Contracts are a vital source of obligations between individuals and companies. The Kingdom ensures the proper execution of these contracts to guarantee the rights of the parties involved. Consequently, Saudi Arabia has implemented a documentation system to improve the contractual environment. In this article, we will discuss the definition and importance of documentation, and identify the individuals authorized to document contracts in the Kingdom of Saudi Arabia.
Definition of Documentation
According to Article 1 of the Documentation Law, documentation is defined as a set of procedures that ensure the verification of rights in a manner that is legally admissible. This serves to guarantee and preserve the rights of the parties involved in a contract. While it does not diminish the trust underlying transactions, documentation provides a secure method to reduce disputes between contracting parties and to regulate their relationship.
The Ministry of Human Resources and Social Development has also launched an initiative to document contracts. This initiative is an electronic program that allows employers to upload and update information related to the contracts of employees in the private sector. It also enables employees to verify the accuracy of their contract data. The initiative aims to encourage private sector establishments to draft contracts for all their employees. This is a simple example that illustrates the importance of documentation in Saudi Arabia and the Kingdom's efforts to guide individuals towards documenting all contracts to maintain contractual relationships and reduce disputes.
What is the Importance of Documenting Contracts?
Ensuring Legitimacy and Transparency: Documentation helps verify the commitment of parties to the content and details of the contract, enhancing transparency and ensuring that contracts comply with applicable laws and regulations.
Clarifying Rights and Obligations: Documentation facilitates the understanding of the rights and duties of the contracting parties, reducing the likelihood of conflicting interpretations in the future.
Providing Legal Evidence: Documentation provides strong legal evidence in case of potential disputes or conflicts. It makes it easier to present proof before courts and legal authorities.
Enhancing Trust Between Parties: Documentation helps build trust between contracting parties by demonstrating their serious commitment to fulfilling the agreements under the contract.
Encouraging Investment and Business Development: Documentation fosters a suitable and reliable business environment, encouraging investment and business development within the community.
The importance of documenting contracts in the Kingdom is clearly evident when considering the influx of complaints and lawsuits in courts. Many of these arise from contracts that are often based on excessive trust between parties or negligence in their drafting.
Therefore, the documentation of contracts, with its crucial definition, serves as a means to safeguard the rights of the contracting parties and to confirm and document their obligations. The importance of contract documentation lies in reviewing and ensuring that contracts are concluded in a proper and lawful manner.
An example of this is adhesion contracts, which must be well-documented and reviewed to ensure the rights of parties who might otherwise be exploited. This also applies to employment contracts and lease agreements.
In summary, the importance of documenting contracts is to ensure that the terms of the contract do not violate Islamic Sharia, public order, public morals, and the current regulations in the Kingdom of Saudi Arabia.
It is noteworthy that the importance of documenting contracts, whether commercial, civil, labor, or even marital, lies in reducing potential disputes between the parties to any contract and organizing and regulating the contractual relationship between them. Additionally, documenting contracts helps eliminate the prevalence of fictitious contracts.
It is also worth noting that the objectives of Islamic Sharia emphasize the importance of documenting contracts, as stated by Allah in Surah Al-Ma'idah: "O you who have believed, fulfill [all] contracts." Moreover, Allah warns us against breaking covenants or contracts after their affirmation, as mentioned in Surah Ar-Ra'd: "But those who break the covenant of Allah after contracting it and sever that which Allah has ordered to be joined and spread corruption on earth - for them is the curse, and they will have the worst home."
Among the noble verses that highlight the importance of documenting contracts between parties is one from Surah Al-Baqarah. Allah Almighty says: "O you who have believed, when you contract a debt for a specified term, write it down. And let a scribe write [it] between you in justice. Let no scribe refuse to write as Allah has taught him. So let him write and let the one who has the obligation dictate. And let him fear Allah, his Lord, and not leave anything out of it. But if the one who has the obligation is of limited understanding or weak or unable to dictate himself, then let his guardian dictate in justice. And bring to witness two witnesses from among your men. And if there are not two men [available], then a man and two women from those whom you accept as witnesses - so that if one of the women errs, then the other can remind her. And let not the witnesses refuse when they are called upon. And do not be [too] weary to write it, whether it is small or large, for its [specified] term. That is more just in the sight of Allah and stronger as evidence and more likely to prevent doubt between you, except when it is an immediate transaction which you conduct among yourselves. For [then] there is no blame upon you if you do not write it. And take witnesses when you conclude a contract. Let no scribe be harmed or any witness. For if you do so, indeed, it is [grave] disobedience in you. And fear Allah. And Allah teaches you. And Allah is Knowing of all things" (Al-Baqarah: 282).
Article 41 of the Saudi Documentation System clarifies that the documentation process endows the issued documents with evidentiary power. These documents are considered enforceable titles for the obligations they contain. They must be adhered to before courts without the need for additional evidence, and they cannot be contested. Documents issued in accordance with the documentation system can only be annulled by a judicial ruling based on their contradiction to Sharia principles or legal regulations, or due to forgery, following a fully completed legal and procedural trial.
Who Is Authorized to Perform Documentation in the Kingdom of Saudi Arabia?
According to Article 1 of the Documentation System, the individuals authorized to document contracts in the Kingdom of Saudi Arabia are as follows:
Notary Public
Documenter
Marriage Officiant
Below, we will outline the duties and limitations of each with regard to contract documentation:
Article 1 of the Documentation System states that a Notary Public is a government employee with a Sharia qualification, appointed to the position of Notary Public or Head of Notary Office. They are responsible for documenting contracts and declarations. Articles 11 of the Documentation System and 18 of its Executive Regulations specify the duties of a Notary Public in Saudi Arabia, which include:
Transferring ownership titles and legal deeds that have completed their Sharia and legal procedures, converting the use of legal deeds, and merging legal deeds and property titles issued by notary offices.
Providing certifications in social matters and validating witness testimonies.
Dividing joint properties, including real estate, if there is no dispute, or if the property is not subject to endowment, will, minor, or absentee shares.
Registering marriage contracts if one party is of Saudi nationality and the other is not.
Acknowledging compensation for damaged properties when necessary.
Recording agreements on custody, alimony, or visitation rights.
Acknowledging declarations by those unable to read.
Processing divorces, annulments, and reconciliations.
Establishing endowments and wills.
Mediation and reconciliation agreements.
Are there any restrictions for a notary public regarding the authentication of contracts in the Kingdom of Saudi Arabia?
Yes, there are.
Article 12 of the Saudi Authentication System stipulates that a notary public is not authorized to authenticate any acknowledgment or contract where one of the parties is a minor, absent, or incapacitated, except in specific cases defined exclusively by the system, which are as follows:
Acceptance of a gift.
Actions of a father concerning the property of his minor child.
Lease contracts with a duration that does not require permission from the competent court.
Disposal of real estate for public benefit unless the consideration is not real estate.
Seller's acknowledgment of the sale to the inheritor of the minor and receipt of the price before the inheritor's death.
Who is the notary public, and what are the conditions for their appointment?
The notary public is the one who performs authentication tasks under a license issued according to the provisions of the system. Additionally, the notary must meet certain conditions as defined by the system, which are as follows:
He must be of Saudi nationality.
He must have good conduct and behavior, with no criminal convictions related to religion or honor, nor has he been subjected to disciplinary action resulting in dismissal from a public position, even if his status has been restored.
He must be physically fit and in good health.
He must hold a university degree in Sharia or legal systems from one of the colleges in the Kingdom or its equivalent, with a general grade not less than good.
He must pass a written exam prepared by the competent authority.
He must complete specialized training in the field of authentication, unless he has worked for at least one year as a judge, notary public, lawyer, legal advisor, or legal consultant, or has taught jurisprudence, its principles, or systems at one of the Kingdom's colleges.
He must not be employed in the public or private sectors or engaged in any profession other than lawyering.
What are the duties of the notary public?
Execution of real estate ownership deeds.
Powers of attorney and their revocation.
Mortgage, release, and amendment.
Company establishment contracts, their amendments, and decisions of their competent authorities.
Minutes of general meetings of companies.
Transactions and contracts related to trademarks, patents, and copyrights.
Contracts related to movable property.
Acknowledgment of personal and penal guarantees.
Acknowledgment of financial amounts and movables, their receipt, and relinquishment.
What are the duties of the marriage officiant?
The marriage officiant is the one who authenticates marriage contracts under a license issued in accordance with the provisions of the system. It is entrusted to him to authenticate marriage contracts if both parties are Saudis or non-Saudis. According to Article 12 of the Executive Regulations of the Authentication System, the officiant must ensure the verification of the essential elements of the marriage contract, its conditions, and the absence of any impediments.
In conclusion, it is evident that authenticating contracts is of paramount importance in safeguarding the rights of individuals and companies, and enhancing trust and transparency in commercial and financial relationships. By ensuring the legitimacy of contracts and clarifying the rights and obligations of the parties involved, authentication contributes to building a stable and reliable contractual environment that encourages investment and economic growth. Therefore, individuals and companies should prioritize contract authentication and adhere to its provisions, as it is the fundamental guarantee for protecting their interests and fostering cooperation and development in various fields.
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