Named and Unnamed Contracts Under Saudi Law: Why Codification Has Made Drafting More Important

Does Saudi law recognise unnamed contracts?

Yes. Article 30 of the Civil Transactions Law makes clear that the general contractual provisions apply to both named and unnamed contracts, without prejudice to statutory rules governing contracts of a special nature. An unnamed contract is therefore not an unregulated contract.

Why do named contracts sometimes feel safer?

A named contract may sit within a detailed statutory framework that already addresses matters the parties did not fully draft. Sale and lease are examples of contract types for which the Civil Transactions Law contains a developed legal architecture. Statutory rules may therefore assist where the document is incomplete.

Why are modern mixed contracts different?

A document called a Cooperation Agreement may in substance contain referral, exclusivity, consultancy, distribution, non-equity joint venture or business-development elements. The title does not answer when a commission is earned, who may bind whom, whether exclusivity applies, what happens after termination or how open opportunities are treated.

The risk is not that Saudi law has no answer. The risk is that the eventual answer may depend on general principles, interpretation, custom and the nature of the transaction because the parties never recorded the commercial mechanics clearly.

How can gaps be filled?

The Civil Transactions Law permits unresolved non-essential matters to be determined by reference to statutory rules, the nature of the transaction and custom. It also requires performance in good faith and recognises that contractual obligations may include consequences arising from law, custom and the nature of the contract. Interpretation may look beyond literal wording to the parties’ common intention, surrounding circumstances, prior dealings and applicable custom.

What should be drafted carefully?

For unnamed or mixed contracts, the commercial mechanics deserve particular attention: scope, authority, payment trigger, reporting, exclusivity, audit rights, non-circumvention, termination, post-termination rights, liability, dispute resolution and survival provisions.

A referral agreement that does not define the referral, qualifying transaction, payment trigger and post-termination entitlement may be only a few pages long but still carry significant dispute risk.

Practical conclusion

Codification provides a stronger legal framework. It does not write the commercial bargain for the parties. The drafting test is not whether the agreement has the correct title, but whether it explains how the transaction works when everything does not go according to plan.