Sale Contract in Saudi Arabia: Price, Delivery and Hidden Defects

The owner of a printing shop in Riyadh bought a used printing machine for SAR 140,000. He paid 100,000 and agreed to pay the rest “after it starts working”. The machine arrived without its feeder unit, and two weeks later ink began to leak. The seller says the feeder was not included in the price, that the leak comes from misuse, and demands the remaining 40,000. Three questions that a two-page contract could have settled before the transfer.

What must a sale contract in Saudi Arabia specify?

Article 307 of the Civil Transactions Law defines a sale as a contract by which the seller transfers ownership of the item to the buyer in return for a cash price. The first thing to write is the item itself: its description, quantity, condition, accessories, and any specification that was a reason for the purchase. In the printing shop example, one line stating “the machine with the feeder unit and the operating manual” would have prevented half the dispute.

Check that the seller owns what he is selling. If someone sells, without permission, a specific item he does not own, the sale has no effect against the owner unless the owner approves it, and the buyer may ask for it to be annulled (Article 359). If the item is a car, a property or an asset subject to registration, the sale paper alone does not transfer ownership without the legal procedures that apply to it.

When must the price be paid?

As a rule, the price is due immediately, unless the parties agree to defer it or pay in instalments by a known date. If it is deferred or in instalments, the period starts from the date of the contract unless agreed otherwise (Article 317). So a phrase like “the rest after it starts working”, without saying what “working” means or when, opens the door to disputes.

The seller may hold the item until he receives the price due, even if the buyer offers a mortgage or a guarantee. But if he accepted deferred payment, he loses this right and must deliver (Article 346). If the sale includes installation or training, separate the price of the goods from the fee for the service in the contract where possible, so the account is clear if one part fails and the other does not.

When is the item considered delivered?

Delivery happens by placing the item in the buyer's possession, or by the seller clearing the way for the buyer to take possession and use it without obstacle, after informing him, in a manner suited to the nature of the item (Article 324). Sending an invoice or a message saying “the goods are ready” is not enough if there is an obstacle to collecting them.

Specify the place of delivery, who signs for the buyer, and what the delivery record proves. A record saying “we received three boxes” does not mean the buyer inspected and accepted what was inside. If there is a test run, write its result and any remaining comments in the same record.

A defect appeared in the item. What should I do?

The seller guarantees that the item, at delivery, is free of any defect that reduces its value or usefulness for its intended purpose, “even if he did not know of it”. The buyer may choose between terminating the sale, or keeping the item and claiming the price difference, with compensation where justified. The seller may avoid this by supplying a similar item in sound condition (Article 338).

But the seller does not guarantee the defect in certain cases, including (Article 339):

• The buyer knew of the defect at the time of sale, or could have discovered it by the inspection of an ordinary person, unless the seller guaranteed the item was free of that specific defect or deliberately hid it.
• The defect is one that custom usually tolerates.
• The defect appeared after delivery, unless it comes from a cause that existed before.
• The sale was at an auction held by a judicial or administrative authority.

The buyer must inspect the item as soon as he can, in the usual way, and inform the seller of the defect within a reasonable period. If the defect is hidden, he must inform the seller as soon as it appears; otherwise he is treated as having accepted it (Article 340). A claim under the defect warranty is not heard after one hundred and eighty days from delivery, unless the seller committed to a longer warranty, and the seller cannot rely on this period if it is proven that he fraudulently hid the defect (Article 344).

The printing shop owner received the machine on 10 January. The leak appeared two weeks later, and on the same day he sent the seller a written message describing the defect, with photos. Then the promises to repair began: “The technician will come next week.”

Do not let these promises use up the period. Count 180 days from delivery, which is around 9 July, and act before then if the defect is not fixed, or get a written commitment from the seller to a longer warranty.

The parties may agree to exempt the seller from the defect warranty, limit it or extend it, unless he deliberately hid the defect (Article 343). So a “sold as is” clause in a used-item sale has a real effect, but it does not protect a seller who hid a defect he knew about. If a covered defect appears, the buyer may withhold the price until the seller provides suitable security, and the seller may ask the court to order the buyer to deposit the price instead (Article 349).

When can I terminate the sale?

Besides the defect option, the general rule remains: if one party does not perform his obligation, the other may, after formal notice, ask for performance or termination with compensation where justified, and the court may refuse termination if the unperformed part is of little importance (Article 107).

Watch for what makes you lose the right to terminate for a defect. If you accepted the defect expressly or implicitly, you lose both termination and the price difference. If you sold the item, or it was destroyed or damaged by your act or after you received it, you lose termination but keep the price difference (Article 341). If you bought several items in one deal and the defect appears in some of them, and splitting them causes no harm, termination applies only to the defective part, unless it is clear you would not have accepted the contract without it (Article 342).

This is general information based on the official Arabic texts of Saudi laws, which prevail over any translation. It is not legal advice for your specific case.

Practical solutions for both sides

If you are the buyer:

• List the item and its accessories in the contract or a signed annex; do not rely only on photos and chats.
• Inspect the item as soon as you receive it, and send any defect to the seller in writing with a clear date.
• Do not let 180 days from delivery pass without filing a defect claim if it has not been fixed.
• Do not repair the defect or change the item's condition before documenting it with photos or a technical report.

If you are the seller:

• Describe the condition of a used item accurately, and list known defects expressly in the contract.
• If you want to sell “as is”, write it as a clear clause, and remember it does not protect deliberate concealment.
• Record delivery and the test run in a report signed by the buyer.
• If you accept deferred payment of the balance, get a written guarantee, because accepting deferral removes your right to hold the item.

If you have a sale contract before signing, a defect appeared in something you received, or the buyer is late with the balance, send the contract, the records and the correspondence on WhatsApp and we will identify the best path with you.