Riyadh: The Saudi Cabinet has approved the Civil Transactions Law, marking another significant step in the country’s legal reforms for 2021.

Crown Prince Mohammed bin Salman announced the law’s approval after a thorough review by the Shoura Council. The Civil Transactions Law is the third law to be approved out of the four announced legal reforms.

The crown prince emphasized that this law signifies a remarkable transformation within the system of specialized legislations. It was meticulously prepared, incorporating the latest legal trends and international judicial practices while adhering to the principles of Islamic Shariah and Saudi Arabia’s international obligations.

The law focuses on protecting property, ensuring stability and validity of contracts, identifying rights and obligations, and clarifying legal positions. Its implementation is expected to have a positive impact on the business environment, increasing its appeal, regulating economic activities, ensuring financial rights, facilitating investment decisions, enhancing transparency, and reducing disputes.

Despite the delay in its approval, which was necessary for further studies and scrutiny, the Civil Transactions Law is now set to redefine contracts, their elements, validity, effects, termination, and compensation. It also covers various forms of ownership and their corresponding regulations.

Dr. Khalid Al-Yousef, president of the Saudi Court of Grievances and head of the Administrative Judiciary Council, expressed his appreciation for King Salman and Crown Prince Mohammed bin Salman, acknowledging that the law will enhance dispute settlement efficiency, safeguard legal positions, and foster confidence among customers.

Minister of Commerce Majid Al-Qasabi highlighted on Twitter that the Civil Transactions Law was meticulously prepared, drawing from Islamic Shariah and contemporary life developments to protect property, financial rights, and prompt justice in line with international best practices.