of the Promise upon Specification of the Period but without
Request
If the promise shall be implemented on a specified day and the promisor had committed to implementing the same, without a
request from the promised, the promisor may implement it at any time during the ordinary working hours and on the day and
place where it should be implemented.
Article 52 - Necessity of Request of Implementation on a Specified Day and in the Right Time and Place
1-If it was necessary to implement a promise on a specified day and the promisor did not implement the same without a
request from the promised, the latter shall request implementation in the right place and during the ordinary working hours.
2-The right time and place shall be considered, in each case, as a matter of reality.
Article 53 - Place of Implementation of the Promise without Request and without Specification of the
Place of Implementation
If it was necessary to implement a promise, without a request from the promised, and the place of implementation was not
specified, the promisor shall ask the promised to specify a suitable place for the implementation of the promise and shall
implement it in that place.
Article 54 - Implementation in the Required Manner and Time or as Approved by the Promised
Any promise may be implemented in any manner or at any time, according to the request of the promised or the approval
thereof.
Implementation of Reciprocal Promises
Article 55 - Non-commitment of the Promisor to implement unless the Reciprocal Promised is ready and
willing to Implement
If a contract contains reciprocal promises that shall be implemented together, a promisor shall not be bound to implement his
promise unless the promised is ready and willing to implement his reciprocal promise.
Article 56 - Order of Implementation of Reciprocal Promises

If the contract explicitly stipulates the order of implementation of reciprocal promises, they shall be implemented in that
order; otherwise, they shall be implemented according to the order required by the nature of the transaction.
Article 57 - Responsibility of the Party who prevents the Occurrence of the Event on which the Contract
depends
If the contract included reciprocal promises and one of the parties prevented the other from implementing his promise, the
promise shall become cancellable by the party who was prevented as mentioned above and he shall have the right to receive
compensation from the other party for the losses incurred by him due to the non-implementation of the contract.
Article 58 - Impact of Refusal to implement the Promise to be implemented first in a Contract consisting
of Reciprocal Promises
If a contract consists of two reciprocal promises and none of them can be implemented or requested to be implemented before
the other, and the promisor of the promise stated last, failed to implement it, such promisor shall not have the right to claim
the implementation of the reciprocal promise and shall compensate the other party for any loss incurred by that other party
due to the non-implementation of the contract.
Article 59 - Impact of Failure to implement at the Time Specified in the Contract when the Time Factor is
Essential
1-If a party in a contract promises to perform a specified act(s) at or before a specified time(s), and failed to do so, the
contract, or the part not implemented of the latter, shall be cancellable by the promised if the parties considered the time
factor as essential in the contract.
Impact of such Failure when the Time is not essential:
2-If the parties did not consider the time factor as essential in the contract, the contract shall not become cancellable due to
the failure to implement the subject of the agreement at or before the specified time. However, the promisor shall compensate
the promised for any losses incurred by him as a result of such failure.
Impact of Acceptance of Implementation at a Time other than that Agreed upon:
3-If the promised accepts, in case of a contract cancelled because of the failure of the promisor to implement his promise at
the time agreed upon, to implement the promise at any time other than that agreed upon, the promised shall not have the
right to claim compensation for any loss resulting from the non-implementation of the promise at the specified time, unless
the promisor gives, upon accepting the said implementation, a notice of his intention to do so.
Article 60 - Agreement to perform an Impossible Act

1-The agreement to perform an impossible act shall be, naturally, void.
Contracting to perform an Act that became impossible or illegal later on:
Contracting to perform an Act that became impossible or illegal later on:

2-Every contract to perform an act that became impossible or illegal, after concluding the contract, because of an event that
could not prevented by the promisor, shall be void.
Contracts of which Parts became Impossible:
3-The contract shall not be considered impossible to implement in whole if a part of it became non-existent at the time of
implementation.
Compensation for Loss because of non-performance of the Act known as Impossible or Illegal
4-If a person promises to perform an act while he is aware, or is able through reasonable effort to be aware, that it is
impossible or illegal to implement his promise and the promised was not aware of the same, the promisor shall compensate
the promised for any loss incurred by him due to the non-implementation of the promise.
Article 61 - Reciprocal Promise to perform Legal Acts and other Illegal Acts
If certain persons conclude reciprocal promises to perform legal acts first, then, in certain cases, other particular illegal acts,
the first group of promises shall form a contract and the second group shall be a void agreement.
Article 62 - Alternative Promise in case one of its Parts is Illegal

When one part of the alternative promise is illegal and the other legal, the legal part shall only be implemented.
Allocation of Payments
Article 63 - Purpose of Payment – when the Settled Debt is specified

1-If the debtor who is indebted of several separate debts to one person, makes a payment to that person while stating that this
payment is for the settlement of a specified debt, or under circumstances suggesting the same, the payment, if accepted, shall
be disposed of in this manner.
When the Settled Debt is not specified:
2-If the debtor does not specify the purpose of payment and the other circumstances do not suggest the same, the creditor may
allocate the payment for the settlement of any legal debt due from the debtor as it deems appropriate, whether the collection
of such debt is prescribed by time under the Law in force at the time or not.
Upon Non-specification by Either Party:
3-If none of the parties specifies the settled debt, the payment made shall be considered as settlement of the debts according
to their chronological order, whether they were prescribed by time or not according to the Law in force at the time. If the debts
are of the same chronological level, the payment shall be considered as proportional settlement of each.
Contracts not to be implemented
Article 64 - Impact of Replacement, Termination and Amendment of the Contract

If the parties in a contract agree to replace the latter with a new contract, to terminate or amend the same, then the original
contract does not need to be implemented.
Article 65 - The Promised may renounce or abandon the Implementation of the Promise
Every promised may renounce or abandon the implementation of the promise given to him, in whole or in part, may extend
the implementation period or accept any compensation he deems proper as an alternative of the same.
Article 66 - Impact of Termination of the False Contract

If the contract was terminated by the party who has the choice to do so, the other party shall not be bound to implement any
promise made and included in the said contract. The party who terminates the false contract shall, if he obtained a benefit
under the same from the other party, return such benefit as much as possible, to the person from whom he obtained it.
Article 67 - Obligation of the Person who benefited from a Void Agreement or a Contract that became Void
If an agreement is found void or a contract becomes void, any person who obtained a benefit under this agreement or contract
shall return the same or compensate for the same to the person from whom he obtained it.
Article 68 - Method of Notification of Termination of the False Contract or Revocation of the Same
The notification of termination of the false contract or revocation of the same may be notified in the same manner, taking into
account the same rules in force at the time of notification of the offer or the revocation of the same.
Article 69 - Impact of Neglect of the Promised to create Reasonable Grounds to the Promisor for the
Implementation
In case the promised neglects or refuses to offer reasonable facilities to the promisor, for the implementation of his promise,
the promisor shall not be liable for any failure in the implementation resulting from the said negligence or refusal.
Implementation of the Contracts in Kind - a-The Contracts implemented in Kind
Article 70 - Cases where Implementation in Kind is Obligatory

1-Except as stated otherwise in this Title or in Article 32/2 (b), the Court may, at its discretion, order the implementation in
kind of any contract:
(a) If the act agreed upon is for the implementation of a trust, in whole or in part.
(b) If there is no measure to verify the actual damage resulting from the non-performance of the act agreed to be performed.
(c) If the monetary compensation is not the appropriate rectification for the non-performance of the act agreed upon.
(d) If it was possible not to obtain monetary compensation for the non-performance of the act agreed upon.
2-Unless and until it is proved otherwise, the Court may assume that the withdrawal from a contract to transfer immovable
property cannot be adequately rectified by monetary compensation and the withdrawal from a contract to transfer movable
property may be rectified in this manner.
Article 71 - Implementation in Kind of a Part of the Contract if the Non-implemented Part is small
If a party in the contract was unable to perform his share entirely and the part that was left without implementation was of a
small value compared to the total and subject to monetary compensation, then the Court, upon the request of any party, may
order implementation in kind of the part of the contract that can be implemented and may grant monetary compensation for
the negligence.
Article 72 - Implementation in Kind of a Part of the Contract if the Non-implemented Part is big
If a party in the contract was unable to perform his part entirely and the part left without implementation constitutes a fair
amount of the total or cannot be compensated with cash, he shall not have the right to obtain a decision of implementation in
kind. However, the Court may, upon the request of the other party, order the withdrawing party to implement in kind his part
of the contract that can be implemented, provided that the plaintiff waives any claim of implementation of the rest and any
right of compensation, whether by compensation for the negligence or for the loss or damage resulting from the neglect of the
defendant.
Article 73 - Implementation in Kind of a Separate Part of the Contract

When the implementation in kind of a part of the contract, if taken alone, is possible and forms an obligation, due to its
separate and independent position from the other part of the same contract that cannot or should not be implemented in kind,
the Court may order the implementation in kind of the first part.
Article 74 - Impediments of Implementation in Kind of a Part of the Contract in the Other Cases
The Court shall not order implementation in kind of a part of the contract except in the cases stated in the last three preceding
Articles.
Article 75 - Rights of the Purchaser and Tenant towards the Seller and the Lessor of an Incomplete
Property
If a person concludes a contract for the sale or rent of a particular property, even though such property is incomplete, the
purchaser or the tenant shall have the following rights (unless it is stipulated otherwise in this Title):
(a) If the seller or lessor has, after the sale or rent, a benefit in the money, the purchaser or the tenant may oblige him to
implement the contract to the extent allowed by the said interest.
(b) If the validity of the property requires the approval of other persons and these persons were obliged to transfer upon the
request of the seller or lessor, the purchaser or tenant may oblige him to obtain such approval.
(c) If the seller or lessor filed a lawsuit for the implementation in kind of the contract and the lawsuit was rejected because of
his incomplete property, the defendant shall have the right to recover his advance payment (if any), its interests and his
expenses in the lawsuit and shall seize the property of the seller or lessor agreed to be sold or rented against such advance
payment, the interests and expenses.
Article 76 - Validity of the Judgment of Compensation in Certain Cases

1-The person claiming the implementation in kind of a contract, may request as well compensation for the breach thereof in
addition to the implementation or as an alternative thereof.
2-If the Court deems, upon considering the lawsuit, not to order implementation in kind but there was a contract between
2-If the Court deems, upon considering the lawsuit, not to order implementation in kind but there was a contract between
both parties violated by the defendant and the plaintiff is entitled to receive compensation for such violation, it shall decide
such compensation accordingly.
3-If the Court deems, upon considering the lawsuit, that the implementation in kind shall be granted but is not sufficient for
the achievement of justice and that the plaintiff shall receive compensation for the violation of the contract, it shall decide
such compensation accordingly.
4-The decided compensation as per this Article shall be estimated in the method ordered by the Court.
5-Any circumstance that renders it impossible to implement the contract in kind shall not prevent the Court from exercising
the authority granted to it under this Article.
Article 77 - The Estimated Compensation shall not prevent the Implementation in Kind
The contract may be implemented in kind, if it is valid for the same from the other aspects, even if an amount is specified
therein to be paid upon violation thereof, and despite the fact that the violating party is ready to pay the said amount.
b-The Contracts that cannot be implemented in Kind
Article 78 - The Contracts not implemented in Kind

The following contracts shall not be implemented in kind:
(a) The contract in which the monetary compensation consists a sufficient rectification for the non-implementation thereof.
(b) The contract that contains several or accurate details, that depends on the personal competencies or wills of the parties, or,
by nature, the Court cannot order the implementation in kind of its essential clauses.
(c) The contract that the Court is not able to verify the conditions thereof in a reasonable manner.
(d) The contract that is, by nature, cancellable.
(e) The contract concluded by the trustees by exceeding their powers or breaching the trust.
(f) The contract concluded by a legal entity established for private purposes, or on behalf thereof, or by its founders, and that
exceeds its powers.
(g) The contract of which the implementation requests the performance of a continuous duty with a period exceeding three
years with effect from the date thereof.
(h) The contract of which an essential part was existent, as considered by the parties, despite being, in reality, removed before
conclusion of the contract.
c-On the Option of the Court
Article 79 - Option to grant Implementation in Kind

The authority to grant implementation in kind shall be optional and the Court shall not be obliged to grant such rectification
just because of its legitimacy. However, the option of the Court shall not be arbitrary but reasonable and based on judicial
principles.
The Court shall exercise its option of refusing to issue an order of implementation in kind in the following cases:
1-If the circumstances under which the contract was concluded grant the plaintiff an unfair advantage at the expense of the
defendant, despite the absence of deception or sedition by the plaintiff.
2-If the implementation of the contract causes unexpected hardship to the defendant, despite the fact that his non-
implementation does not affect the plaintiff.
The Court shall exercise its option of granting the implementation in kind in the following case:
3-If the plaintiff carried out valuable work or incurred a loss due to a contract that can be implemented in kind.
d-Worthy of Implementation in Kind of the Contract
Article 80 - The Person who can obtain Implementation in Kind

Except as stated otherwise in this Title, the implementation in kind of the contract may be granted to:
(a) Any party thereof.
(b) Representative or attorney of any party thereof.
This shall require that the said representative or attorney shall not have the right to claim implementation in kind in any case
where the practical capacity, skill, financial capacity or any character of the party constitutes an essential element of the
contract or in any case where the contract stipulates not to transfer the said benefit, unless he already implemented the part
related to him in the contract.
(c) If the contract includes a settlement on marriage or reconciliation for non-fixed rights among members of the same family,
then the beneficiary of such settlement or reconciliation.
(d) The owner of the rest if the contract was concluded between a tenant for life and exercised one of his powers properly.
(e) The person to whom the ownership was transferred, if the contract is a current obligation by his predecessor in the
ownership and has the right to benefit from such obligation.
(f) The person to whom the rest is transferred, when the agreement is such an obligation, having the right to take advantage of
any benefit arising therefrom and who will be materially damaged by its withdrawal.
(g) If a legal entity enters a contract then is merged with another entity then the new entity resulting from the merger.
(h) The legal entity, if its founders, before its establishment, entered a contract for the purposes thereof and the establishment
conditions allowed the same.
e-The Persons Deprived of the Implementation in Kind
Article 81 - Personal Impediments to Rectification

The implementation in kind of a contract shall not be granted to any person:
(a) Who does not deserve compensation for the violation thereof.
(b) Who becomes unable to meet one of the essential conditions of the contract that he is still bound to implement, or who
violates the same.
(c) Who chose his own rectification and obtained a consolation for the claimed violation in the contract.
(d) Who was aware, prior to the contract, that a settlement was made concerning the subject thereof and that it was valid at
the time (despite not being based on a valuable benefit).
Article 82 - Contracts for the Sale of Property by the Non-owner or Donator

Every contract for the sale or rent of a movable or immovable property shall not be implemented in kind for the benefit of a
seller or lessor:
(a) Who sold or leased the property, while being aware that he is not the owner thereof.
(b) Who is not able to transfer a property, without any reasonable suspicion, to the purchaser or tenant, at the time specified
by the parties or by the Court for the completion of the sale or rent, even though he concluded the contract while believing his
ownership of the property is valid.
(c) Who made, before concluding the contract, a settlement on the subject of the contract (even if not based on a valuable
benefit).
(d) Who is deprived of implementation in kind unless with amendment.
f-The Persons Deprived of Implementation in Kind unless with Amendment
Article 83 - Non-implementation unless with Amendment

If the plaintiff seeks the implementation in kind of a written contract that the defendant made an amendment thereto, the
plaintiff shall not have the right to obtain the said implementation unless with such amendment, in the following cases:
(a) If the contract to be implemented is different, as per its wording, because of a deception or error, than the contract
assumed existent by the defendant upon contracting.
(b) If the defendant, because of a deception, error or surprise, concluded the contract with a reasonable misunderstanding of
its impact between him and the plaintiff.
(c) If the defendant, while being aware of the contract's conditions and having understood its impact, entered such contract
based on a sedition made by the plaintiff or based on a condition by the latter that is added to the contract and refused to be
met by the plaintiff.
(d) If the purpose of both parties is to reach a specific legal result and it is not expected to take place because of the form of the
contract.
(e) If both parties agreed to amend the contract after conclusion thereof.
g-The Persons whose Contracts are implemented in Kind
Article 84 - Rectification towards the Parties and Persons who received the Ownership later on
Except as stated in this Title, the contract may be implemented in kind towards:
(a) Any of the parties thereof.
(b) Any person who received ownership from any party at a subsequent time to the contract, except the person to whom the
value was transferred and his money paid in good faith without being aware of the original contract.
value was transferred and his money paid in good faith without being aware of the original contract.
(c) Any person claiming ownership that the defendant may acquire, even if precedent to the contract with the knowledge of
the plaintiff.
(d) The new legal entity resulting from the merger of a legal entity concluding a contract with another legal entity.
(e) The legal entity, if its founders had contracted before its establishment, provided that the legal entity had approved and
adopted the contract and the establishment conditions authorize the conclusion of the contract.
h-The Persons whose Contracts are not implemented in Kind
Article 85 - The Parties not obliged to implement

The contract shall not be implemented in kind towards one of its parties in the following cases:
(a) If the benefit he will obtain is very inadequate as per the prevailing conditions on the date of the contract, making it, by
itself, or in addition to other circumstances, evidence to a deception or illegal character obtained by the plaintiff.
(b) If his approval was made by sedition (deliberately or not), by deception or unfair means by any party who is entitled to
request implementation under the contract or by a promise issued by such party without meeting it substantially.
(c) If his approval was made by an erroneous impact, misunderstanding or surprise, provided that if the contract stipulated
compensation in case of error, it is possible to grant compensation within this law and the contract shall be implemented in
kind from the other aspects if it is valid for the same.
i-Impact of Rejection of the Lawsuit of Implementation in Kind
Article 86 - Prevention of the Lawsuit of Violation after Rejection

The rejection of the lawsuit of implementation in kind of the contract, or any part thereof, shall cancel the right of the plaintiff
to claim compensation for the violation of this contract, or the part thereof, as appropriate.
j-Termination instead of Implementation in Kind
Article 87 - Request for Termination within the Lawsuit of Implementation in Kind by Rotation
The plaintiff who filed a lawsuit of implementation in kind of a written contract may request, by rotation, the termination of
the contract and hand it over for cancellation, in case the contract may be implemented in kind. The Court may, if it refuses to
implement the contract in kind, order its cancellation and its handing over accordingly.
Title 5 - Some Relationships similar to Contractual Relationships
Article 88 - Claim of the Necessities provided to a Person who cannot conclude a Contract or for his own
Account
If a person unable to conclude a contract or any other person whose support is, as stipulated by the Law, on the responsibility
of the unable person, is provided with the appropriate and necessary needs of his living conditions, then the person who
provided such needs shall have the right to obtain their price from the money of the said unable person.
Compensation of the Person who pays Money due from another Person and who has Interest in the Payment thereof:
Article 89
The person who has interest in the payment of money, which another person is obliged to pay under the Law and he paid for
the said reason, shall recover that amount from the other person.
Article 90 - Obligation of the Person who obtains a Benefit from an Act not Free of Charge
If a person legitimately performs an act for another person or hands him over an item, not with the intention of donation, and
that person benefited from such matter, he shall be considered obliged to compensate the first for the performed act or the
handed over item or to return the latter.
Article 91 - Liability of the Collector of Money

Whoever collects the money of another and keeps it shall be considered liable like the bailee.
Article 92 - Liability of the Person to whom the Money was paid or to whom an Item was handed over by
Error or by Coercion
The person to whom the money was paid or an item was handed over by error or by coercion shall be obliged to pay such
money or to return the item.
Title 6 - Impact of Violation of the Contract
Article 93 - Compensation for the Loss or Damage resulting from the Violation of the Contract or a Similar
Commitment
1-If a contract was violated, the party damaged by such violation may obtain compensation from the violating party for any
loss or damage incurred by him as a consequence thereof, which resulted, naturally, from the normal course of things due to
such violation or from the expectations of the parties, upon conclusion of the contract, to occur as a result of the violation.
2-Such compensation shall not be granted for any loss or damage of which the occurrence is not directly and closely related to
the said violation.
3-In case an obligation arises, similar to the obligations arising from a contract, and it was not met, any person who was
damaged by the fact of not meeting such obligation may obtain the same compensation from the violating party as if such
party had concluded a contract to meet such obligation and failed to do so.
4-Upon estimating the loss or damage resulting from the violation of a contract, the means that were available to avoid the
damage resulting from the non-performance of the contract shall be taken in consideration.
Article 94 - Compensation for the Violation when the Text states the Fine
1-Upon violation of a contract that includes the amount to be paid in case of violation or if the contract included any other
condition by way of fine, the person complaining from the violation, whether he was able to prove the occurrence of the
damage or loss because of such violation or not, may obtain the reasonable compensation without exceeding the stated
amount or the fine set forth in the contract.
2-The requirement to increase the interest from the date of violation may be considered as condition by way of fine.
3-Notwithstanding the provisions of paragraph 1 of this Article, if a person is committed through a self-guarantee, judicial
pledge or any instrument of the same type or if he is committed under the provisions of any Law to undertake to carry out a
public duty or act with a benefit to the public, he shall be liable, upon violation of any condition in such instrument, for the
payment of the whole amount mentioned therein.
Article 95 - Right of Compensation to the Person who lawfully terminated the Contract
The person who was right in the termination of the contract shall be entitled to receive compensation for any damage incurred
by him due to the non-implementation of the contract.
Title 7 - Guarantee and Warranty
Article 96 - Definition of the Guarantee Contract

The guarantee contract is a contract in which a party is committed to compensating the other for the loss incurred by the latter
and resulting from the actions of the guarantor himself or the actions of any other person.
Article 97 - Rights of the Guaranteed at the Lawsuit

The promised in a guarantee contract may, while acting within his powers, obtain the following from the guarantor:
(a) All the amounts judged in compensation for the damage, in any lawsuit, and that shall be paid in respect of any matter
covered by the guarantee promise.
(b) All the expenses he is obliged to pay in any similar lawsuit if he had not violated the orders of the promisor in the filing or
the defense thereof and in which he acted wisely as if there was no guarantee contract or if the promisor authorized him to file
the lawsuit or defend in the latter.
(c) All the amounts paid by him by virtue of the conditions of any reconciliation in any such lawsuit, if the reconciliation does
not violate the orders of the promise and it was wise to be held by the promised as if the guarantee contract does not exist or if
authorized by the promisor for reconciliation in the lawsuit.
Article 98 - Sponsorship and Sponsor and Original Debtor and Creditor Contract
The sponsorship contract is a contract for the implementation of the promise made by a third person or for meeting an
obligation upon withdrawal. The giver of sponsorships shall be called sponsor, the person to whom the sponsorship was given
for his withdrawal shall be called original debtor and the person to whom the sponsorship was given shall be called creditor.
The sponsorship shall be either oral or written.
Article 99 - Benefit in Sponsorship

Any act taking place or any promise given for the benefit of the original debtor may be a sufficient benefit for the sponsor to
give sponsorship.
Article 100 - Liability of the Sponsor

The liability of the sponsor is as much as that of the original debtor, unless the contract stipulates otherwise.
Article 101 - Continuous Sponsorship

The sponsorship covering a series of transactions shall be called continuous sponsorship.
Article 102 - Cancellation of the Continuous Sponsorship

1-The sponsor may cancel the continuous sponsorship at any time concerning the coming transactions by giving notice to the
creditor.
2-The death of the sponsor shall be considered as cancellation concerning the coming transactions unless the contract
stipulates otherwise.
3-Paragraph 1 of this Article shall not be applied on the sponsorship instrument given before the issuance of the order to
manage the estate.
Article 103 - The Liability of Two Liable Persons as per the Agreement concluded between them shall not
be affected as per one of them being a Sponsor upon Withdrawal of the other
If two persons conclude a contract with a third person to bear a certain commitment and they concluded a contract between
them so that one of them is liable alone upon withdrawal of the other and the third person is not a party in the second
contract, then the commitment of each of these two persons towards the third persons under the first contract shall not be
affected by the second contract even if the third person is aware of its presence.
Article 104 - Discharge of the Sponsor to change the Contract Conditions

Every change made to the conditions of the contract between the original debtor and the creditor, without the consent of the
sponsor, shall discharge the sponsor as per the transactions subsequent to the change.
Article 105 - Discharge of the Sponsor by the Acquittal or Discharge of the Original Debtor
1-The sponsor shall be discharged by any contract between the creditor and the original debtor, which would discharge the
original debtor, or by any act or refrainment by the creditor resulting from the discharge of the original debtor under the Law.
2-Despite paragraph 1 of this Article, the sponsor shall not be discharged merely if the creditor's right towards the original
debtor is hidden as per time prescription.
Article 106 - Discharge of the Sponsor if the Creditor reconciled with the Original Debtor, granted him an
Additional Period or agreed not to file a Lawsuit against him
The contract between the creditor and the original debtor, including reconciliation with the original debtor or a promise to
grant him an additional period or not to file a lawsuit against him, shall discharge the sponsor unless the sponsor agrees upon
this contract.
Article 107 - Non-discharge of the Sponsor under the Agreement made with a Third Person to grant an
Additional Period to the Original Debtor
If the creditor concludes a contract with a third person and not with the original debtor, to grant an additional period to the
original debtor, the sponsor shall not be discharged.
Article 108 - Slow Litigation by the Creditor shall not discharge the Sponsor
The mere slowness of the creditor in filing a lawsuit against the original debtor or in exercising any other rectification against
him, shall not discharge the sponsor unless the sponsorship stipulates otherwise.
Article 109 - The Joint Discharge of a Sponsor shall not discharge the others
In case of several joint sponsors, the discharge of one of them by the creditor shall not discharge the others and shall not
exempt the discharged sponsor from his liability towards the other sponsors.
Article 110 - The Discharge of the Sponsor by an Act or Refrainment made by the Creditor may prejudice
the Final Rectification of the Sponsor
In case the creditor commits an act that is inconsistent with the rights of the sponsor or refrained from carrying out an act that
he is compelled to carry out as per his duty towards the sponsor, which resulted into violation of the final rectification of the
sponsor himself towards the original debtor, then the sponsor shall be discharged.
Article 111 - Rights of the Sponsor upon Payment or Implementation

The sponsor shall have all the rights of the creditor towards the original debtor if he pays or implements all his obligations, in
case of maturity of the sponsored debt or the failure of the original debtor from the implementation of the sponsored
obligation.
Article 112 - The Sponsor’s Right to benefit from the Creditor’s Guarantees
The sponsor may benefit from every guarantee that the creditor has towards the original debtor at the time of concluding the
sponsorship contract, whether the sponsor is aware of the presence of this guarantee or not. If the creditor loses or abandons
such guarantee without the consent of the sponsor, the latter shall be discharged to the extent of the value of the guarantee.
Article 113 - The Sponsorship by Sedition is Invalid

The sponsorship shall not be valid if it takes place by sedition from the creditor or by his knowledge and consent on an
essential part of the transaction.
Article 114 - The Sponsorship by Silence is Invalid

The sponsorship obtained by the creditor through his silence concerning substantial circumstances shall be invalid.
Article 115 - The Sponsorship and its Non-approval by the Creditor unless after the Participation of a Joint
Sponsor
If a person gives a sponsorship under the condition that the creditor shall not benefit from it unless after another joint sponsor
participates in it, the sponsorship shall not be valid if that other person does not participate.
Article 116 - Implicit Promise to Compensate the Sponsor

Every sponsorship contract shall include an implicit promise from the original debtor to compensate the sponsor. The latter
shall have the right to refer to the original debtor for every amount paid, rightfully, by virtue of the sponsorship, and not for
the amounts paid wrongfully.
Article 117 - Joint Sponsors obliged to contribute equally

The liability of the joint sponsors for the same debt or obligation, jointly or severally, under the same contract or under
different contracts, and with the knowledge of each other or not, shall be equal, so that every one of them pays a share of the
whole debt or the remaining part thereof without payment by the original debtor of the share of every one of the other
sponsors, unless the contract stipulates otherwise.
Article 118 - Liability of the Sponsors bound by Different Amounts

The sponsors bound by amounts are obliged to pay equally according to the limits allowed by the obligations of each.
Title 8 - Deposit
Article 119 - Definition of Deposit, Depositor and Depositary

1-A deposit is the handing over of a commodity from one person to another for a certain purpose, while contracting to return
it or dispose of it in any other way according to the instructions of the person who handed it over, upon completion of the
purpose. The person who hands over the commodity shall be called depositor and the recipient shall be called depositary.
2-Whoever holds the commodity of another person and signs a contract to preserve the same shall be considered a depositary.
In such event, the owner shall be considered the depositor of the said commodity, despite that it is not handed over by way of
deposit.
Article 120 - Method of Handing over to the Depositary

The handing over to the depositary shall take place by putting the commodity at the disposal of the intended depositary or any
person authorized to preserve the commodity on his behalf.
Article 121 - Obligation of the Depositary to state the Defects of the Deposit
The depositor shall reveal to the depositary, the defects of the deposit that he is aware of and that would substantially impede
the use of the deposit or exposes the depositary to extraordinary risks. If he fails to do so, he shall be liable for the damage
incurred by the depositary as a direct result of these defects. If the deposit of the commodity was by way of lease, the depositor
shall be liable for this damage whether he is aware of the deposit's defects or not.
Article 122 - Care of the Depositary

In all the cases of deposit, the depositary shall take care of the deposit as if it is his own commodity that is similar to the
deposit as per the quantity, type and value, under similar circumstances.
Article 123 - Non-liability of the Depositary upon Loss of the Deposit etc.
The depositary shall not be considered liable for the loss, destruction or damage of the deposit in case his care was as stated in
the preceding Article.
Article 124 - Termination of the Deposit by the Depositary violating the Deposit Conditions
The deposit contract shall become cancellable, according to the choice of the depositor, in case the depositary commits any act
related to the deposit that is not consistent with the deposit conditions.
Article 125 - Liability of the Depositary who uses the Deposit in an Unauthorized Manner
If the depositary uses the deposit in a way not conformant with the deposit conditions, he shall guarantee to the depositor any
damage occurring to the deposit as a result or during such use.
Article 126 - Impact of Combining the Deposit with the Depositary’s Commodity after the Permission of
the Depositor
If the depositary combines his own commodity with the deposit, after the permission of the depositor, the resulting
combination shall become the property of the depositor and the depositary according to the share of each therein.
Article 127 - Impact of the Combination without the Permission of the Depositor if the Sorting of the
Commodity is Possible
If the depositor combines his own commodity with the deposit, without the permission of the depositor, the share of each of
the depositor and the depositary, in the combined property, shall remain as it was before the combination, as long as the
goods can be sorted or the combination can be divided. However, the depositary shall bear the sorting or division expenses and
shall compensate the depositor for any damage caused by the combination.
Article 128 - Impact of the Combination without the Permission of the Depositor if the Sorting of the
Commodity is not possible
If the depositary combines his own commodity with the deposit, without the permission of the depositor, in a way that it is not
possible to separate the deposit from the rest of the commodity and return the same, the depositor shall then have the right to
obtain compensation from the depositary for the loss of the deposit.
Article 129 - Payment of the Necessary Expense by the Depositor

If the depositary shall, under the deposit conditions, preserve, transfer or dispose of the deposit in any way, without any
reward to him, the depositor shall pay the necessary expenses that the depositary incurred for the deposit.
Article 130 - Return of the Commodity Loaned for Free

Whoever lends an item for use may recover it, at any time, if the loan was for free, even if it was lent for a certain period or for
a particular purpose. However, if the lent person has acted, based on the fact that this loan is for a certain period or for a
particular purpose, in a way that the return of the lent item, before the time agreed upon, may cause him damage that would
exceed the benefit he obtained from the loan, the lender shall, if forced to return, compensate the lent person for the amount
of excess of the damage incurred as stated on the current benefit.
Article 131 - Return of the Deposit upon Expiry of the Period or Achievement of the Purpose
The depositary shall, without being requested, return the deposit or hand it over according to the orders of the depositor upon
expiry of the period for which it was deposited or after achievement of the purpose for which the deposit was made.
Article 132 - Liability of the Depositary in case of not Duly Returning the Deposit
If the depositary fails to return, hand over or submit the deposit in a timely manner, he shall compensate the depositor for any
loss, destruction or damage that is likely to occur to the deposit as of that time.
Article 133 - End of the Free Deposit by Death

The free deposit shall end by the death of any of the depositor and the depositary.
Article 134 - Right of the Depositor in the Increase or Benefit of the Deposit
The depositary shall, unless it is contracted otherwise, return to the depositor or upon the latter's orders, any increase or
benefit arising from the deposit.
Article 135 - Liability of the Depositor towards the Depositary

The depositor shall compensate the depositary for any loss incurred by the latter due to the fact that the depositor did not
have the right to deposit or return the deposit or to give orders in its regard.
Article 136 - Deposit by Joint Owners

If joint owners make a deposit, the depositary may hand over the latter to one of the joint owners or according to his orders
without the consent of the rest, unless it is agreed otherwise.
Article 137 - Non-liability of the Depositary for the Return to a Non-owner Depositor
If the depositor is not owner of the deposit and the depositary returned it to the depositor, or according to the order of the
latter, in good faith, the depositor shall not be liable for this handing over towards the owner.
Article 138 - Right of the Third Person who claims Ownership of the Deposit
If a person, other than the depositor, claims ownership of the deposit, he may refer to the Court to suspend its handing over to
the depositor and to decide upon its ownership.
Article 139 - Right of the Catcher of the Commodity in claiming the Offered Reward
The catcher of the commodity shall not have the right to sue the owner to compensate for the hardship and expenses incurred
by him by choice in order to preserve the said commodity and to find the owner. However, he shall have the right to keep the
commodity from the owner until payment of the compensation. Whereas the owner offers a certain reward to return the lost
money, the catcher may claim this reward and keep the commodity until payment of the reward.
Article 140 - When the Catcher of an Item may sell it if it is usually offered for Sale
If an item usually offered for sale is lost and the owner was not found after reasonable effort or he refused, when requested, to
pay the legal entitlements to the catcher, the latter may sell such item:
(a) If it is a property likely to be damage or to lose the biggest part of its value.
(b) If the legal entitlements of the catcher amount to two thirds of the item's value.
Article 141 - Right of the Depositary in Special Seizure

If the depositary, in accordance with the purpose of the deposit, offered a service involving the exercise of an act or an
experience for the deposit, he may, unless it is contracted otherwise, have the right to seize the deposit until he receives the
appropriate fee for the said services.
Article 142 - Right of General Seizure for the Bankers, Brokers, Tax Officers, Agents and Insurance Brokers
The bankers, brokers, tax officers and insurance brokers may seize any money deposited at them as a guarantee for a general
account balance, unless it is agreed otherwise. None other than the said persons shall have a similar right unless there is an
explicit agreement upon the same.
Deposits and Mortgages
Article 143 - Definition of Mortgage, Mortgager and Mortgagee

The deposit of a commodity as a security for the payment of a debt or implementation of a promise shall be called mortgage
and in such event, the depositor shall be called mortgager and the depositary mortgagee.
Article 144 - Right of Seizure by the Mortgagee

The mortgagee shall have the right to seize the mortgaged money, not for the payment of the debt or implementation of the
promise only, but also for any accrued interest on the debt and all necessary expenses incurred concerning the ownership or
preservation of the mortgaged item.
The mortgagee shall not have the right to seize the mortgaged item for a debt or promise other than that for which the
mortgage was made.
Article 145 - Assumption in case of Subsequent Advance Payments

The mortgagee shall not, with the absence of a contract of the same, seize the mortgaged item for any debt or promise other
than the debt or promise for which the mortgage was made. However it is assumed, with the absence of anything suggesting
the contrary, that this contract is valid for the subsequent advance payments made by the mortgagee.
Article 146 - Right of the Mortgagee who incurred Extraordinary Expenses

The mortgagee may receive from the mortgagor the extraordinary expenses incurred in the preservation of the mortgaged item.
Article 147 - Right of the Mortgagee upon Failure of the Mortgagor

1-If the mortgagor fails to pay the debt or to implement the promise for which the mortgage was made, at the specified time,
the mortgagee may claim the debt or promise from the mortgagor and seize the mortgaged item as collateral. He may also sell
the mortgaged item after giving the mortgagor a reasonable notice for sale.
2-If the outcome of this sale is less than the amount required for the mortgagee against the debt or promise, the mortgagor
shall remain obliged to pay the balance. If the outcome of sale exceeded the said due amount, the mortgagee shall pay the
excess to the mortgagor.
Article 148 - Right of the Defaulting Mortgagor in Recovery

If the time was specified for the payment of the debt or implementation of the promise for which the mortgage was made, and
the mortgagor fails to pay the debt or implement the promise at the specified time, he shall have the right to recover the
mortgaged item at any subsequent time before its sale. He shall, in such event, pay any expenses arising from his failure.
Article 149 - Mortgage by the Commercial Agent

1-If the commercial agent is in possession, with the consent of the owner, of the commodity or its title deed, every mortgage
made, in the course of ordinary activity of the commercial agent, shall be considered valid as if explicitly authorized (i.e. the
agent) by the owner of the commodity to do so. The mortgagee should have acted in good faith while not being aware, on the
date of mortgage, that the mortgagor is not authorized to mortgage.
2-In the first paragraph of this Article, the expressions “commercial agent” and “title deeds of the commodity” shall have the
following two meanings:
-Commercial agent: The commercial agent who has the right, during the normal practice of his work as agent, to sell or ship
the commodity for the purpose of sale, purchase of goods or borrowing money through the mortgage of the commodity.
-Title deed of the commodity: Including the bill of lading, port certificate, storage officer certificate, tax officer certificate,
railway receipt, the document or order to hand over the commodity and any other document used during the normal practice
of business as evidence of the possession of the good, the right to dispose of or that involves or shows that it involves the
authorization of the bondholder in the endorsement or handing over through the transfer or receipt of the commodity.
Article 150 - Mortgage by an Owner under a False Contract

If the mortgagor acquires the mortgaged item under a false contract according to the provisions of Articles 22 and 23 of this
Law and the contract was not terminated at the time of mortgage, the mortgagee shall acquire a full right in the mortgaged
item, provided that he acted in good faith without awareness of the shortage in the ownership of the mortgagor.
Article 151 - Mortgage where the Interest of the Mortgagor is Limited

1-If a person mortgages a commodity in which he has limited interest, the mortgagor shall be taken in consideration as per the
limits of this interest.
2-Paragraph 1 of this Article shall not prejudice the effect of the two last preceding articles of this Law.
Lawsuits of the Mortgagees and Mortgagors against Aggressors
Article 152 - Lawsuit of the Mortgagee or Mortgagor against the Aggressor

If a third person deprives the mortgagee from the use or acquisition of the mortgaged money or causes damage thereto, the
mortgagee may refer to any rectification that the owner has the right to refer to as if there was no mortgage. Each of the
mortgagor and mortgagee may sue the third person as a result of this deprivation or damage.
Article 153 - Division of the Damage or Compensation taking place in such Lawsuits
All that takes places in any lawsuit shall be divided between the mortgagor and the mortgagee according to the interest of each.
Title 9 - Agency
Appointment of Agents and Powers thereof
Article 154 - Definition of Agent and Principal

The agent is the person appointed by another person to carry out an act or to represent the latter in his relations with third
persons. The person for whom the act is carried out or the person represented shall be called principal.
Article 155 - Capacity of the Principal

Every sane person who reached the age of maturity, as per his own Law, may appoint an agent.
Article 156 - Capacity of the Agent

Between the principal and third persons, every person may be an agent. However, the person who is not sane and who did not
reach the age of maturity may not become agent as he shall bear responsibility towards the principal under the provisions
stated in this Title.
Article 157 - Non-necessity of Benefit

Benefit shall not be necessary in the agency.
Article 158 - Authorization of the Agent Explicitly or Implicitly

The authorization of the agent shall be explicit or implicit.
Article 159 - Definition of Explicit and Implicit Authorization

The authorization is explicit if it is made by verbal or written words. It is implicit if it is derived from reality, from all that has
been said or written, or from normal dealing methods, thus it shall be considered as reality.
Article 160 - Extent of Authorization to the Agent

1-The agent authorized to carry out an act, shall be authorized to do everything legitimate and necessary for such act.
2-The agent authorized to exercise a work, shall be authorized to do everything legitimate, necessary for such purpose or
known to be customary during the exercise of this work.
Article 161 - Authorization of the Agent in Cases of Emergency

The agent shall be authorized, in case of emergency, and in order to prevent the loss by the principal, to carry out all acts that
may be committed by any person of ordinary perception, in his special case and under similar circumstances.
Article 162 - When the Agent is Deprived of Representation

The agent shall not refer to another agent legitimately, to carry out the acts that he, explicitly or implicitly, undertook to carry
out, unless the customs and practice of the profession allow the same or in case the nature of the agency itself requires the
referral to a sub-agent.
Article 163 - Definition of Sub-agent

The sub-agent is the person employed by the original agent to work for him concerning the works of the agency.
Article 164 - The Duly Appointed Sub-agent replacing the Principal

1-If the sub-agent was appointed properly, he shall replace the principal towards third parties and the principal shall be bound
by his actions and liable for the same, as if he was an agent appointed by the principal in the first place.
Liability of the Agent for the Sub-agent:
2-The agent shall be liable towards the principal for the actions of the sub-agent.
Liability of the Sub-agent:
3-The sub-agent shall be liable for his actions towards the agent and not towards the principal, except in the case of fraud or
intentional infringement.
Article 165 - Liability of the Agent for the Sub-agent Appointed without Authorization
If the agent appoints a sub-agent, without being authorized to do so, he shall be considered, in his relationship with this
person, as the principal towards the agent and shall be liable for his actions towards the principal and towards third parties.
The principal shall not be considered represented by the person appointed in this manner nor liable for his actions and the sub-
agent shall not be liable towards the principal.
Article 166 - Relationship of the Principal with the Person Duly Appointed by the Agent in the Agency
Matters
If the agent is explicitly or implicitly authorized to appoint another person to work for the principal in the agency matters,
then the person appointed in this manner shall not be sub-agent of the principal but shall be considered agent of the latter
concerning the matters of the agency entrusted to him.
Article 167 - Duty of the Agent upon Appointment of this Person

The agent shall, upon choosing the said agent for his principal, choose a man of good conduct as if choosing an agent for
himself. If he does so, he shall not be liable towards the principal for the acts or the shortage of the agent appointed in this
manner.
Permission
Article 168 - Right of the Person for his Ongoing Actions without Authorization, Impact of Permission
If a person carries out some acts on behalf of another without the knowledge or authorization of the other, the latter may
either permit these acts or reject them. Such permission shall have the same effects as if the acts were authorized by him.
Article 169 - Explicit or Implicit Permission

The permission shall be either explicit or implicit resulting from the actions of the person on behalf of whom the acts were
carried out.
Article 170 - Condition of Knowledge for the Valid Permission

The permission made by a person who was not fully aware of the facts in a fundamental manner shall not be valid.
Article 171 - Impact of Permission of the Act without Authorization, which is Part of a Transaction
If a person permits an act carried out by another on his behalf and without authorization, he shall be considered having
permitted the whole transaction of which the act is a part, without prejudice to the provisions of the last preceding Article of
this Law.
Article 172 - The Third Party shall not be damaged by the Permission of the Ongoing Act without
Authorization
The act carried out by a person on behalf of another and without authorization of the other person and that act may, even if
authorized, expose a third party to damage or terminate a right or benefit of a third party, this act shall not have the said
impact because of the permission.
Cancellation of Authorization
Article 173 - Termination of the Agency

The agency shall be terminated upon cancellation of the authorization by the principal, upon waiver of the agency affairs by
the principal, upon completion of the agency affairs, upon decease or dementia of the principal and agent or upon
adjudication of the principal's bankruptcy by virtue of the provisions of any Law related to the exempt of the bankrupt debtors
that is in force at the time.
Article 174 - Termination of the Agency if the Agent has an Interest in the Subject
If the agent himself has an interest in the property covered by the agency, the latter shall not be terminated in a way that
would prejudice such interest, unless there is an explicit agreement otherwise.
Article 175 - When the Principal cancels the Authorization of the Agent
The principal may, except as stated otherwise in the last preceding Article, terminate the authorization given to his agent at
any time before exercise of the authorization in a way that is binding to the principal.
Article 176 - Cancellation after Partial Exercise of the Authorization

The principal shall not cancel the authorization given to his agent after the partial exercise of such authorization by the agent,
as far as it is related to the acts and obligations arising from the acts already carried out under the agency.
Article 177 - Compensation for the Cancellation by the Principal or Waiver by the Agent
In case of explicit or implicit contract to continue with the agency for any period of time, then the principal shall compensate
the agent or the agent shall compensate the principal, as the case may be, for the cancellation or waiver of the agency
prematurely and without a sufficient reason.
Article 178 - Notice of Cancellation or Waiver

An appropriate notice shall be given of the cancellation or waiver and the principal or agent, as the case may be, shall not be
liable for the compensation of the damage incurred by the other.
Article 179 - The Cancellation and Waiver shall be Explicit or Implicit

The cancellation and waiver shall be either explicit or implicit, as resulted from the actions of the principal or agent.
Article 180 - When the Authorization of the Agent is terminated for the Agent and the Third Parties
The termination of authorization shall not be valid towards the agent or third parties before receiving a notice of the same.
Article 181 - Obligations of the Agent upon End of the Agency by the Death or Dementia of the Principal
If the agency is ended by the death or dementia of the principal, the agent shall take, on behalf of the representatives of his
former principal, all reasonable steps to protect and preserve the interests entrusted to him.
Article 182 - Termination of the Sub-agent’s Authorization

Without prejudice to the provisions stated herein concerning the termination of the agent's authorization, the termination of
the said authorization shall result into the termination of the authorization of all sub-agents appointed by him.
Obligations of the Agent towards the Principal
Article 183 - Obligations of the Agent in running the Principal’s Works

The agent shall dispose of the affairs of the principal according to the instructions issued by the principal or, upon absence of
such instructions, according to the prevailing practice in the same type of work at the same place of the agent. If the latter acts
otherwise, he shall bear every loss incurred by his principal because of the said actions. In case of profit, he shall pay such
profit to the principal.
Article 184 - Experience and Effort required from the Agent

The agent shall, while running the agency affairs, use a degree of skill that is usually used by the persons working in a similar
work, unless the principal is aware that such skill is not available. The agent shall also work with reasonable effort and use his
skill to compensate his principal for the direct results of his neglect, lack of skill or misconduct. However, he shall not be liable
for the damage or loss not having a direct relation or a close reason to that neglect, lack of skill or misconduct.
Article 185 - Accounts of the Agent

The agent shall submit correct accounts to the principal upon his request.
Article 186 - Obligations of the Agent to refer to the Principal

The agent shall, when facing any difficulties, make every reasonable effort to contact his principal and seek to be guided by his
instructions.
Article 187 - Rights of the Principal when the Agent runs the Agency Affairs for his Own Account without
the Consent of the Principal
If the agent runs the agency affairs for his own account, without obtaining the consent of his principal in advance and
informing him of all the fundamental conditions he is aware of concerning the subject, then the principal may reject the
transaction.
Article 188 - Right of the Principal in the Benefit obtained by the Agent who runs the Agency Affairs for
his Own Account
If the agent runs the agency affairs for his own account, without the knowledge of his principal, instead of running them for
his principal's account, the principal may claim from the agent any benefit that may be obtained from such transaction.
Article 189 - Right of the Agent in detaining the Amounts collected for the Principal’s Account:
1-The agent may deduct, from the amounts collected concerning the agency affairs for the account of the principal, all the
amounts he is entitled to obtain for any advance payments made or any expenses incurred properly while running these
affairs, as well as any remuneration for his work as agent.
Obligations of the Agent to pay the Collected Amounts to the Principal:
2-Taking these deductions into consideration, the agent shall pay to his principal all the amounts collected for his account.
Article 190 - When the Agent is entitled to receive Remuneration

The agent shall not be entitled to receive remuneration for any work unless after completion of such work. However, the agent
may keep the money he collected by the sale of goods, even if the goods placed at his disposal for sale is not sold entirely and
even if the sale was not actually completed, unless there is a special agreement otherwise.
Article 191 - The Agent not entitled to receive Remuneration for a Work in which he acted wrongfully
The agent who acts wrongfully in the affairs of the agency shall not be entitled to receive remuneration for this part of work in
which he acted wrongfully.
Article 192 - Right of the Agent to seize the Funds of the Principal
The agent may seize the goods, papers and other properties belonging to the principal, movable and immovable, until
payment of all the amounts due to him as commission, expenses or services or until settlement of the account in their regard,
unless it was agreed upon otherwise.
Obligations of the Principal towards the Agent
Article 193 - Compensation of the Agent for the Outcome of Lawful Acts
The principal shall compensate the agent for the outcome of all the lawful acts carried out by the agent during the exercise of
the powers granted to him.
Article 194 - Compensation of the Agent for the Outcome of the Ongoing Acts in Good Faith
When a person employs another person to carry out a work, the employer shall compensate the agent for the outcome of such
work, even if it causes damage to third parties, in case the agent carried out the work in good faith.
Article 195 - Non-liability of the Employer for any Criminal Act committed by the Agent
When a person employs another person to carry out a work considered a crime, the employer shall not be considered liable for
compensation of the agent for the outcome of such work, whether on the basis of an explicit or implicit promise.
Article 196 - Compensation of the Agent for the Damage occurring due to the Negligence of the Principal
The principal shall compensate his agent for the damage occurring to such agent as a result of the negligence or lack of
experience of the principal.
Impact of the Agency on the Contracts with Third Parties
Article 197 - Implementation of the Agent Contract and the Results thereof
The contracts concluded by the agent and the obligations arising from his actions shall be enforceable and shall have the same
legal effects as if concluded by the principal himself.
Article 198 - Extent of Commitment of the Principal in case the Agent exceeds his Powers
If the agent exceeds the authorization granted to him and the part falling within his powers, of the acts carried out by him,
may be separated from the part falling outside his powers, the principal shall not be bound, between him and the agent, except
by the powers of the agent.
Article 199 - Non-liability of the Principal when the Excess cannot be separated
If the agent exceeds the authorization granted to him and the part in which the excess was made cannot be separated from the
part falling within his powers, then the principal shall not be obliged to accept the transaction.
Article 200 - Effect of the Agent’s Notice

Any notice given to the agent and any knowledge obtained shall have, between the principal and third parties, the same legal
effects as if the notice was given to or the knowledge obtained by the principal, provided that the notice was given or the
knowledge obtained during the works conducted by the principal.
Article 201 - The Agent shall not personally implement the Contracts on behalf of the Principal and shall
not be bound by the same:
1-The agent may not personally force the implementation of the contracts concluded on behalf of his principal and shall not
be bound by them in person, unless it is agreed upon otherwise.
Assumption of an Agreement otherwise:
2-Such contracts may exist in the following cases:
(a) If the contract is concluded by a sale or purchase agent of goods for a merchant residing abroad.
(b) If the agent did not reveal the name of his principal.
(c) If the prosecution of the principal is not possible, even if his name was revealed.
Article 202 - Rights of the Parties in the Contract concluded by an Agent who did not reveal his Capacity
1-If an agent concludes a contract with a person who is not aware, or who has no reason to believe that he is an agent, the
principal may claim the implementation of the contract and the other contracting party shall have, towards the principal, the
same rights he has towards the agent as if the agent was principal.
2-If the principal reveals himself before completion of the contract, the other contracting party may refuse to complete the
contract if he was able to prove that he would not have concluded the contract if he was aware of the identity of the principal
or if he was aware that the agent was not a principal.
Article 203 - Fulfilment of the Contract when the Agent is assumed to be Principal
If a person concludes a contract with another, without being aware, or without having a reasonable cause to believe that the
other person is an agent, the principal who claims the implementation of the contract shall not obtain such implementation
unless according to the rights and obligations between the agent and the other contracting party.
Article 204 - Rights of the Person who deals with the Agent who is Personally Liable
In the cases where the agent is personally liable towards the person he is dealing with, the agent himself, his principal or both
shall be considered liable.
Article 205 - Effect of Suggestion to the Agent or Principal to act while believing that the Principal or the
Agent is Liable alone
If the person who concludes a contract with an agent suggests, to that agent, that the principal is liable alone or suggests to
the principal to act while believing that the agent is liable alone, he shall not claim such agent or principal, according to the
case.
Article 206 - Liability of the Claimed Agent

The person who claims, without being honest, that he is the authorized agent of another person and thus pushes a third party
to deal with him as the agent, shall be liable for compensation for any loss or damage incurred as a result of such deal, in case
his claimed principal did not permit his actions.
Article 207 - The Person who concludes a False Contract in his Capacity as Agent shall not implement such
Contract
The person who concludes a contract in his capacity as agent shall not have the right to claim the implementation of the
contract if in fact he acted for his own account and not as agent.
Article 208 - Liability of the Principal who insinuates that the Unauthorized Acts of the Agent were
authorized
If the agent commits acts, without authorization, or incurs obligations to third parties on behalf of his principal, the latter
shall then be liable for such acts or obligations if, by his words or actions, he implied to the said persons that these acts and
obligations fall within the powers of the agent.
Article 209 - Effect of Sedition or Deception by the Agent on the Agreement

The sedition or deception exercised by agents, while working for their principal, shall have, in the agreements concluded by
these, the same effect as if concluded by the principals. However, the sedition or deception exercised by agents in matters
outside their powers shall not affect their principals.
Issued on 22 Rabi' Al Thani 1391 H
Corresponding to 29 June 1971
Rashid bin Saeed Al Maktoum
Ruler of the Emirate of Dubai

Dubai Law No.1 of 1971 Contracts Law

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Dubai Law No.1 of 1971 Contracts Law

Uploaded by

Copyright:

Available Formats

Lexis Middle East

Dubai Law No. 1/1971

Issued on 29 Jun 1971 (corresponding to 22 Rabi Al-Thani 1391 H)

Document link: https://www.lexismiddleeast.com/law/Dubai/Law_1_1971

Title 1 - Notification, Acceptance and Cancellation of the Offer

Article 4 - Notification, Acceptance and Cancellation of the Offer

Article 5 - Notification of the Agreement Clauses

Article 6 - When the Notification is considered Complete

Article 7 - Cancellation of the Offer and Consent

Article 8 - Method of Cancellation

Article 9 - The Consent is Absolute

Article 10 - Consent of the Implementation of Conditions or Receipt of Benefit

Article 11 - Explicit and Implicit Promises

Title 2 - Contracts, False Contracts and Void Agreements

Article 12 - Agreements forming Contracts

Article 13 - Capacities of the Contracting Parties

Article 14 - Significance a Sound Mind for the Purpose of the Contract

Article 15 - Definition of Contentment

Article 16 - Definition of Contentment and Choice

Article 17 - Definition of Coercion

Article 19 - Definition of Illegal Influence

Article 20 - Definition of Deception

Article 21 - Definition of Sedition

Article 22 - Agreements concluded without Contentment and Choice subject to Cancellation:

Article 23 - Right to Cancel the Contract concluded under Illegal Influence

Article 25 - Effect of the Error as per the Law

Article 27 - Legal and Illegal Benefits and Purposes

Article 30 - The Agreement to prevent a Marriage is Void

Article 31 - The Agreement to prevent Trading is Void

Article 32 - Invalidity of the Agreement to prevent Judicial Proceedings

Article 33 - Mystery shall invalidate Agreements:

Article 34 - The Agreement by Way of Bet shall be Void

Title 3 - Outstanding Contracts

Article 35 - Definition of Outstanding Contract

Article 36 - Implementation of Outstanding Contracts related to the Occurrence of an Event

Article 37 - Implementation of Outstanding Contracts related to the Non-occurrence of an Event

Article 40 - Agreements depending on Impossible Events are Void

Title 4 - Implementation of Contracts

Article 41 - Obligations of the Contracts’ Parties

Article 42 - Effect of Refusal to accept the Offer of Implementation

Article 44 - The Person to implement the Contract

Article 45 - Impact of Acceptance of Implementation by a Third Person

Article 46 - Transfer of Common Obligations

Article 47 - Assignment of the Promisor to participate in the Implementation

Article 48 - Impact of the Exemption of one of the Joint Promisors

Article 49 - Conversion of the Common Rights

Time and Place of Implementation

Implementation of Reciprocal Promises

Article 56 - Order of Implementation of Reciprocal Promises

Article 60 - Agreement to perform an Impossible Act

Contracting to perform an Act that became impossible or illegal later on:

Contracting to perform an Act that became impossible or illegal later on:

Article 62 - Alternative Promise in case one of its Parts is Illegal

Article 63 - Purpose of Payment – when the Settled Debt is specified

Contracts not to be implemented

Article 64 - Impact of Replacement, Termination and Amendment of the Contract

Article 66 - Impact of Termination of the False Contract

Implementation of the Contracts in Kind - a-The Contracts implemented in Kind

Article 70 - Cases where Implementation in Kind is Obligatory

Article 73 - Implementation in Kind of a Separate Part of the Contract

Article 76 - Validity of the Judgment of Compensation in Certain Cases

b-The Contracts that cannot be implemented in Kind

Article 78 - The Contracts not implemented in Kind