1. THE CIVIL CODE Translated from Arabic into English by James Whelan MA (Cantab), Cert. Ed. (London) Resident Manager, Clifford Chance, Sharjah Marjorie J Hall BA, PhD INTRODUCTORY CHAPTER GENERAL PROVISIONS PART 1 - Provisions relating to the application and effect of the law in time and place Section 1 - The Law and its application 1 Article 1. (As amended by Federal Law No. 1 of 1987). "The attached Law shall operate in respect of civil transactions for the UAE. However, commercial transactions shall continue to be governed by the existing laws and regulations relating thereto until the Federal Commercial Law is enacted". Article 2. The rules and principles of Islamic jurisprudence (fiqh) shall be relied upon in the understanding, construction and interpretation of these provisions. Article 3. Public order shall be deemed to include matters relating to personal status such as marriage, inheritance, and lineage, and matters relating to sovereignty, freedom of trade, the circulation of wealth, rules of private ownership and the other rules and foundations upon which society is based, in such manner as not to conflict with the definitive provisions and fundamental principles of the Islamic Shari'ah. Section 2 - The application of the Law with regard to time
2. 2 Article 4. (1) It shall not be permissible to repeal a legislative provision or to suspend the operation of it save by a subsequent legislative provision expressly so enacting or which includes a provision inconsistent with the earlier legislative provision or which rearranges the subject matter the rules for which are already laid down in such legislation. (2) If a legislative provision repeals an earlier legislative provision and the later legislative provision is itself repealed, such repeal shall not result in the earlier provision coming into force again unless it is expressly so laid down. Article 5. (1) Provisions relating to competence (legal capacity) shall apply to all persons to whom the conditions laid down in such provisions apply. (2) If a person is competent under old provisions and he loses that competence under new provisions, such loss shall not affect his earlier dispositions. Article 6. (1) The new provisions relating to limitation of time for claims shall apply as from the time they come into force to every period of limitation which has not expired. (2) Provided that the old provisions shall apply to questions relating to the commencement of the running of time, and the suspension and interruption thereof, in relation to the period prior to the new provisions coming into force. Article 7. (1) If the new provision lays down a limitation period shorter than that laid down in the old provision, the new period shall apply from the time the new provision comes into effect notwithstanding that the old period has already commenced. (2) If, however, the remainder of the period provided for under the old provision is shorter than the period provided for under the new provision, the period of limitation shall expire upon the expiry of that remainder. Article 8.
3. The provisions relating to evidential proof current at the time such proof was prepared or should have been prepared or shall apply thereto. 3 Article 9. Times shall be calculated according to the solar (Gregorian) calendar unless the law provides otherwise. Section 3 - The application of the Law with regard to place Article 10. The law of the State of the United Arab Emirates shall be the authoritative source in determining relationships when the nature of such relationships requires to be determined in a suit in which there is a conflict of laws as to the law to be applied between the parties. Article 11. (1) The law of the state of which a person has the nationality shall apply to the civil status and competence of such person but nevertheless in financial dealings transacted in the State of the United Arab Emirates the results of which materialise therein, if one of the parties is an alien of defective capacity and the lack of capacity is attributable to a hidden cause which the other party could not easily discover, such cause shall have no effect on his capacity. (2) With regard to the legal regulation of foreign juridical persons including companies, associations, establishments and otherwise, the law of the state in which such bodies have their actual main administrative centre shall apply thereto, and if such a body carries on an activity in the State of the United Arab Emirates, the national (sc.UAE) law shall apply. Article 12. (1) The substantive conditions for the validity of a marriage shall be governed by the law of each of the spouses at the time the marriage was contracted. (2) With regard to the form, a marriage between aliens or between a national and an alien shall be deemed to be valid if it is contracted in accordance with the
4. rules of the country in which it took place, or if the rules laid down by the law of each of the spouses have been observed. 4 Article 13. (1) The law of the state of which the husband is a national at the time the marriage is contracted shall apply to the effects on personal status, and the effects with regard to property, resulting from the contracting of the marriage. (2) Talaq (unilateral non-judicial declaration of divorce by a husband) shall be governed by the laws of the state of which the husband is a national at the time of the talaq, and talaq and separation shall be governed by the law of the state of which the husband is a national at the time the proceedings are brought. Article 14. In the circumstances provided for in the two foregoing Articles, if one of the spouses is a national at the time the marriage is contracted, the law of the United Arab Emirates alone shall apply, save in respect of the legal capacity to marry. Article 15. Obligations to support relatives shall be governed by the law of the person having such obligation. Article 16. Substantive matters relating to guardianship, trusteeship and maintenance and other systems laid down for the protection of persons having no competence or of defective competence or of absent persons shall be governed by the law of the person requiring to be protected. Article 17. (1) Inheritance shall be governed by the law of the deceased at the time of his death. (2) Property rights located in the territory of the State which belong to an alien having no heir shall become vested in the State.
5. (3) The substantive provisions governing testamentary dispositions and other dispositions taking effect after death shall be governed by the law of the state of which the person making such dispositions is a national at the time of his death. (4) The form of wills and other dispositions taking effect after death shall be governed by the law of the state of which the person making such disposition is a national at the time the dispositions is made, or the la of the state in which the disposition is made. (5) The law of the United Arab Emirates shall apply to wills made by aliens disposing of their real property located in the State. 5 Article 18. (1) Possession, ownership and over property shall be governed by the lex situs in the case at real property, and movable property shall be subject to the law of the place in which such property is at the time when the cause resulting in the acquisition or loss of possession, ownership or other rights over the property arose. (2) The law of the state in which property is located shall determine whether such property is real or movable. Article 19. (1) The form and the substance of contractual obligations shall be governed by the law of the state in which the contracting parties are both resident if they are resident in the same state, but if they are resident in different states the law of the state in which the contract was concluded shall apply unless they agree, or it is apparent from the circumstances that the intention was, that another law should apply. (2) The lex situs of the place in which real property is situated shall apply to contract made over such property. Article 20. (1) Non-contractual obligations shall be governed by the law of the state in which the event giving rise to the obligation took place. (2) The provisions of the foregoing paragraph shall not apply to obligations arising out of an unlawful act in connection with events taking place abroad
6. which are lawful in the State of the United Arab Emirates notwithstanding that they are considered to be unlawful in the country in which they took place. 6 Article 21. The rules relating to jurisdiction, and all procedural matters, shall be governed by the law of the state in which the action is brought or in which the procedures are carried out. Article 22. The provisions of the foregoing Articles shall not apply in cases where there is a contrary provision in a special law or in an international convention in force in the State. Article 23. The principles of private international law shall apply in the absence of a relevant provision in the foregoing Articles governing the conflict of laws. Article 24. The law of the State of the United Arab Emirates shall apply in the case of persons of unknown nationality, or persons who are shown to have more than one nationality at the same time. Provided that in the case of persons shown to have at the same time the nationality of the United Arab Emirates and of another State, United Arab Emirates law must be applied. Article 25. If it appears from the provisions contained in the foregoing Articles that the law to be applied is the law of a particular state which has more than one legal system, the domestic law of that state shall determine which legal system is to be applied. In the absence of a specific provision, the prevailing system of law, or the law of the place of residence, as the case may be, shall apply. Article 26.
7. (1) If it is established that a foreign law is to be applied, only the domestic provisions thereof shall be applied, to the exclusion of those provisions relating to private international law. (2) Provided that the law of the United Arab Emirates shall apply if international law relating to applicable law provides that United Arab Emirates law shall apply. 7 Article 27. It shall not be permissible to apply the provisions of a law specified by the preceding Articles if such provisions are contrary to Islamic Shari'a, public order, or morals in the State of the United Arab Emirates. Article 28. The law of the United Arab Emirates shall be applied if it is impossible to prove the existence of an applicable law or to determine its effect. Part 2 - Certain jurisprudential maxims and rules of interpretation Article 29. Ignorance of the law is no excuse. Article 30. Exceptions may not be used by analogy, nor may their enterpretations be extended. Article 31. A mandatory provision (of law) shall take precedence over a contractual stipulation. Article 32. That without which an obligation cannot be performed is itself an obligation.
8. 8 Article 33. A rule shall depend on its cause for its existence, and shall cease to be if the cause ceases to exist. Article 34. Fungibles shall not cease to exist. [Translator's note: The principle is that where goods are defined by type, quality, etc., as opposed to specifically ascertained items or parcels of goods, then the loss or destruction of any specifically ascertained goods shall not affect a contract made e.g. for the sale of replaceable goods of that description. See Article 99 for a definition of fungibles.) Article 35. Certainty shall not be removed by a doubt. Article 36. There is a presumption of continuance. Article 37. There is a presumption that an obligation has been discharged. Article 38. There is a presumption against the existence of supervening qualities (i.e. things will be presumed to be normal and usual unless the contrary is proved). Article 39. A thing proved to have existed in the past shall be deemed still to exist in the absence of evidence to the contrary.
9. 9 Article 40. There is a presumption that an event (known to have occurred) has occurred in the immediate past. Article 41. No analogies may be drawn from what is shown to be contrary to analogy (i.e. outside the normal course of events). Article 42. (1) No harm shall be done, nor harm done in retun. (2) Harm shall be made good. (3) Harm may not be made good by causing similar harm (in return). Article 43. Necessity excuses the doing of a prohibited act. Article 44. The averting of evil is better than the doing of good. Article 45. Compelling need shall not annul the rights of others. Article 46. (1) Custom, whether general or particular, is binding. (2) Regard shall be had to custom if it is of long duration and continuing, or is prevalent. (3) Actual facts may be established by reference to custom.
10. 10 Article 47. Customary usage amounts to evidence (of rights and obligations) and shall be abided by. Article 48. What custom (or common knowledge) regards as impossible (absurd) shall be treated as what is in fact impossible (absurd). Article 49. Greater (evidential) weight shall be given to the prevailing and the commonplace than to the rare (and exceptional). Article 50. That which is established by custom is equivalent to a stipulated condition. Article 51. An obligation under custom has the same force as an expressly stipulated condition. Article 52. Where prohibition conflicts with an obligation, the prohibition shall take precedence. Article 53. That which is ancillary attaches (to the principal subject matter) and need not be separately specified. Article 54. If a matter ceases to exist, that which is incidental to it shall also cease to exist.
11. 11 Article 55. That which has lapsed (been waived) or ceased to exist shall not arise again. Article 56. A subordinate matter (right or obligation) shall be annulled if the principal matter (right or obligation) is annulled. Article 57. If (and only if) the original thing is lost, an obligation may be performed by use of a substitute. Article 58. A disposition affecting the public must, to be valid, be in the public interest. Article 59. An answer refers back to the question. Article 60. No regard shall be had to mere possibilities. Article 61. No regard shall be had to an (act performed in consequence of a) belief which is shown to be wrong. Article 62. If a matter is established by (proper lawful means of ) proof, (the effect is tantamount to the judge being) as an eye-witness.
12. 12 Article 63. A person shall be bound by his admissions. Article 64. A subsidiary matter may be proved without the principal matter being proved. Article 65. A matter which is (merely) outwardly apparent suffices as a defence (to maintain the status quo), but not to establish a (positive claim of) right. Article 66. The yield (esp. of animals or land) belongs to (him who undertakes) the burden (of making the payment for the upkeep of the thing producing the yield). Article 67. (He who has) the advantage (of e.g. an arrangement must bear) the burden (e.g. of contributing his share). Article 68. No person may validly make a disposition over the property of another. Article 69. He who prematurely obtains a thing shall be penalised by being deprived of it. Article 70. No person may resile from what he has (conclusively) performed.
13. Part 3 - Persons Section 1 - Natural Persons 13 Article 71. (1) The personality (status of person) of a human being shall commence at the moment of being born alive. It shall terminate upon his death. (2) The law shall lay down the rights of a foetus in utero. Article 72. (1) The facts of birth and death shall be recorded (or: proved) by entries in registers kept for that purpose. (2) If there is no such evidence or if it should appear that the entries in the register are incorrect, it shall be permissible to prove the same by any legal means of proof. Article 73. Provisions relating to foundlings shall be laid down in a special law. Article 74. The provisions relating to lost and missing persons shall be laid down in a special law. Article 75. (1) The nationality of the State of the United Arab Emirates shall be regulated by law. (2) By the word "national", wherever it appears in the Civil Code, shall be meant any person having the nationality of the United Arab Emirates. By the word
14. "alien" shall be meant any person who does not have the nationality of the United Arab Emirates. 14 Article 76. (1) The family of a person shall consist of his spouse and relatives. (2) All persons coming from a common stock shall be deemed to be relatives. Article 77. (1) A direct relationship is the relationship of root and branch (direct lineage). (2) An indirect relationship is the link between persons of a common stock without direct lineage, whether or not within the degree of consanguinity precluding marriage. Article 78. In calculating the degree of direct relationship each upwards stage of generation to the source shall be regarded as one degree away from that source. In calculating the degree of indirect relationship degrees of ascent from the descendants to the common origin shall be be taken into account, and then downwards from him to the last generation, and each stage shall be counted as a degree with the exception of the common source. Article 79. One of the relations of the spouses shall be regarded as having the same degree of relationship to the other spouse. Article 80. (1) Each person shall have a name and a surname, and his surname shall attach to the names of his children. (2) A special law shall regulate the manner of acquisition and changing of names and surnames.
15. 15 Article 81. (1) A residence (mawtin) is the place in which a person normally resides. (2) A person may have more than one residence at the same time. (3) If a person does not have a place in which he normally resides, he shall be deemed to be without a residence. Article 82. The place in which a person carries on a trade, profession or occupation shall be deemed to be a residence in connection with the administration of the business relating to such trade, profession or occupation. Article 83. (1) The residence of a person of defective capacity or a person under a restriction, and missing or absent persons, shall be the residence of the person representing such persons at law. (2) A person of defective capacity who is authorised to trade shall have a special residence in relation to the work and dealings which the law regards him as having capacity to transact. Article 84. (1) It shall be permissible to adopt an elective place of residence to carry out a specific legal operation. (2) An elective place of residence may only be proved by writing. (3) An elective place of residence to carry out a legal operation shall be the residence in relation to all matters connected with that operation including compulsory enforcement proceedings unless it is expressly stated that that residence is restricted to certain matters exclusively. Article 85.
16. (1) Every person who has reached the age of majority in possession of his mental powers and who has not been placed under a restriction shall be of full capacity to exercise his rights laid down in this law and the laws deriving from it. (2) A person shall be of the age of majority upon reaching the age of twenty one lunar years. 16 Article 86. (1) No person who lacks discretion by reason of youth, imbecility or insanity shall be competent to exercise his civil rights. (2) Persons under the age of seven years shall be deemed not to have reached the age of discretion. Article 87, Any person who has reached the age of discretion but has not reached the age of majority and any person who has reached the age of majority but is an idiot or of unsound mind shall be of defective capacity under the law. Article 88. Persons of no capacity or of defective capacity as the case may be shall, with regard to guardianship, tutelage and custodianship, be subject to the relevant conditions in accordance with the rules laid down by law. Article 89. No person may divest himself of his personal liberty or of his capacity, or vary the concomitants thereof. Article 90. Any person who suffers an unlawful infringement of any of the rights appurtenant to him as a person shall have the right to require that such infringement cease, together with compensation for any damage suffered by him.
17. 17 Article 91. Any person whose use of his name or surname or both is disputed by another without justification or whose name or surname or both are wrongfully assumed by another shall have the right to require that such infringement do cease and to claim compensation for any harm suffered. Section 2 - Juridical Persons Article 92. Juridical persons shall consist of the following:- (a) the State, the (individual ) Emirates, the Municipalities and other administrative units, under the conditions laid down for them by law; (b) public departments, authorities and bodies and public institutions and establishments upon which a judicial personality is conferred by law; (c) Islamic bodies recognised by the State as having a juridical personality; (d) waqfs; (e) civil and trading companies, save as excluded by a special provision; (f) private societies and establishments established in accordance with the law; and (g) any grouping of persons or property having a juridical personality under the provisions of the law. Article 93.
18. (1) A juridical person shall enjoy all rights, save those pertaining (exclusively) to the capacity of being a natural person, within the limits laid down by-law. (2) Such persons shall have:- (a) 18 separate financial liability; (b) legal capacity within the limits laid down by the document establishing it, or as laid down by law; (c) the right to bring proceedings; and (d) a separate place of residence. The place of residence of a juridical person shall be deemed to be the place in which it has its administrative centre, and so far as concerns juridical persons whose head office is abroad but which carry on an activity in the State, their administrative centre, with regard to the law of the State, shall be deemed to be the place at which the local administration is situated. (3) Such persons must have a (natural) person to express their intentions. Article 94. Juridical persons shall be subject to the special laws pertaining to them. Part 4 - Things and property Article 95. Property ("mal") is any thing or right having a material value in dealing. [Tr: The word translated as "thing" is "'ain". The word includes both land and chattels, and all that is broadly indentifiable as a “thing", and embodies in the widest sense all that would be regarded as property (excluding choses in action or rights) under English law. In this translation, the word "property" is used to translate "mal", wherever the latter word occurs in the text.)
19. 19 Article 96. Property may be "mutaqawwim" or "non-mutaqawwim”. Mutaqawwim property is that which it is permissible for a Muslim lawfully to enjoy, and non-mutaqawwim property is that which it is not permissible for a Muslim lawfully to enjoy. Article 97. Any thing which can be possessed whether physically or constructively, or which may be lawfully enjoyed, and which does not by its nature or by operation of law fall outside the scope of dealing (transactions), shall be a proper subject of property rights. Article 98. Things which are by their nature outside the scope of dealing are those which no person may possess exclusively, and things which are outside the scope of dealing by operation of law are those which the law does not permit to be the subject of property rights. Article 99. (1) Fungible things are those whose units or parts are of a replaceable nature, or nearly so, in such a way that by custom other things can take their place without any appreciable distinction, and which are calculated in dealing by number, measurement, capacity or weight. (2) Non-fungibles are those things whose individual instances differ appreciably as to description or value, or which are unique in circulation. Article 100. (1) Consumable things are those the nature of which cannot be enjoyed save by consuming or spending them. (2) Usable things (durables) are those which can only be enjoyed by repeated use, they retaining their specific identity.
20. 20 Article 101. Any thing of a permenently fixed nature and which cannot be removed without damaging or altering its surroundings shall be regarded as real property. Everything else shall be regarded as movable property. Article 102. Real property by allocation (i.e. intended to serve as part of the real property) is movable property placed by an owner in real property of his, with the intent of its being used or exploited, even though not (permanently) fixed to the real property. Article 103. (1) All real property or movables owned by the State or public juridical persons, allocated in fact or in law for the public benefit, shall be deemed to be public property. (2) In no circumstances may such property be disposed of or distrained (attached) or pass into (private) ownership by effluxion of time. Part 5 - Rights Section 1 -The scope and exercise of rights Article 104. The doing of what is permitted by law negates liability, and no person who lawfully exercises his rights shall be liable for any harm arising thereout. Article 105. (1) It is proper that a private harm be borne to avert a public harm. (2) It is proper that a greater harm be removed by (inflicting) a lesser harm. Section 2 - The abuse of rights
21. 21 Article 106. (1) A person shall be held liable for an unlawful exercise of his rights. (2) The exercise of a right shall be unlawful: (a) if there is an intentional infringement (of another's rights); (b) if the interests which such exercise of right is designed to bring about are contrary to the rules of the Islamic Shari'ah, the law, public order, or morals; (c) if the interests desired are disproportionate to the harm that will be suffered by others; or (d) if it exceeds the bounds of usage and custom. Section 3 - Types of rights Article 107. A right may be personal, property or moral (choses in action). Article 108. A personal right is a legal relationship between an obligee and an obligor whereby the obligee has a claim against his obligor for the transfer of a property right, or to perform or refrain from performing an act. Article 109. (1) A property right is a direct power over a particular thing, given by law to a particular person. (2) A property right may be original or consequential.
22. 22 Article 110. (1) Original property rights are rights of ownership, disposal, usufruct, use, residence or shared occupation, rights of easement, waqfs, and rights which the law provides shall be deemed to be such. (2) Consequential property rights are mortgages for security, possessory mortgages, and liens. Article 111. (1) Moral rights are those which subsist over a non-material thing. (2) Rights of authors, inventors, artists, and rights in trade marks and other moral rights, shall be governed by the provisions of special laws. Section 4 - Proof of rights (1) Categories of evidence Article 112. Evidence to prove a right shall take the following forms:- (a) writing; (b) testimony; (c) circumstancial evidence; (d) eye-witness and expert evidence; (e) admissions; and (f)
23. 23 evidence on oath. (2) General rules of proof Article 113. The burden lies on an obligee to prove his right, and on an obligor to refute it. Article 114. Writing, testimony, and conclusive circumstancial evidence, as well as eye-witness and expert evidence, shall be valid as against other parties, but an admission shall be valid against the maker thereof alone. Article 115. Any testimony by which an advantage is gained by or a detriment averted from the witness shall be rejected. Article 116. The testimony of a deaf person, and his oath, shall be admitted by his accustomed signs, if he is unable to write. Article 117. The burden of proof is upon him who asserts, and the oath (of denial) must be taken by him who denies. Article 118. (Independent) evidence must be produced to establish what is contrary to the apparent facts, and the oath must be taken to show that the facts presumed to exist are true. Article 119.
24. The oath shall be accepted from one who takes it to discharge himself, but not to bind another. 24 Article 120. (1) The oath shall only be taken on the application of the opposing party. (2) It shall be permissible for the judge, of his own motion, to direct that a party take the oath in the following circumstances: (a) if he claims a right in an inheritance and establishes the same, he shall take the oath of istithaq to show that he has not received what is due to him from the deceased, and that he has not discharged him, that he has not assigned his rights to another, and that there is no pledge in existence as against such right; (b) in the event of proof of his entitlement to property, he shall take the oath to show that he has not sold such property or that he has not given it as a gift, or that it has not left his possession by any other means; (c) in the event that a sale is rescinded for a defect, he must swear that he did not consent to the defect either by word or deed; or (d) in the event of a judgment for a right of preemption, he must take the oath to show that his right of preemption has not lapsed for any reason. Article 121. The evidence of a translator registered in the special register shall be accepted, as laid down by law. Article 122. Conflicting evidence shall have no force, but (sic) it shall be of no effect in the judgment of a court if it is proved thereafter, and an interested party shall have a claim for indemnity against the witness.
25. (3) Application of the rules of proof 25 Article 123. In the rules and procedures for proof and the adducing of evidence of a right, the Courts shall apply the provisions laid down in special laws, to the extent that the same do not conflict with the foregoing provisions. BOOK ONE CHAPTER 1 - Personal obligations and rights Article 124. Personal obligations or rights shall arise out of dispositions, legal events and the law, and the sources of obligations shall be as follows:- 1. contracts; 2. unilateral acts; 3. acts causing harm (torts); 4. acts conferring a benefit; and 5. the law. Part I - Contracts Section I - General provisions Article 125. A contract is the coming together of an offer made by one of the contracting parties with the acceptance of the other, together with the agreement of then both in such a manner as to determine the effect thereof on the subject matter of the contract, and from which results an obligation upon each of them with regard to that which each is bound to do for the other. There may be a coincidence of more than two wills over the creation of the legal effect.
26. 26 Article 126. The following may be the subject matter of a contract: (a) property, whether moveable or immoveable, or corporeal or incorporeal; (b) benefits derived from property; (c) a particular act or service; and (d) any other thing which is not prohibited by a provision of the law and is not contrary to public order or morals. Article 127. A contract to do an unlawful thing is unlawful. Article 128. (1) The general provisions contained in this Part shall apply to nominate and innominate contracts. (2) With regard to rules applying to certain contracts only, the special provisions governing the same shall be laid down in this Law or in other laws. Section 2 - The elements, validity and effect of the contract, and options (1) The making of the contract Article 129. The necessary elements for the making of a contract are:- (a)
27. that the two parties to the contract should agree upon the essential elements; (b) the subject matter of the contract must be something which is possible and defined or capable of being defined and permissible to be dealt in; and (c) there must be a lawful purpose for the obligations arising out of the contract. 27 Article 130. A contract shall be made by virtue solely of the confluence of offer and acceptance, subject to the specific provisions laid down for the making of the contract by law. Article 131. Both offer and acceptance are any expression of intent used to create a contract. The first to be uttered is the offer, and the second the acceptance. Article 132. An expression of intent may be made orally or in writing, and may be expressed in the past or present tense or in the imperative if the present time is intended or by such means as are customary even by a person who is not dumb, or by an interchange of acts demonstrating the mutual consent or by adopting any other course in respect of which the circumstances leave no doubt that they demonstrate mutual consent. Article 133. The form of acceptance having the purport of a bare promise will give rise to a contract by way of binding promise if such is the intention of both parties. Article 134. (1) An offer of goods or services accompanied by an indication of the consideration shall be regarded as an offer.
28. (2) A publication or advertisement or a current price list or any other statement connected with offers or orders directed towards the public or individuals shall not in the event of doubt be treated as offers but only as an invitation to enter into a contract. 28 Article 135. (1) A person who remains silent shall not be deemed to have made a statement, but silence in the face of a circumstance in which a statement is called for shall be regarded as an acceptance. (2) In particular, silence shall be deemed to be an acceptance if there has been a prior dealing between the contracting parties and the offer is related to such dealing or if the offer will bring about a benefit to the person to whom it is made. Article 136. The contracting parties shall retain the option (to rescind) from the time the offer has been made until the time the majlis ends, and the offer shall be avoided if the offeror retracts it after making it and prior to its being accepted by the other side or if either of the contracting parties says or does anything to demonstrate that he is resiling from it, and no acceptance made after that shall be of any effect. [Tr: This section embodies the Shari'a concept of "khiyar al-majlis" - literally "the option of the session". This means that while the two parties are still in session, i.e. they have not gone their separate ways, and are still effectively together, each party retains the right to revoke any agreement made between them from the moment they came together]. Article 137. If the parties concern themselves during the majlis of the contract with extraneous matters, that shall be regarded as rejection of the matter in hand. Article 138. A repetition of the offer prior to acceptance annuls the first offer, and the last made offer shall be regarded as the valid one.
29. 29 Article 139. (1) If a time is fixed for the acceptance to be given, the offeror shall be bound to keep to his offer until such time expires. (2) The time may be inferred from the circumstances of the case or from the nature of the transaction. Article 140. (1) The acceptance must coincide with the offer. (2) If the acceptance exceeds the subject matter of the offer or places a restriction on it or varies it, that shall be regarded as a rejection containing a new offer. Article 141. (1) A contract may only be made upon the agreement of the two parties to the essential elements of the obligation, and the other lawful conditions which the parties regard as essential. (2) If the parties agree on the essential elements of the obligation and the remainder of the other lawful conditions which both parties regard as essential and they leave matters of detail to be agreed upon afterwards but they do not stipulate that the contract shall not be regarded as made in the event of absence of agreement upon such matters, the contract shall be deemed to have been made, and if a dispute arises as to the matters which have not been agreed upon, the judge shall adjudicate thereon in accordance with the nature of the transaction and the provisions of the law. Article 142. (1) A contract made between parties not in each other's presence shall be deemed to have been made at the time and place at which the offeror learns of the acceptance unless there is an agreement or a provision of the law to the contrary. (2) The offeror shall be deemed to have learned of the acceptance at the time and place at which such acceptance reaches him unless there is evidence to the contrary.
30. 30 Article 143. A contract made by telephone or by any similar means shall be regarded, so far as concerns place, as if it had been made between the contracting parties otherwise than in a single majlis with them both present it the time of the contract, and with regard to time, it shall be regarded as having been made between those present at the majlis. Article 144. A contract by way of auction shall only be made by the bid being accepted, and an offer shall lapse upon a higher offer being made even though the higher offer may be void, or upon the auction ending without a bid being accepted. Article 145. Acceptance in contracts of adhesion shall be by virtue of simple delivery on conditions similar to those made to all his customers by an offeror who does not accept any negotiation about those conditions. Article 146. (1) An agreement whereby both or one of the contracting parties undertake to make a specific contract in the future may only be made if all of the essential matters of the contract intended to be made and the period within which it is to be made are specified. (2) If the law requires that for a contract to be perfected a certain specified form should be used, that form must likewise be observed in the agreement containing the promise to make such contract. Article 147. If a person promises to make a contract and then renegues and is sued by the other person for the performance of the promise and the conditions necessary for the making of the contract, in particular the form, are satisfied, the judgment shall, when it becomes final, stand as the contract.
31. 31 Article 148. (1) Payment of earnest money shall be regarded as evidence that the contract has become final and irrevocable unless the agreement or custom are to the contrary. (2) If the two parties agree that the earnest money shall be forfeited in the event of reneguing, each of them shall have the right to renegue, and if the person who has paid the money renegues he shall lose it, and if the person receiving it renegues, he shall pay over double that amount. (2) Agency in contracting Article 149. A contract may be made by a principal and it may also be made by an agent unless the law stipulates otherwise. Article 150. (1) The agency in the contract may be by agreement or by law. (2) The deed of agency (power of attorney) issued by the principal shall specify the extent of the powers of the agent if the agency is by agreement, and the law shall specify such powers if the agency is by law. Article 151. If a person makes a contract on his own and for his own account then he shall be bound by the provisions of it to the exclusion of other persons. Article 152. (1) If a contract is made by means of an agency, it is the person of the agent and not the person of the principal to whom regard shall be had when considering defects in consent or the effect of knowledge of certain special circumstances or a presumption of knowledge thereof. (2) Nevertheless, if the deputy is an agent acting in accordance with specific instructions given to him by his principal, the principal may not rely on the
32. ignorance of the agent of circumtances of which the principal knew or which he is presumed to have known. 32 Article 153. If the agent makes a contract within the limits of his authority in the name of the principal, the provisions of that contract and the rights (obligations) arising therefrom shall devolve upon the principal. Article 154. If the party making a contract does not state at the time the contract is made that he is contracting in his capacity as agent, the effect of the contract will not attach to the principal either as obligee or obligor unless it is conclusively presumed that the person with whom the agent contracted knew that he was an agent or if it was a matter of indifference for him whether he was contracting with the principal or the agent. Article 155. If the agent and the person contracting with him are both ignorant at the time the contract is made of the agency having been terminated, the effect of the contract made by the agent will attach to the principal or his successors. Article 156. It shall not be permissible for a person to contract with himself in the name of the person for whom he is an agent whether the contract is for his own account or for the account of another party without authorisation from the principal, but provided that it is permissible for the principal in that event to approve the contract, having regard in all of the above to any contrary provisions of the law or commercial practice. (3) The capacity to contract Article 157. Every person shall have capacity to contract unless that capacity is taken from him or restricted by operation of law.
33. 33 Article 158. A minor who is not of the age of discretion shall not have the right to deal in his property, and all his dealings shall be void. Article 159. (1) Financial dealings of a minor of the age of discretion shall be valid if they are purely for his own benefit, and void if they are purely to his detriment. (2) Dealings falling between pure benefit and pure detriment shall depend upon the consent of the guardian within the limits within which it is pe rmissible for him to make dispositions either immediately or by ratification by the minor after his attaining the age of adulthood. (3) The age of discretion shall be 7 complete Hijra years. Article 160. (1) A guardian may permit a minor who has reached the age of 18 Hijra years to receive all or part of his property to administer it. (2) It shall be permissible for the court upon hearing the evidence of the guardian to permit a minor who has attained the age of 18 Hijra years to receive all or some of his property to administer it. (3) The provisions relating to the above shall be laid down by law. Article 161. A minor who is authorised to make dealings within the terms of the authorisation shall have the same status as an adult. Article 162. It shall not be permissible for a minor whether under guardianship or tutelage to trade unless he has attained the age of 18 Hijra years, and the court has given him absolute or limited authority so to do.
34. 34 Article 163. (1) A judge may grant authorisation to a minor of the age of discretion where his guardian has withheld authorisation, and the guardian may impose no restriction upon the minor thereafter. (2) The judge may, after giving authorisation, reimpose the restriction upon the minor. Article 164. The guardian of the property of a minor shall be first his father then the executor of his father then the true grandfather then the judge or the guardian appointed by the judge. Article 165. The law shall determine the necessary capacity which the guardian must have in order to exercise his rights of guardianship over property. Article 166. Contracts of administration issued by a guardian over the property of a minor shall be valid and effective in accordance with the conditions and provisions laid down by law. Article 167. Dispositions made by the guardian in respect of the property of a minor not falling within acts of administration shall be valid.and effective in accordance with the provisions and conditions laid down by law. Article 168. (1) Minors, insane persons and imbeciles shall be ipso facto under a restriction. (2) With regard to idiots and persons under a mental disability, the judge shall impose restrictions upon them and lift such restrictions in accordance with the rules and procedures laid down by law.
35. (3) Notice shall be given of the restricting order to t he persons so restricted, and the reason therefor shall be publicly declared. 35 Article 169. Adult insane persons and imbeciles who are under a restriction shall be of the same status as a minor of no capacity. Article 170. (1) Dispositions made by an idiot or person suffering from a mental disability occurring after either an application for a restriction has been made or after an order in that behalf has been made or after an application or order for restoration of guardianship has been made shall be subject to the same provisions as govern dispositions made by persons of defective capacity. (2) With regard to dispositions made prior to such restriction, they shall not be void or voidable unless they result from exploitation or conspiracy. Article 171. (1) It shall be permissible for the court to permit a person under a restriction on the grounds of idiocy or mental disability to have all or part of his property for administration thereof. (2) The law shall lay down provisions in that behalf. Article 172. The laws shall set out the procedures to be followed with regard to restrictions over restricted persons, the management and exploitation of their property, and dealing therein, and other questions relating to guardianship, tutelage and protection. Article 173. If a person is deaf and dumb or blind and deaf, or blind and dumb and he is by reason thereof unable to express his intent, it shall be permissible for the judge to appoint a judicial assistant for him to help him in his dispositions if his interests so require, in such manner as is laid down by law.
36. 36 Article 174. Dispositions made by guardians, tutors or protectors shall be valid within the limits laid down by law. Article 175. If a person of defective capacity uses deceitful means to conceal his defect in capacity, he shall be bound to pay compensation. (4) Defects in Consent (a) Duress Article 176. Duress is coercion of a person without the right of so doing to perform an act without his consent. Duress may be forcible or non-forcible, and may be material or moral. Article 177. Duress is forcible if it is threat of grave and imminent danger to person or property. It is non-forcible if it involves a lesser threat. Article 178. A threat to cause harm to a person's parents, children, spouse or sibling or a threat of a risk prejudicial to honour shall be regarded as duress, and may be forcible or non-forcible as the case may be. Article 179. Forcible duress nullifies consent and vitiates free choice. Non-forcible duress nullifies but does not vitiate free choice.
37. 37 Article 180. Duress may vary according to different persons, their age, weakness, position, rank, influence, the degree to which they are hurt by the duress whether lesser or greater, and by any factor which may affect the seriousness of the duress. Article 181. In order for there to be duress the person exercising it must be capable of carrying out his threat, and the victim must believe that the threat will be carried out immediately if he does not do that which he is coerced into doing. Article 182. A person who exercises either kind of duress to conclude a contract may not enforce his contract, but the contract will be valid if the victim or his heirs so permit after the threat has ceased, either expressly or by their acts. Article 183. If a husband coerces his wife by beating her or forbidding her to see her family or the like, to cede to, him a right of hers or to give him property, the disposition will not be effective. Article 184. If the duress is exercised otherwise than by one of the contracting parties, the person coerced into contracting may not claim that the contract is ineffective unless he proves that the other contracting party knew or is presumed to have known of the duress. (b) Deception and cheating [Tr: The word translated as "cheating" is ghubn, meaning trickery or persuasion of a person to enter into an unconscionable bargain involving an imparity between the consideration moving from each party].
38. 38 Article 185. Misrepresentation is when one of the two contracting parties deceives the other by means of trickery of word or deed which leads the other to consent to what he would not otherwise have consented to. Article 186. Deliberate silence concerning a fact or set of circumstances shall be deemed to be a misrepresentation if it is proved that the person misled thereby would not have made the contract had he been aware of that fact or of circumstances. Article 187. If one of the contracting parties makes a misrepresentation to the other and it transpires that the contract was concluded by a gross cheat, the person so misled may cancel the contract. Article 188. Gross cheating involving land or otherwise is a bargain which no ordinary person conversant with that market could contemplate as reasonable. Article 189. If the cheating, however slight, affects the property of a person under judicial restriction on account of a debt or a terminally ill person, and that person's liabilities exceed his assets, the contract shall be dependent upon the cheating being redressed, or the consent of the creditors, otherwise it shall be void. Article 190. If the misrepresentation is made by a person other than the contracting parties, and the person to whom the misrepresentation was made proves that the other contracting party knew of the misrepresentation, it shall be permissible for him to cancel the contract.
39. 39 Article 191. A contract may not be cancelled on the basis of a gross cheat in the absence of misrepresentation save in respect of property of a person under restriction, waqf property, and property of the State. Article 192. The right to cancel for misrepresentation and gross cheat shall lapse on the death of the person having the right to apply for the cancellation or upon a dealing made in the subject matter of the contract in whole or in part in such a way as implies consent, or if the property is destroyed while in the possession of the person who would otherwise have such right, or if he consumes it, damages it, or increases it. (c) Mistake Article 193. No regard shall be had for any mistake save in so far as it is contained in the form of the contract or demonstrated by the surrounding circumstances and conditions, or the nature of things, or custom. Article 194. If there is a mistake as to the identity of the contract or as to one of the conditions upon which it is made or as to the subject matter of the contract, the contract shall be void. Article 195. A contracting party shall have the right to cancel the contract if he has made a mistake in a desired (non-essential) matter such as a characteristic of the subject matter of the contract or the identity of the other contracting party or as to a characteristic of such person. Article 196.
40. A contracting party shall have the right to cancel the contract if he makes a mistake of law and the conditions relating to a mistake of fact under Articles 193 and 195 are satisfied, unless the law provides otherwise. 40 Article 197. A mere mistake in an account or in a writing shall not affect the contract, and it shall simply be rectified. Article 198. A person who has made a mistake may not rely on it in a manner inconsistent with good faith. (5) The subject matter and purpose of the contract (a) The subject matter of the contract Article 199. Every contract must have a subject matter to which it attaches. Article 200. (1) In transactions involving property, the subject matter of the contract must be property which may lawfully be dealt in. [Tr: "Mutaqawwim", see Art. 96.] (2) The subject matter may be specific property or a benefit or any other right in property, and likewise the subject matter may be an act or refraining from an act. Article 201. If the subject matter is inherently impossible at the time the contract is made, the contract shall be void. Article 202.
41. (1) A future thing may properly be the subject matter of commutative contracts involving property, in the absence of uncertainty (Gharar - see Chapter IV of Book Two). (2) It shall not, however, be permissible to deal in the after death estate of a person still living notwithstanding that that person may have consented, save in the cases provided for by law. 41 Article 203. (1) In commutative contracts involving property the subject matter must be specified in such a way as to avoid gross'uncertainty by reference to it or to the place where it is if it is in existence at the time of the contract or a statement of its distinguishing characteristics, and the amount thereof must be stated if it is measurable property or the like, so as to avoid gross uncertainty. (2) If the subject matter is known to both contracting parties there is no requirement that it should be otherwise described or defined. (3) If the subject matter is not specified as aforesaid, the contract shall be void. Article 204. If the subject matter of the disposition or the consideration therefor is money, its amount and type must be specified without any increase or decrease in the value of that money at the time of payment having any effect. Article 205. (1) The subject matter must be such as falls within the ambit of a contract. (2) If the law prohibits dealing in a thing or if it is contrary to public order or morals, the contract shall be void. Article 206. The contract may be accompanied by a condition confirming its purport or consistent with it or in accordance with usage and custom or containing an advantage to one of the contracting parties or a third party, provided that in the case of all of the foregoing it is not prohibited by law or contrary to public order or morals, otherwise the condition shall be void and the contract shall be valid,
42. unless the condition is the inducement to make the contract, in which case the contract also shall be void. (b) The purpose of the contract 42 Article 207. (1) The reason is the direct purpose aimed at by the contract. (2) The reason must be existent, valid, and permitted, and not contrary to public order or morals. Article 208. (1) The contract shall not be valid if it does not contain a lawful benefit to both contracting parties. (2) A contract shall be presumed to contain such lawful benefit unless there is evidence to the contrary. (6) Valid, void and defective contracts (a) The valid contract Article 209. A valid contract is a contract which is lawful in its essence and description, being made by a competent person in respect of a subject matter properly falling within the ambit of a contract, having an existing, valid and lawful purpose and in proper form, and unaccompanied by any vitiating condition. (b) The void contract Article 210. (1) A void contract is one which is unlawful in its essence and form, lacking the elements of a contract or defective in its subject matter or purpose or form as laid down by law for the making of a contract, and such contract shall be of no effect and shall not be capable of being rectified by consent.
43. (2) Any person having an interest may rely on the voidness of the contract and a judge may so rule of his own motion. (3) No claim (for a declaration) that a contract is void shall be heard after the expiry of 15 years from the date the contract was made, but any person having an interest may raise the defence of the voidness of the contract at any time. 43 Article 211. (1) If part of a contract is void the entire contract shall be void unless the subject matter of each part is (separately) specified in which case it shall be void as to the void part, and the remainder shall be valid. (2) If part of a contract is dependent upon the grant of a consent, then if the consent is given the whole contract will be effective and if the consent is not given only that part will be void together with the consideration therefor, and the remaider of the contract with its consideration will be valid. (c) The defective contract Article 212. (1) A voidable contract is one which is lawful in its essence but not in form, and if the cause of the voidability is removed, the contract shall be valid. (2) A transfer of ownership under a voidable contract shall only be effective if the property itself has been received. (3) A voidable contract shall only have effect within the area laid down by the provisions of the law. (4) Each of the parties to the contract and their heirs shall have the right to cancel the contract after giving notice to the other contracting parties. (7) Suspended and non-binding contracts (a) The suspended contract Article 213. A disposition shall be dependent for the effectiveness thereof upon ratification it it is made by a volunteer in respect of property belonging to another or by an
44. owner in respect of property of his encumbered by a third party right or by a person lacking capacity in respect of his own property, where such transaction lies in the area between (pure) advantage and (pure) detriment or is made under duress, or if the law so provides. 44 Article 214. The right to grant or withhold consent to the contract shall be that of the owner or the person in whose favour the right over the thing contracted for exists, or in the tutor or guardian, or in the person of defective capacity after the defect has been remedied, or the person who has suffered duress after the duress has been removed, or such person to whom the law gives that power. Article 215. (1) Consent may be by any act or word indicating the same expressly or by implication. (2) Silence shall be taken to be consent if by custom it indicates consent. Article 216. It is a condition of the validity of the consent that the disposition should have been one capable ofbeing consented to at the time it was made and at the time the consent is given, and it is likewise a condition that at the time the consent is given, there should be in existence the person who had the right to give the consent, the two parties to the contract, the subject matter of the contract, or a substitute therefor if it is a specified thing. Article 217. (1) If consent is given to a suspended transaction, it shall become effective retroactively to the time it was made, and the subsequent consent shall have the same effect as a prior agency. (2) If consent is refused, the disposition shall be void. (b) The non-binding contract
45. 45 Article 218. (1) A contract shall not be binding on one or both of the contracting parties despite its validity and effectiveness if there is a condition that such party may cancel it without mutual consent or an order of the court. (2) Each party may act unilaterally in cancelling it if by its nature the contract is not binding upon him or if he has made it a condition in his own favour that he has the option to cancel. (8) Options affecting the binding nature of the contract (a) The option of conditionality Article 219. In binding contracts which are liable to be cancelled it shall be permissible for the contracting parties or either of them to make it a condition in the contract or thereafter that he should enjoy the benefit of the option of conditionality in his own or another's favour for such period as may be agreed between the parties, and if they do not agree on a particular period, it shall be permissible for the judge to specify that period in accordance with custom. Article 220. If each of the two contracting parties has the advantage of the benefit of conditionality in commutative contracts involving property and the consideration on both sides has not left the ownership of either of the contracting parties but one then exercises the option to cancel, that property shall not pass out of his ownership neither shall the property of the other pass into the ownership of the first. Article 221. (1) The person having the benefit of the option of conditionality shall have the right to cancel or to affirm the contract. (2) If he elects to confirm the contract, it shall become binding with retroactive effect to the date on which it was made, and if he elects to cancel it, the contract shall be cancelled and deemed void ab initio.
46. 46 Article 222. If both of the contracting parties have the advantage of the option of conditionality and one of them elects to cancel the contract, the contract shall be cancelled notwithstanding that the other may have affirmed, and if one affirms the contract the other shall retain his option to cancel throughout the period laid down for the option. Article 223. (1) Cancellation or affirmation may take place by any act or word indicating the same, whether expressly or by implication. (2) If the period expires without the option to cancel or to affirm being exercised, the contract shall become binding. Article 224. (1) In order for the cancellation to be valid, the option in that behalf must have been exercised within the period thereof and the other party notified thereof if the cancellation is effected by words and is not dependent on mutual consent or an order of the court. (2) With regard to affirmation, it is not a requirement (of the contract becoming binding) that the other party should know of it. Article 225. The option shall lapse upon the death of the person entitled to exercise it during the period thereof. The contract shall become binding with regard to his heirs, and the other party shall retain his option, if he originally had an option, until the expiry of the period thereof. (b) - The option to inspect Article 226.
47. The option to inspect shall arise in contracts liable to cancellation in favour of the person to whom the disposition is made even though not expressly stipulated if the subject matter of the contract has not been seen, and is specified. 47 Article 227. The option to inspect shall remain until the inspection is carried out within the agreed period, or until anything occurs which causes it to lapse. Article 228. The option to inspect shall not prevent the contract becoming effective but will only prevent it becoming binding on the person in whose favour the option exists. Article 229. (1) The option to inspect shall not lapse by non-exercise. (2) The option will lapse upon the inspection of the thing contracted for and its acceptance whether expressly or by implication, and it will likewise lapse upon the death of the person having the option, the destruction of the goods concerned, whether in whole or in part, or by their becoming defective, or the disposition thereof by a person having the right so to do by way of a disposition which may not be cancelled, or in such a way as gives rise to a right in a third party. Article 230. Cancellation under the option to inspect may be by any act or word indicating the same whether expressly or by implication, but on condition that the other contracting party is aware thereof. (c) The option to specify (one out of two or more potential objects of the contract) Article 231. It shall be permissible to agree that the subject matter of the contract shall be one of two or three things, and that one of the contracting parties should have
48. the right to choose between them on condition that the consideration for each and the period of the option is expressed. 48 Article 232. If the contracting parties do not specify the period of the option or if the period laid down for one of them to exercise it expires without the election being made, it shall be permissible for the other party to apply to the judge to fix the period of the option or to determine the subject matter of the disposition. Article 233. The contract shall not be binding upon the person having the right to exercise the option until that right is exercised, and if the option is exercised expressly or by implication the contract shall become binding and effective in connection with the subject matter over which the option is exercised. Article 234. The exercise of the option shall relate back to the time the contract came into existence. Article 235. (1) If the option to select is vested in a purchaser and one of the two things is lost while in the hands of the seller, the purchaser shall have the option if he so wishes to take the other thing at its price or to leave it, but if both things are 'lost, the sale shall be void. If the loss takes place after the purchaser has received the things to be sold and one of the two things is lost while in the hands of the purchaser, that thing shall be designated as the thing sold and the purchaser shall be bound to pay the price, and the other thing shall be regarded as being held in trust. If the two things are lost in succession, the first shall be regarded as the thing sold and the second as held in trust, and if they are lost simultaneously the purchaser shall be bound to pay half the price of each. (2) If the option to appoint is vested in the seller and one of the things is lost before or after receipt, the seller shall have the right to elect either that
49. the purchaser shall be bound to take the remaining thing or that the contract be cancelled, and if both things are lost before receipt, the contract shall be void. If the two things are lost in succession after receipt, the first thing lost shall be regarded as held in trust and the second as the thing sold, and if they are lost at the same time, the purchaser shall be bound to pay half the price of each. 49 Article 236. If the person having the option to appoint dies during the period of the option, his right shall be transferred to his heirs. (d) The option to reject for defects Article 237. Contracts capable of being cancelled shall carry with them the right to cancel the contract under the defects option without there being a condition in that behalf in the contract. Article 238. In order for a defect to give rise to an option to reject, it must be old (pre-existing), it must affect the value of the subject matter of the contract, it must be unknown to the purchaser, and the seller must not have contracted for an exemption from liability in respect of it. Article 239. (1) If the conditions set out in the preceding Article are satisfied in respect of a defect, the contract is not binding on the person having the right to exercise the option before taking delivery, and is liable to cancellation thereafter. (2) The contract will be cancelled prior to taking delivery by any matter demonstrating the same, without the need for mutual agreement or an order of the court on condition that the other party is aware (of the cancellation), but after delivery has been taken cancellation must be by mutual consent or by order of the court.
50. 50 Article 240. If a contract is cancelled by reason of a defect, the subject matter of the contract is to be returned to the owner, and the price paid is recoverable. Article 241. (1) The option to reject for a defect shall lapse by non-exercise or by acceptance of the defect after knowledge thereof, by dealing in the thing contracted for even prior to such knowledge, by its being destroyed or damaged after receipt or by its being increased prior to receipt by way of direct connection with the thing, not arising from the thing itself, by the act of the purchaser, or after receipt by way of a single increase arising out of the thing itself. (2) The option to reject for a defect shall not lapse by reason of the death of the person having that option, but shall enure to the benefit of his heirs. Article 242. The person having the option to reject for a defect may also retain the thing contracted for and claim for the reduction in value. Section 3 - The effects of the contract (1) With regard to the contracting parties Article 243. (1) The contract shall apply to the subject matter of the contract and the consideration therefor as soon as the contract is made, and shall not depend upon receipt or any other thing unless the law provides otherwise. (2) With regard to the rights (obligations) arising out of the contract, each of the contracting parties must perform that which he is obliged to do under the contract. Article 244. In the case of commutative contracts for specific property, provided the conditions for the validity thereof are satisfied, each of the contracting parties
51. must have an established right to dispose of the property, and each shall have an obligation to deliver the subject matter of the contract to the other. 51 Article 245. In the case of commutative contracts to derive benefits from property, provided the conditions for the validity thereof are satisfied, the person dealing in the property shall have the obligation to deliver it to the usufructuary, and the usufructuary shall have the obligation to deliver the consideration for the benefit to the owner of the property. Article 246. (1) The contract must be performed in accordance with its contents, and in a manner consistent with the requirements of good faith. (2) The contract shall not be restricted to an obligation upon the contracting party to do that which is (expressly) contained in it, but shall also embrace that which is appurtenant to it by virtue of the law, custom, and the nature of the transaction. Article 247. In contracts binding upon both parties, if the mutual obligations are due for performance, each of the parties may refuse to perform his obligation if the other contracting party does not perform that which he is obliged to do. Article 248. If the contract is made by way of adhesion and contains unfair provisions, it shall be permissible for the judge to vary those provisions or to exempt the adhering party therefrom in accordance with the requirements of justice, and any agreement to the contrary shall be void. Article 249. If exceptional circumstances of a public nature which could not have been foreseen occur as a result of which the performance of the contractual obligation, even if not impossible, becomes oppressive for the obligor so as to threaten him with grave loss, it shall be permissible for the judge, in accordance with the
52. circumstances and after weighing up the interests of each party, to reduce the oppressive obligation to a reasonable level if justice so requires, and any agreement to the contrary shall be void. 52 (2) With regard to third parties Article 250. The effects of the contract shall extend to the contracting parties and their general successors without prejudice to the rules relating to inheritance, unless it appears from the contract or from the nature of the transaction or from the provisions of the law that the effects were not to extend to a general successor. Article 251. If the contract gives rise to personal rights connected with a thing transferred thereafter to aspecial successor, such rights shall be transferred to such successor at the time at which the thing is transferred if it is one of the appurtenances thereof and the special successor was aware of those rights at the time of the transfer of the thing to him. Article 252. A contract may not impose an obligation upon a third party but it may create a right in him. Article 253. (1) If a person undertakes to procure a third party to enter into an obligation the third party will not be bound by that undertaking, and if the third party refuses to be bound the person making the undertaking must compensate the other contracting party. He may nevertheless be released from having to make compensation by himself performing the obligation in respect of which he gave the undertaking. (2) If however the third party agrees to the undertaking, his agreement shall take effect only from the time it was given, unless it appeared that he expressly or impliedly intended that the effect of the agreement should relate back to the time the undertaking was made.
53. 53 Article 254. (1) It shall be permissible for a person to contract in his own name imposing a condition that rights are to enure to the benefit of a third party if he has a personal interest, whether material or moral, in the performance thereof. (2) Such a condition shall confer upon the third party a direct right against the undertaker for the performance of that condition in the contract enabling him to demand the performance thereof unless there is a contrary agreement, and such undertaker may rely as against the beneficiary on any defences arising out of the contract. (3) The person making the condition may also demand the performance of the condition in favour of the beneficiary, unless it appears from the contract that the beneficiary alone has such a right. Article 255. (1) The person imposing that condition in the contract, but not his oligees or heirs, may cancel that condition before the beneficiary gives notice to the undertaker or the person imposing the condition of his intention to benefit thereby, unless that is contrary to the purport of the contract. (2) The cancellation of the condition shall not relieve the undertaker of his obligation to the party imposing it unless there is an express or implied agreement to the contrary. The person imposing the condition may replace the first beneficiary by another, and he may also allocate the benefit of the condition for himself. Article 256. In imposing a condition in favour of a third party it shall be permissible for the beneficiary to be a future person or future body, and the beneficiary may also be a person or body not specified at the time the contract is made if such beneficiary is ascertainable at the time the contract is to be given effect to in accordance with the condition. Section 4 - The construction of contracts
54. 54 Article 257. The basic principle in contracts is the consent of the contracting parties and that which they have undertaken to do in the contract. Article 258. (1) The criterion in (the construction of) contracts is intentions and meanings and not words and form. (2) The primary rule is that words have their true meaning and a word may not be construed figuratively unless it is impossible to give it its direct meaning. Article 259. There shall be no scope for implications in the face of clear words. Article 260. Words should be given effect to rather than ignored, but if it is impossible to give effect to words, they shall be ignored. Article 261. Reference to part of an indivisible shall count as reference to the whole. Article 262. An unconditional provision shall be so construed unless there is evidence, whether textual or circumstantial, restricting it. Article 263. A description of that which is present is a superfluity, but a description of that which is absent shall have effect. Article 264.
55. Known custom as between merchants shall have the effect of (express) conditions made between them. 55 Article 265. (1) If the wording of a contract is clear, it may not be departed from by way of interpretation to ascertain the intention of the parties. (2) If there is scope for an interpretative construction of the contract, an enquiry shall be made into the mutual intentions of the parties beyond the literal meaning of the words, and guidance may be sought in so doing from the nature of the transaction, and the trust and confidence which should exist between the parties in accordance with the custom current in (such) dealings. Article 266. (1) A doubt shall be resolved in favour of the obligor. (2) Nevertheless it shall not be permissible to construe ambiguous words in contracts of adhesion in a manner detrimental to the interests of the adhering party. Section 5 - The dissolution of a contract (1) General provisions Article 267. If the contract is valid and binding, it shall not be permissible for either of the contracting parties to resile from it, nor to vary or rescind it, save by mutual consent or an order of the court, or under a provision of the law. Article 268. The contracting parties may mutually revoke the contract by their mutual consent after it has been concluded. Article 269.
56. So far as concerns the contracting parties revocation amounts to cancellation, and with regard to a third party amounts to a new contract. 56 Article 270. Revocation shall be by offer and acceptance in the session (majlis), and by receiving (back the thing contracted for) on condition that the subject matter of the contract is in existence and in the possession of the contracting party at the time of the revocation, and if part of it has been lost the revocation shall be valid as to the remainder to the extent of the amount of the consideration attributable to it. Article 271. It shall be permissible to agree that a contract shall be regarded as being cancelled spontaneously (automatically) without the need for a judicial order failing performance of the obligations arising thereout, and such agreement shall not dispense with notice unless the contracting parties have expressly agreed that it should be dispensed with. Article 272. (1) In contracts binding on both parties, if one of the parties does not do what he is obliged to do under the contract, the other party may, after giving notice to the obligor, require that the contract be performed or cancelled. (2) The judge may order the obligor to perform the contract forthwith or may defer (performance) to a specified time, and he may also order that the contract be cancelled and compensation paid in any case if appropriate. Article 273. (1) In contracts binding on both parties, if force majeure supervenes which makes the performance of the contract impossible, the corresponding obligation shall cease, and the contract shall be automatically cancelled. (2) In the case of partial impossibility, that part of the contract which is impossible shall be extinguished, and the same shall apply to temporary impossibility in continuing contracts, and in those two cases it shall be permissible for the obligor to cancel the contract provided that the obligee is so aware.
57. (2) The effects of dissolution of the contract 57 Article 274. If the contract is cancelled automatically or by the act of the parties, the two contracting parties shall be restored to the position they were in before the contract was made, and if that is not possible, compensation shall be ordered. Article 275. If the contract is dissolved by reason of voidness or cancellation or through any other cause and each of the parties is obliged to return that which he has obtained, it shall be permissible for each of them to detain what he has received so long as the other party has not returned what he has received from the former, or provided security for such return. Part 2 - Unilateral dispositions Article 276. It shall be permissible for a disposition to take place through the unilateral intention of the disponor without depending on the acceptance of the disponee unless a third party becomes obligated in any respect as laid down in the law, provided that there is no provision in the law to the contrary. Article 277. The provisions relating to contracts shall apply to unilateral acts with the exception of those provisions relating necessarily to the existence of a mutual corresponding intention to establish a contract, unless the law provides to the contrary. Article 278. If the elements and conditions of a unilateral disposition are satisfied, it shall not be permissible for the disponor to resile from it, unless the law provides to the contrary.
58. 58 Article 279. (1) If the unilateral disposition amounts to a passing of property, then it shall only be effective with regard to the disponee upon his acceptance thereof. (2) If the act is a waiver amounting to a passing of property or a discharge from an obligation, it shall be effective with regard to the disponee but may be retracted during the time of the majlis. (3) If the act is a pure waiver, it shall be effective with regard to the disponee and may not be retracted. (4) All of the above is subject to any provision of the law to the contrary. Article 280. (1) A promise is something imposed by a person on himself in favour of another relating to the future, otherwise than by way of an obligation with regard to property, and it may be for a contract or to do an act. (2) A promise binds the maker unless he dies or becomes bankrupt. Article 281. (1) Whoever promises a prize to the public for performing a particular act and fixes a time limit for it shall be bound to give the prize to the person who performs that act notwithstanding that the act was performed without regard to the promise of the prize. (2) If the promisor does not fix a time limit for the performance of the act it shall be permissible for him to resile from his promise by a public notice but provided that that shall not affect the rights of a person who has performed the act prior to the revocation of the promise. No claim for the prize shall be heard unless it is brought within three months from the date of notice being given of the revocation of the promise. Part 3 - Acts causing harm Section 1 - General provisions
59. 59 Article 282. Any harm dome to another shall render the actor, even though not a person of discretion, liable to make good the harm. Article 283. (1) Harm may be direct or consequential. (2) If the harm is direct, it must unconditionally be made good, and if it is consequential there must be a wrongful or deliberate element and the act must have led to the damage. Article 284. If the harm is both direct and consequential, the rules relating to direct harm shall apply. Article 285. If a person deceives another he shall be liable to make good the harm resulting from that deception. Article 286. No person who has been caused loss in his property by another may cause that other loss in his property, otherwise each shall be bound to make good the loss he has caused to the other. Article 287. If a person proves that the loss arose out of an extraneous cause in which he played no part such as a natural disaster, unavoidable accident, force majeure, act of a third party, or act of the person suffering loss, he shall not be bound to make it good in the absence of a legal provision or agreement to the contrary. Article 288.
60. Any person who causes damage in the course of lawful defence of himself, his honour, or his property, or the defence of the person, honour or property of another, shall not be responsible for such damage provided that he has done no more than was necessary, otherwise he shall be bound to make good the excess. 60 Article 289. (1) The act shall be regarded as being that of the actor and not of the person who ordered him to do it unless the actor is so compelled, provided that for there to be compulsion in respect of a physical act it must amount to forcible duress and no less. (2) Nevertheless a public servant shall not be liable for his acts causing harm to others if he performed them in execution of an order given to him by his superior, and he is obliged to obey such order, or believed that he had to do so, and if he provides evidence of his belief in the lawfulness of the act which he does, such belief being based on reasonable grounds, and provided that he acts with prudence and caution. Article 290. It shall be permissible for the judge to reduce the level by which an act has to be made good or to order that it need not be made good if the person suffering harm participated by his own act in bringing about or aggravating the damage. Article 291. If a number of persons are responsible for a harmful act, each of them shall be liable in proportion to his share in it, and the judge may make an order against them in equal shares or by way of joint or several liability. Article 292. In all cases the compensation shall be assessed on the basis the amount of harm suffered by the victim, together with loss of profit, provided that that is a natural result of the harmful act. Article 293.
61. (1) The right to have damage made good shall include moral damage, and an infringement of the liberty, dignity, honour, reputation, social standing or financial condition of another shall be regarded as being moral damage. (2) It shall be permissible for an order to be made by way of compensation for moral damage caused to a spouse or relatives of the family, by reason of the death of the victim. (3) The right to receive compensation for moral damage may not be transferred to a third party unless the amount of it has been fixed by agreement or by a final judicial order. 61 Article 294. The compensation may be made payable by instalments or by of a regular income, and in those events the obligor may be ordered to provide a guarantee assessed by the judge, or acceptable security. Article 295. The compensation shall be assessed in money, but provided that the judge may, according to the circumstances and upon the application of the victim, order that the plaintiff be restored to his former position, and he may also order that a specific act connected with the harmful act be performed by way of making good. Article 296. Any condition purporting to provide exemption from liability for a harmful act shall be void. Article 297. Civil liability shall be without prejudice to criminal liability provided that the elements of criminal liability are present, and no criminal penalty shall limit the scope of the civil liability or the assessment of the compensation. Article 298.
62. (1) No claim for compensation arising out of a harmful act shall be heard after the expiration of three years from the day on which the victim became aware of the occurrence of the harm and of the identity of the person responsible for it. (2) Provided that if such claim arises out of a crime and the criminal proceedings are still current after the expiry of the time limit referred to in the foregoing paragraph, the claim for compensation shall not be barred. (3) No claim for compensation shall be heard in any case upon the expiration of fifteen years from the day on which the harmful act took place. Section 2 - Liability for personal acts (1) Harm done to the person 62 Article 299. Compensation shall be payable for any harm caused to a person. Provided that in cases in which the diya (blood money) or arsh (shari'a damages for personal injury not resulting in death) are payable, they shall not be payable in addition to such compensation unless the parties agree to the contrary. (2) Damage to property Article 300. Whoever destroys or damages property of another shall be obliged to make it good in kind if it can be so made good, and to pay the value thereof otherwise, subject to the general provisions relating to indemnification. Article 301. If the damage is partial, the person causing it shall be bound to make good the decrease in value, and if the decrease in value is serious (gross) the owner of the property may elect between taking the equivalent of the decrease in value, or abandoning the damaged property and taking the (full) value thereof, subject to the general provisions relating to indemnification. Article 302.
63. (1) If a person damages the property of another in the belief that if it is his own, he shall be bound to make good the loss. (2) If a person damages the property of another with the permission of the owner thereof, he shall not be bound to make good the loss. 63 Article 303. If a minor, whether of discretion or not, or any person of similar status, damages the property of another, he shall be bound to make it good out of his own property. (3) Expropriation and trespass to goods Article 304. (1) The hand shall be bound to restore that which it has taken, and shall remain bound until it does so. (2) Whoever misappropriates property belonging to another must restore it to that other in the condition it was in when, and at the same place where, the misappropriation took place. (3) If (the tortfeaser) has consumed or damaged the goods or if they have diminished or been damaged either with or without a wrongful act on his part, he must make good in kind or in value as at the day and place of misappropriation. (4) He must also hand over any benefits or increase he has obtained from such property. Article 305. If a person damages misappropriated goods in the hands of the misappropriator, the person from whom the goods have been misappropriated shall have an election whether to make the misappropriator liable, and the latter may have recourse against the person who caused the damage, or he may, if he wishes, impose the liability on the person causing the damage, in which case the person causing the damage will not have any recourse against the misappropriator . Article 306.
64. If the misappropriator disposes of the goods misappropriated by way of commutative contract or by way of gift and the goods misappropriated are lost in whole or in part in the hands of the person to whom the misappropriator, made the disposition, the person from whom the goods have been misappropriated may elect to make either of them liable, and if he elects to make the misappropriator liable his disposition shall be valid, and if he elects to make the person to whom the misappropriator has made the disposition liable, such person shall have a right of recourse against the misappropriator in accordance with the provisions of the law. 64 Article 307. (1) A person who misappropriates goods from a misappropriator shall himself be regarded as a misappropriator. (2) If the misappropriator from a misappropriator returns the goods misappropriated to the first misappropriator, he alone shall be discharged of liability, and if he returns the goods to the person from whom they were misappropriated both he and the original misappropriator shall be discharged. (3) If the goods become damaged in the hands of a misappropriator from a misappropriator, the person from whom they have been misappropriated shall have an election whether to make the first misappropriator or the second misappropriator liable. He may also make the first liable for part and the second liable for part, and if he makes the first misappropriator liable, such person shall have a right of recourse against the second misappropriator, and if he makes the second misappropriator liable, the last mentioned person shall have no right of recourse against the first. Article 308. The judge may in all cases order the misappropriator to pay such compensation as he thinks appropriate if in his opinion that course is justified. Article 309. If a person has goods in his possession by way of trust and he is guilty of a default in preserving them, or is guilty of a wrong-doing in respect of them or refuses to return them to the owner without right, or if he wrongfully asserts
65. that they are his own, or if he dies and it is not known where the goods are, he shall be liable to return similar goods or the value thereof as the case may be. 65 Article 310. Whoever steals goods or seizes them by violence or takes goods must return them to their owner if they are still in existence, or must return similar goods or the value thereof if the goods are no longer available, notwithstanding that a criminal penalty may have been imposed upon him. Article 311. (1) If goods misappropriated change of their own, then the person from whom they have been misappropriated may elect between the recovery of those same goods, or a replacement thereof. (2) If goods misappropriated change in such a way that they become of a different description, (the misappropriator) shall be liable to make a replacement. (3) If goods misappropriated change by reason of a misappropriator having added something of his own to them, the person from whom they have been misappropriated may elect between paying the value of the increase and recovering the goods misappropriated in specie, or making the misappropriator liable to provide a replacement. (4) If the goods misappropriated suffer a decrease in value as a result of the use made by the misappropriator, the misappropriator must return those same goods and shall be liable for the shortfall in value. Article 312. Any act of the same nature as misappropriation shall be treated as misappropriation. Section 3 - Liability for the acts of others Article 313. (1) No person shall be liable for the act of another person, but nevertheless the judge may, upon the application of an injured party and in the event that in his opinion there is justification for taking that course, render any of the following
66. persons liable as the case may be to satisfy any amount awarded against a person who has caused the harm: (a) any person who by law or by agreement is obliged to supervise a person who requires supervision by virtue of his being an infant or by reason of his mental or physical condition, unless it is proved that he carried out his duty of supervision or that the damage would necessarily have occurred even if that duty had been carried out with the proper care; or (b) any person who has actual control, by way of supervision and direction, over a person who has caused the damage, notwithstanding that he may not have had a free choice, if the act causing harm was committed by a person subordinate to him in or by reason of the execution of his duty. (2) Any person obliged to make good may have a recourse against the person against whom the original award was made. Section 4 - Liability for animals and objects, and use of public roads (1) Damage done by animals 66 Article 314. Acts done by animals shall be regarded as inevitable, but that which they do shall be made good by the person having control of the animals, whether he is the owner or not, if he has been in default or guilty of a wrongdoing. (2) - Collapse of buildings Article 315. (1) Harm done to a third party by reason of the collapse of a building whether in whole or in part shall be made good by the owner of the building or the person having control over it unless it is proved that he was not guilty of any wrongdoing or default. (2) Any person who is threatened with harm which may befall him from a building may require the owner to take the necessary measures to avert the risk, and if
67. the owner does not take such measures, the judge may permit him to take those measures at the expense of the owner. (3) Things and equipment 67 Article 316. Any person who has things under his control which require special care in order to prevent their causing damage, or mechanical equipment, shall be liable for any harm done by such things or equipment, save to the extent that damage could not have been averted. The above is without prejudice to any special provisions laid down in this regard. (4) Use of public roads Article 317. The use of a public right is restricted (so far as is necessary to ensure) the safety of others, and any person who uses his public right and causes harm to another person which could have been avoided, shall be liable for the same. Part 4 - Acts conferring a benefit Section 1 - Unjust enrichment Article 318. No person may take the property of another without lawful cause, and if he takes it he must return it. Article 319. (1) Any person who acquires the property of another person without any disposition entitling him so to do must return it if that property still exists, or similar property or the value thereof if it no longer exists, unless the law otherwise provides. (2) If the property of any person leaves his possession without his so intending and by unavoidable process merges with the property of another person in such a way that it cannot be separated therefrom without causing harm to one of the
68. owners, the property of the lesser value shall be regarded as part of the property of the greater value after paying the value thereof, and if (the two parts) are of equal value then the property shall be sold and the proceeds distributed, unless there is an agreement or a provision of law to the contrary. Section 2 - Unjustified expropriation 68 Article 320. Whoever hands over a thing believing that he has a duty so to do, and it then becomes apparent that he had no such duty, may recover it from the person who took it if it still exists, or similar property or the value thereof if it does not still exist. Article 321. A recovery of property handed over without entitlement may be made if payment was made in satisfaction of a debt for which the cause had not materialised, or for a debt of which the cause has ceased to exist after it had materialised. Article 322. It shall be proper to recover money paid in satisfaction of a debt which has not matured, and in respect of which the payer was ignorant of the due date for payment. Article 323. If payment is obtained from a person other than the obligor and the result of that is that the obligee acting in good faith has been deprived of an instrument proving the debt or any security attaching thereto or if he has foreborne to make a claim against the true obligor within the time limit laid down, he does not have to return what he has taken, but the person who has paid may have a recourse against the true obligor for the obligation and render him a guarantor thereof if appropriate. Article 324.
