Agreement to Amend the Rules of Contractual Liability under the Saudi Civil Transactions Law: An Analytical Study

Abstract

Abstract

When a contract is validly formed upon the fulfillment of its essential elements, namely consent, subject matter, and cause, an obligation arises. Contractual liability arises from this obligation when its two conditions are met: the existence of a valid contract and a breach of valid contractual obligations.

An agreement to amend the rules of contractual liability may be defined as an agreement between the contracting parties to modify the rules of contractual liability by completely exempting the debtor from liability, limiting liability by requiring the debtor to bear only part of it, or increasing liability by holding the debtor responsible for obligations from which the law exempts the debtor. These constitute the three forms of agreements to amend the rules of contractual liability.

The pre-contractual stage, also known as the negotiation stage, does not give rise to contractual liability because the contract has not yet been concluded. Therefore, this stage falls outside the scope of the contractual relationship, and the Saudi legislator has affirmed this principle.

Legal scholars differed over the permissibility of agreements to exempt a party from contractual liability before the enactment of many modern civil laws. Some scholars held that such agreements were permissible, while others prohibited them. The Saudi legislator, however, resolved this disagreement by permitting agreements to modify the rules of liability in all three forms, while excluding fraud and gross negligence from the permissible modification of contractual liability.