Federal Decree-Law No. 50 of 2022 On Commercial Transactions Law

Lexis Middle East
Federal Decree-Law No. 50/2022

On the Promulgation of the Commercial Transactions Law
Commercial Code
Type Law
Issued on 3 Oct 2022 (corresponding to 7 Rabi Al-Awwal 1444 H)
Nature Decree-Law
Jurisdiction United Arab Emirates
Document link: https://www.lexismiddleeast.com/law/UnitedArabEmirates/DecreeLaw_50_2022
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Federal Decree-Law No. 50/2022 On the Promulgation of the Commercial Transactions Law
Table of contents
Commercial Transactions Law ....................................................................................................................................................... 4
Preliminary Title (art. 1 - 3) ............................................................................................................................................... 4
Section 1 - Commerce in General (art. 4 - 68) .................................................................................................................... 5
Title 1 - Acts of Commerce, Merchants and Commercial Books (art. 4 - 35) ................................................................................ 5
Title 2 - Business Concern, Trade Name, Unfair Competition, Trademarks and Descriptions (art. 36 - 68) ............................... 10
Section 2 - Commercial Obligations and Contracts (art. 69 - 370) ................................................................................... 14
Title 1 - Commercial Obligations (art. 69 - 92) ........................................................................................................................... 14
Title 2 - Commercial Sale (art. 93 - 161) ..................................................................................................................................... 17
Title 3 - Commercial Mortgage (art. 162 - 175) ........................................................................................................................... 26
Title 4 - Deposit in Public Warehouses (art. 176 - 193) ............................................................................................................... 28
Title 5 - Securities Market and Commodity Contracts (art. 194 - 194) ........................................................................................ 30
Title 6 - Commercial Agency (art. 195 - 251) .............................................................................................................................. 30
Title 7 - Brokerage (art. 252 - 269) .............................................................................................................................................. 36
Title 8 - Transport (art. 270 - 370) .............................................................................................................................................. 38
Section 3 - Banking Operations (art. 371 - 508) ............................................................................................................... 50
Title 1 - Bank Deposits, Transfers and Accounts (art. 371 - 389) ................................................................................................ 50
Title 2 - Current Account (art. 390 - 408) .................................................................................................................................... 53
Title 3 - Bank Credits (art. 409 - 440) .......................................................................................................................................... 55
Title 4 - Operations on Commercial Papers (art. 441 - 450) ........................................................................................................ 59
Title 5 - Operations on Financial Securities (art. 451 - 467) ....................................................................................................... 60
Title 6 - Commercial Transactions of Islamic Financial Institutions (art. 468 - 497) .................................................................. 62
Title 7 - Lease of Safe Deposit Boxes (art. 498 - 508) .................................................................................................................. 65
Section 4 Commercial Papers (art. 509 - 514) .................................................................................................................. 67
Title 1 - Bill of Exchange (art. 515 - 621) .......................................................................................................................... 67
Chapter 1 - Making a Bill of Exchange (art. 515 - 528) ................................................................................................................ 67
Chapter 2 - Negotiation of the Bill of Exchange (art. 529 - 541) ................................................................................................. 69
Chapter 3 - Consideration for Payment of a Bill of Exchange (art. 542 - 549) ............................................................................. 70
Chapter 4 - Acceptance of the Bill of Exchange (art. 550 - 558) .................................................................................................. 71
Chapter 5 - Backing a Bill of Exchange (art. 559 - 562) ............................................................................................................... 72
Chapter 6 - Maturity of the Bill of Exchange (art. 563 - 567) ...................................................................................................... 73
Chapter 7 - Payment of a Bill of Exchange (art. 568 - 580) ......................................................................................................... 74
Chapter 8 - Claim and Recourse against the Obligors of a Bill of Exchange (art. 581 - 602) ....................................................... 75
Chapter 9 - Intervention of the Bill of Exchange (art. 603 - 611) ................................................................................................ 79
Chapter 10 - Bill Drawn in Several Copies (art. 612 - 614) .......................................................................................................... 80
Chapter 11 - Photocopies and Alterations of the Bill of Exchange (art. 615 - 617) ..................................................................... 80
Chapter 12 - Expiry of the Limitation Period Barring (art. 618 - 621) ......................................................................................... 81
Title 2 - Promissory Note (Order Note) (art. 622 - 625) .................................................................................................... 81
Title 3 - Cheque (art. 626 - 684) ....................................................................................................................................... 82
Chapter 1 - Issuance of a Cheque (art. 627 - 638) ....................................................................................................................... 82
Chapter 2 - Negotiation of the Cheque (art. 639 - 647) ............................................................................................................... 84
Chapter 3 - Payment of a Cheque (art. 648 - 658) ....................................................................................................................... 85
Chapter 4 - Crossed Cheque and Cheque Credited to Account (art. 659 - 662) ........................................................................... 86
Chapter 5 - Refraining from Payment (art. 663 - 667) ................................................................................................................. 87
Chapter 6 - Alterations and Plurality of Copies (art. 668 - 672) .................................................................................................. 88
Chapter 7 - Penalties (art. 673 - 684) .......................................................................................................................................... 89
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Abrogating
Federal Law No. 18/1993 dated 07/09/1993
We, Mohammed bin Zayed Al Nahyan, President of the United Arab Emirates State,
After perusal of the Constitution;
Federal Law No. 1/1972 on Competencies of Ministries and Powers of Ministers, and its amendments;
Federal Law No. 18/1981 on the Regulation of Commercial Agencies, and its amendments;
Federal Law No. 26/1981 on the Commercial Maritime Law, and its amendments;
Civil Transactions Law promulgated by Federal Law No. 5/1985, and its amendments;
Federal Law No. 20/1991 on the Promulgation of the Law on Civil Aviation;
Federal Law No. 18/1993 on the Promulgation of the Commercial Transactions Law, and its amendments;
Federal Law No. 18/1995 on Simple Crafts;
Federal Law No. 4/2000 on UAE Securities & Commodities Authority and Market, and its amendments;
Federal Law No. 8/2004 on the Financial Free Zones;
Federal Law No. 17/2004 on Anti-Commercial Concealment;
Federal Law No. 6/2007 regulating Insurance Business, and its amendments;
Federal Law No. 2/2008 on the National Societies and Associations of Public Welfare, and its amendments;
Federal Law No. 6/2010 on Credit Transactions, and its amendments;
Federal Law No. 9/2011 on Land Transport, and its amendments;
Federal Law No. 4/2012 on the Regulation of Competition;
Federal Law No. 2/2014 on the Small and Medium Enterprises;
Federal Law No. 12/2014 on the Regulation of the Auditing Profession, and its amendments;
Federal Law No. 11/2015 Controlling Trading High-value Stones and Precious Metals and Stamping them;
Federal Decree-Law No. 9/2016 on Bankruptcy, and its amendments;
Federal Law No. 17/2016 on the establishment of Mediation and Conciliation Centres for Civil and Commercial Disputes, and
its amendments;
Federal Law No. 19/2016 on Commercial Fraud;
Federal Law No. 1/2017 on Anti-dumping and Compensatory and Countervailing Measures;
Federal Law No. 6/2018 on Arbitration;
Federal Law No. 8/2018 on Finance Lease;
Federal Law No. 10/2018 on Products Safety, and its amendments;
Federal Decree-Law No. 14/2018 on the Central Bank and the Regulation of Financial Institutions and Activities, and its
amendments;
Federal Decree-Law No. 20/2018 on Anti-Money Laundering Crimes and Combating the Financing of Terrorism and Financing
of Unlawful Organisations;
Federal Decree-Law No. 19/2019 on Insolvency;
Federal Law No. 4/2020 on Securing Interest with Movable Property;
Federal Law No. 15/2020 on Consumer Protection;
Federal Law No. 6/2021 on the Mediation for the Settlement of Civil and Commercial Disputes;
Federal Law No. 11/2021 on the Regulation and Protection of Industrial Property Rights;
Federal Decree-Law No. 31/2021 Promulgating the Crimes and Penalties Law, and its amendments;
Federal Decree-Law No. 32/2021 on Commercial Companies;
Federal Decree-Law No. 33/2021 on the Regulation of Employment Relationships, and its amendments;
Federal Decree-Law No. 36/2021 on Trademarks;
Federal Decree-Law No. 37/2021 on the Commercial Register;
Federal Decree-Law No. 38/2021 on Copyrights and Neighbouring Rights;
Federal Decree-Law No. 46/2021 on Electronic Transactions and Trust Services;
Federal Decree-Law No. 20/2022 on the Regulation of the Notary Public Profession;
Federal Decree-Law No. 21/2022 on the Regulation of Expertise before the Judicial Authorities;
Federal Decree-Law No. 32/2022 on the Federal Judicial Authority;
Federal Decree-Law No. 34/2022 on the Regulation of Advocacy and Legal Consultancy Professions;
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Federal Decree-Law No. 34/2022 on the Regulation of Advocacy and Legal Consultancy Professions;
Federal Decree-Law No. 35/2022 Promulgating the Law of Evidence in Civil and Commercial
Transactions;
Federal Decree-Law No. 38/2022 Promulgating the Criminal Procedure Law;
Federal Decree-Law No. 42/2022 Promulgating the Civil Procedure Law;
Based on the proposal of the Minister of Economy, and the approval of the Cabinet,
Have issued the following Decree-Law:
Article 1
The Commercial Transactions Law, attached hereto, shall enter into effect.
Article 2
1- Federal Law No. 18/1993 on the promulgation of the Commercial Transactions Law and its amendments shall be abrogated,
as well as any provision violating or contradicting the provisions of the Commercial Transactions Law attached hereto.
2- The regulations, decisions and rules issued in implementation to said Federal Law No. 18/1993 shall continue to be in force
without contradicting the provisions of the Commercial Transactions Law attached hereto, until issuance of the regulations
and decisions replacing the same.
Article 3
The Minister of Economy shall issue the necessary decisions to implement the Commercial Transactions Law attached hereto.
Article 4
This Decree-Law shall be published in the Official Gazette, and shall come into force from 2 January 2023.
Issued by us at the Presidential Palace - Abu Dhabi:
On: 07 Rabi' Al-Awwal 1444 H.
Corresponding to: 3 October 2022
Mohammed bin Zayed Al Nahyan
President of the United Arab Emirates
This law was published in the Official Gazette, Issue no. 737 (annex 2), dated 03/10/2022, p. 9.
Commercial Transactions Law

Preliminary Title
Article 1
The provisions of this Law shall apply to merchants, as well as to all real or virtual commercial activities that take place in
technical media or through modern technological means carried out by any person, even if he is not a merchant.
Article 2
1- Merchants and acts of commerce shall be governed by the agreement entered into by the contracting parties unless such
agreement contradicts an imperative commercial law provision.
2- In the absence of a specific agreement, the rules of commercial customary practice shall apply on all matters not provided
for in this Law or any other law governing commercial matters. Special or local customs shall have precedence over general
customs. The previous rules of transactions between the contracting parties shall be among the rules of private customs
applied in this case. In the absence of a commercial customary practice, the provisions governing civil matters shall apply to
the extent they are not inconsistent with the general principles of a commercial activity.
3- Private agreements between parties or commercial customary practice rules in violation to public orders or morals shall not
apply.
Article 3
Commercial matters regarding which specific Federal laws are issued shall be subject to the provisions of such laws, and to the
provisions hereof which do not contradict with said law.
Section 1 - Commerce in General

Title 1 - Acts of Commerce, Merchants and Commercial Books
Chapter 1 - Acts of Commerce
Article 4
Acts of commerce are:
1- Acts carried out by a merchant in relation with his trade. Unless otherwise established, every act performed by a
merchant shall be considered as related to his trade.
2- Speculative activities carried out by a person, though not a merchant, for the purpose of achieving a profit.
3- Acts considered by Law to be commercial.
4- Acts related to or facilitating an act of commerce.
Article 5
The following activities shall, by virtue of their nature, be considered as acts of commerce:
1- Purchase of tangible and intangible movables with the intention of selling same at a profit, whether sold in their
present condition or after their transformation or manufacturing.
2- Purchase or hiring other tangible and intangible movables with the intent of leasing them.
3- Sale or lease of movables purchased or leased as mentioned here above.
4- Banking, exchange and stock markets operations as well as those of investment companies, trust funds, financial
establishments and all kinds of other financial brokerage operations.
5- All kinds of transactions related to commercial papers, irrespective of the capacity of the concerned parties therein
or of the nature of the transactions for which such transactions are carried out.
6- All kinds of sea and air navigation activities, including:
a- The construction, sale, purchase, chartering or freighting, repair or maintenance of vessels and aircrafts, as
well as sea and air cargos including sea and air transport.
b- The sale and purchase of vessel and aircraft requirements, tools or materials or catering the same.
c- Loading and unloading operations.
d- Marine and aviation loans.
7- Acts of incorporation of commercial companies.
8- Current account.
9- All types of insurance.
10- Sale by public auction, with the exception of what is conducted by the judicial authority.
11- Hotels, restaurants, cinemas, theatres, playgrounds and amusement centres’ activities.
12- Water, electricity and gas production, sale, transport and distribution activities.
13- Issuing newspapers and magazines whenever the publication thereof is made with the intent of making profit
through the publishing of advertisements, news and articles.
14- Post and communications operations.
15- Radio and TV broadcasting activities as well as those of recording and photography studios.
16- The activities of public warehouses and mortgages on property deposited therein.
17- Virtual assets’ activities.
Article 6
The following activities shall be considered as an act of commerce if practised as a profession:
1- Brokerage.
2- Commercial agency.
3- Commission agency.
4- Commercial representation.
5- Supply contracts.
6- Purchase and sale of lands or real estates for the purpose of making profit from selling same in their original status
6- Purchase and sale of lands or real estates for the purpose of making profit from selling same in their original status
or after transforming or allotting them.
7- Land transport.
8- Real estate works whenever the contractor undertakes to supply the materials or the workers.
9- Extraction industries of natural resources.
10- Tourism, travel, export, import and customs clearing activities, as well as the activities of services and recruitment
offices.
11- Printing, publishing, photography, recording and advertising activities.
12- Manufacturing.
13- Activities relating to animal resources and fisheries.
14- Renting or leasing third parties’ work for the purpose of sub-leasing it.
15- Renting or leasing houses, apartments and rooms, furnished or unfurnished, for the purpose of sub-leasing same.
16- Creation, sale, lease and management of platforms, websites, smart applications, data, artificial intelligence and
other digital transformation businesses.
Article 7
Activities which may be deemed to be homogeneous to the activities herein provided for in the above two Articles, due to the
similarity of their characteristics and objectives shall be considered as an act of commerce.
Article 8
The following shall not be considered as an act of commerce:
1- The sale by a farmer of the produce obtained from land owned or cultivated by him, even when the said produce has
been transformed by means of tools he usually employs, unless this was exercised as a profession. Where a farmer
establishes a permanent trading shop or factory for the sale of his produce in its original condition or after
manufacturing the same, the sale in such a case shall be deemed to be an act of commerce.
2- Practising any activity related to agricultural tourism, whether with or without payment, including allowing others
to enter the farm, purchase and rent from the same, visit it or stay overnight in it for a short period, for the purpose of
viewing or enjoying agricultural activities, watching or purchasing animals, purchasing their products, learning,
training or other activities organised on the farm.
3- Work in which individuals rely on their physical or mental efforts to obtain a profit or financial consideration more
than their reliance on capital in cash.
4- An artist making a work of art himself or by employing workers and selling it, as well as the author publishing his
work and selling it.
Article 9
Where an act is commercial with regard to one party and civil to the other party, the provisions hereof shall apply to the
obligations of both parties unless the Law states otherwise or there is an agreement between the parties to the contrary.
Article 10
1- It shall be permissible to practice acts of commerce, establish or conclude commercial contracts, and carry out the
transactions referred to in the previous Article of this Law by implementing, providing, or issuing them, in whole or in part, in
real or virtual world through modern technology means or in technical media in accordance with the provisions of the
legislation regulating the same.
2- Providing services and conducting business and activities related to virtual assets shall be considered among the virtual acts
of commerce stipulated in this Article. The Cabinet shall issue legislation regulating virtual assets and their service providers.
3- The contracts and commercial transactions presented in technical media or through the means of modern technology shall
be subject to the same established provisions regarding similar activities provided in the real world.
Chapter 2 - The Merchant
Article 11
Shall be deemed a merchant:
1- Every person performing, in his own name and for his own account, acts of commerce while he has full capacity to
perform these acts as a profession.
2- Every company exercising a commercial activity or adopting one of the forms prescribed in the Commercial
Companies Law, even if such activity is a civil one.
Article 12
Any person who advertises to the public, by any means, that he has established a commercial place of business shall be
deemed a merchant even if he does not perform commerce as his usual profession.
Article 13
Commercial capacity shall be established in respect of every person performing trade as a profession, either under a
pseudonym or under the cover of another person's name, as well as in respect of the apparent person.
Article 14
Any person who carries out an act of commerce although prohibited under specific laws or regulations from practising trade,
shall be deemed a merchant and shall be governed by the provisions of the present Law.
Article 15
1- The following shall not have a commercial capacity:
a- Ministries, federal and local government entities.

b- Public welfare institutions, associations and clubs.
c- Self-employed persons not practising acts of commerce.
2- The acts of commerce carried out by the categories stated in Clause 1 shall be governed by the provisions of this Law unless
otherwise excluded by virtue of a specific text.
Article 16
Commercial capacity shall be established in respect of the following, unless otherwise excluded by a specific provision, and
shall be subject to the provisions of this Law:
1- Commercial companies established, owned, or contributed by the federal or local government, or an institution,
agency, authority, or subsidiary of any of them.
2- Branches of foreign companies that carry out acts of commerce in the State.
Article 17
Individuals who practice a simple craft or a small trade whereby they rely on their work to gain some profit in order to secure
their living rather than relying on cash capital, shall not be subject to the obligations incumbent on merchants relating to
keeping commercial books or registering in the Commercial Register nor shall they be governed by the provisions of
bankruptcy and composition. The Ministry of Commerce shall, in consultation with the competent authorities in the UAE,
determine the maximum number of individuals working with them and the capital to be invested in small trade.
Article 18
1- Any person who has attained (18) eighteen gregorian years of age and is free of any legal impediment shall be apt to carry
on acts of commerce.
2- A minor, whether under guardianship or custody, may practice acts of commerce whenever he attains (15) fifteen gregorian
years of age according to the rules and conditions issued by a Cabinet decision upon the proposal of the Minister of Economy.
Article 19
1- Where a minor under (18) eighteen gregorian years of age or a distrainee has funds invested in acts of commerce, the Court
may order the withdrawal of these funds or approve the investment, as may best serve his interests.
2- In case the Court issues an order to continue the acts of commerce, it shall grant the person acting for him an absolute or
restricted authority to perform all activities required for this purpose.
3- The Court may withdraw or limit the authority if there are reasons justifying this measure provided it does not prejudice any
rights acquired by a bona fide third party.
Article 20
1- Any order issued by the Court to continue with the business of the minor under (18) eighteen gregorian years of age or the
distrainee, or to withdraw or limit the authority, shall be notified to the competent entities to register the same in the
Commercial Register. It shall also be published according to the legislation in force in the State.
2- If the Court orders the continuance of the business of the minor under (18) eighteen gregorian years of age or the
distrainee, his liability shall be limited to the extent of the funds invested in such acts of commerce.
3- Taking into consideration Clause (2) of this Article, the relevant legislation shall regulate the adjudication of bankruptcy of
a minor, and the conditions and effects thereof.
Article 21
Taking into consideration Article (22) of this Law, the same provisions prescribed for female nationals who practice acts of
commerce shall apply to a foreign woman’s profession of trade and her acquisition of the capacity of a merchant, and the
effects thereof, including the provisions related to the independence and separation of financial liability from the husband.
Article 22
Non-nationals of the State may practice acts of commerce in it in accordance with the conditions and rules and within the
limits and cases for which a decision is issued by the Cabinet based on the proposal of the Minister of Economy.
Article 23
1- The following persons may not practice acts of commerce:
a- Every merchant who is declared bankrupt unless he has been rehabilitated.

b- Every person not permitted to practice acts of commerce by virtue of the laws in force in the State.
c- Any person who has been condemned for a crime of fraudulent bankruptcy, commercial fraud, theft, fraudulent
misrepresentation, breach of trust, forgery or use of forged papers, unless he was rehabilitated.
2- Any person who violates the prohibition provided for in Clause (1) of this Article shall be sentenced to a fine of at least AED
10,000 (Dirhams ten thousand) and not exceeding AED 200,000 (Dirhams two hundred thousand), in addition to have the
business concern closed in all cases.
Article 24
1- The merchant's transactions related to his trade shall not be accepted by any of the competent authorities unless his name
is recorded in the Commercial Register.
2- The merchant who carries out his acts of commerce in the technical media or through the means of modern technology
shall meet the requirements of the competent authorities regarding registration in the Commercial Register.
Chapter 3 - Commercial Books
Article 25
1- The merchant shall keep the (regular or electronic) commercial books in such manner as to show his financial status with
accuracy as well as all rights and liabilities he might have related to his trade.
2- The merchant carrying out real trade shall keep the following two books:
a- Journal.
b- General ledger.
3- The merchant carrying out virtual trade shall:
a- Record the data of the electronic commercial books through the computer or other modern technology devices.
b- Abide by the decisions issued by the Minister of Economy to specify the controls and standards for such data and
electronic books.
4- The merchant shall be responsible for the validity of the accounting data recorded in the commercial books, and in a
manner that actually matches the documents and information kept in the paper files and financial statements of the
establishment.
5- In all cases, the commercial books shall follow the specified standards regarding accounting standards and restrictions.
Article 26
1- All the financial operations carried out by the merchant as well as his personal withdrawals shall be entered into the journal
day by day.
2- The merchant may use auxiliary journals to prove the details of his commercial operations, in which case it shall be
sufficient that he makes a global entry of such operations in the journal at regular intervals, otherwise each auxiliary book
shall be deemed a journal.
Article 27
The following shall be entered in the General Ledger:
1- All accounting operations carried forward from the journal based on the corroborating documents and in particular
the accounts related to the cash in hand, bank, partners, creditors, debtors, revenues, withdrawals and expenditures.
2- Details of the stocks available to the merchant at the end of the fiscal year or a global statement thereof if the
particulars are shown in separate books or lists, in which case such books and lists shall be considered as
complementing the General Ledger.
3- A copy of the annual balance sheet and the profit and loss account.
Article 28
1- The commercial books shall not contain any blank spaces, deletion, erasure, writing in the margins, scrapping-off or
insertion.
2- Prior to the use of the journal and the General Ledger, the pages thereof shall be numbered and signed by the Commercial
Registry office, to which the merchant belongs, and stamped with the official seal of the said Authority, showing the date of
such procedure. Should the pages of any of the said two books be filled up, the merchant shall submit it to the same Authority
to have it marked up to this effect after the last entry made therein and before using the new book.
3- In case of discontinuation of the activities in the business concern, the merchant or his heirs shall submit the said two
books to the Commercial Register Office to have them marked up to this effect.
4- Stamping with the official seal and the marking up shall, in the above-mentioned instances, be free of charge.
Article 29
1- The merchant shall keep a true copy of the originals of the correspondences, telegrams and invoices sent or issued by him
for the purpose of his commercial activities. He shall, in addition, keep all incoming correspondences, telegrams, invoices and
other documents related to his trade. All such papers shall be kept in an orderly manner that facilitates their review and for a
minimum period of five (5) years from the date of issue or receipt thereof.
2- The merchant or his heirs shall keep the commercial books and the documents supporting the entries made therein for a
minimum period of five (5) years with effect from the date of marking up the book that it is out of use.
3- With regard to keeping a true copy of the papers, books and documents referred to in the two previous Clauses of this
Article, if the saving mechanism is carried out through modern technology means, the controls specified in this regard by the
concerned authorities shall be followed in order to achieve the reliability and availability of data and information.
Article 30
1- The banks, companies or establishments specified in a decision taken by the concerned authority according to the
legislation in force in the State after coordination with the Minister of Economy, may keep, for the period mentioned in Article
(29) of this Law, a copy of the works’ records, commercial books and accounts through modern technology means instead of
the original books, documents, correspondences, telegrams and other papers related to their financial and commercial
activities.
2- The copies, works’ records, accounts and data stated therein saved through modern technology means stipulated in this
Article shall have the same evidential value as the similar documents saved physically, provided that the technology rules
specified by the concerned authorities and that the said banks, companies and establishments shall have to comply with, are
achieved.
Article 31
Records and facts made in the commercial books by employees authorised by the merchant shall be deemed as records made
by the merchant himself, and it shall be assumed that such records were made with his knowledge and consent until he
submits proof to the contrary.
Article 32
The court may, sua sponte or at the request of one of the litigants, order the merchant to submit his commercial books to
extract therefrom what is of relevance to the conflict submitted to it. The said court shall peruse these books, personally or
through an expert appointed by it to this effect.
Article 33
1- The court may not order the merchant to submit his commercial books for the perusal of his opponent unless the litigation
submitted is related to an estate, a partnership or the division of joint property to both of them.
2- In case of bankruptcy or preventive composition, the commercial books shall be handed over to the competent court, the
receiver in bankruptcy or to the composition controller.
Article 34
The commercial books kept by the merchant may be used as evidence in the lawsuits lodged by or against them should they be
related to their commercial activities according to the following rules:
1- The data entered in the commercial books - even if not regular according to the provisions of the Law - shall
constitute evidence against the owner of these books. However, a person wishing to extract therefrom any evidence in
his favour may not fractionalise the data entered therein.
2- The data duly entered in the commercial books according to the provisions of the Law shall constitute evidence in
favour of the owner of these books against his opponent merchant, unless they are challenged by the latter on account
of data duly entered in his books according to the provisions of the Law or by any other means proving that they are
not true.
3- In the event where both litigants' books are regularly kept according to the provisions of the Law and the
comparison made between them shows a contradiction in the data entered therein, the court shall request another
evidence.
4- In case of discrepancy in the data entered in both litigants' books, while the books of one of them are regularly kept
according to the provisions of the Law and the other merchant's books are not, the data entered in the regular books
shall prevail, unless the opponent submits proof to the contrary. The same provision shall apply if one of the litigants
submits regular books and the other does not submit any.
Article 35
Should one of the two merchant litigants rely for the validity of his lawsuit on the other opponent's commercial books, and
should he admit in advance the correctness of the data entered therein while the former refrains without justification from
submitting such books to the court for perusal; this shall be deemed a presumption that the facts required to be proved in the
books are correct. The Court may further tender the suppletory oath to the Plaintiff as to the validity of his lawsuit.
Title 2 - Business Concern, Trade Name, Unfair Competition, Trademarks and Descriptions
Chapter 1 - Business Concern, Trade Name and Unfair Competition
Section 1 - Business Concern
Article 36
A business concern is a group of tangible and intangible assets allocated for the practice of real or virtual acts of commerce,
whether in technical media, through the means of modern technology, or through traditional means.
Article 37
1- The business concern shall include all elements necessary to perform acts of commerce. Such elements are divided into
tangible elements such as the goods, equipment, machines and tools, and intangible elements such as the customer contacts,
goodwill, trade name, right to let, industrial, literary and artistic property rights and licences.
2- The tangible elements shall not be considered essential to the business concern, contrary to the intangible elements since
the existence of the concern depends on the presence of one or more of these elements.
Article 38
In the event where the merchant is the owner of the real estate in which he practices his trade, such estate shall not constitute
an element of the business concern. Any provision to the contrary shall not be taken into consideration.
Article 39
Any transaction aiming at the transfer of ownership of a business concern or at the creation of a real right thereon, shall be
notarised or authenticated by a Notary Public according to the procedures specified by the competent authority and registered
in the Commercial Register, otherwise it shall be null and void. Such transaction shall include the following data:
1- Names of the contracting parties, their nationalities and places of residence.

2- Date and type of the transaction.
3- Type and address of the business concern and those elements agreed to be included in the transaction.
4- Price of the tangible and intangible elements separately, if the transaction is a sale, the portion of the price paid
upon conclusion of the contract and the mode of payment of the rest.
5- Specific conditions as stated in the contracts and undertakings, if any, pertaining to the business concern.
6- Conditions, if any, reserving to the seller the right of rescission or cancellation or the institution of a preferential
right, if any.
Article 40
1- Transfer of ownership of the business concern shall only take place, between the contracting parties and third persons, as of
the date of recording the transaction in the Commercial Register and the publication of its summary according to the
procedures and periods stipulated in the legislation in force in the State.
2- In case the business concern comprises elements subject to a special scheme of advertising or registration, and unless
otherwise provided by law, advertisement made for the disposal of the store shall not replace the special advertisement or
registration.
Article 41
The disposal of the business concern shall only be recorded after completion of the following procedures:
1- The employee in charge at the Commercial Register shall, at the request and expense of the purchaser, publish a
summary of the sale contract according to the procedures and periods stipulated in the legislation in force in the State.
2- The summary published shall include the names of the contracting parties, their nationalities and places of
residence, designation of the business concern, total price and an authorisation to the creditors to submit their
objections within ten (10) days from the date of the last publication.
3- Oppositions shall be lodged with the competent civil court in which jurisdiction the business concern is located and
they shall include the amount of the debt and its cause.
4- The purchaser shall refrain from paying the price until the court decides on the oppositions. The seller may request
from the magistrate of summary justice an authorisation to cash the price even prior to the examination of the
oppositions should he provide sufficient guarantees for settlement of the creditors' rights.
5- Any opposing creditor or mortgagee creditor may offer to purchase the concern for himself or for the account of a
third party for a price that exceeds the price agreed upon by at least one fifth.
6- The party opposed to the price shall deposit with the court treasury a sum equal to at least one third of the original
price in addition to the increase offered by him.
7- The competent court shall notify the biddings to the two parties to the sale agreement of the business concern.
Twenty (20) days after such notification, the court shall decide the sale of the concern to the bidder having offered the
highest price.
Article 42
1- Any person to whom the ownership of the business concern shall pass, shall replace, ipso jure, the disposing person in all
the rights and obligations arising from the contracts related to the business concern, unless otherwise agreed upon or if the
contract is based on personal considerations.
2- The second party to the contracts referred to in Clause (1) of this Article may, within ninety (90) days from the date of
notification of the disposal, request the cancellation of these contracts provided he has serious reasons to justify such
cancellation and provided that he notifies the new owner, within an adequate period, of his wish thereto.
Article 43
1- The person to whom the ownership of the business concern has passed, shall fix a date for the creditors, whose debts
precede the date of the transaction, to submit a statement of their debts in order to settle them. Such date shall be published
according to the procedures and periods stipulated in the legislation in force in the State. The date fixed to the creditors may
not be less than ninety (90) days from the date of publication.
2- The new owner of the business concern shall be liable for the debts whose owners have submitted a statement thereof
within the stated period, if they have not been settled within the said period.
3- The new owner of the business concern shall be discharged of the debts whose owners did not submit a statement in their
respect within the period as fixed in the preceding Clause.
4- The disposing party shall remain liable for the debts, related to the business concern, which have arisen prior to the
publication of the disposal unless he is discharged thereof by the creditors.
Article 44
As an exception to the bankruptcy provisions, the seller of a business concern, who did not receive the full price, may invoke,
against the body of creditors in the purchaser's bankruptcy, his right to rescind the sale contract of the concern and recover it
or his right of privilege, if he reserved for himself such right in the sale contract and mentioned it in the published contract
abstract. Such rescission, termination or privilege shall only include the elements covered thereby.
Article 45
1- The business concern may only be pledged to banks and financing institutions.
2- Where the pledge deed does not specify the elements covered by the pledge, it shall then only cover the trade name, the
right to let, the customers' contacts and the goodwill.
Article 46
1- A pledge shall not be considered completed unless by a contract authenticated or attested by a Notary Public and registered
in the Commercial Register.
2- The pledge contract shall contain a permit by the debtor as to whether or not the seller has a privilege over the pledged
business concern, as well as the name of the insurance company which insured the concern, if any.
Article 47
1- Entry in the Commercial Register shall secure a privilege right for five (5) years from the date thereof. If the entry is not
renewed within the said time limit, it shall be deemed to have been cancelled.
2- The said entry may be written off by mutual agreement of the concerned parties or pursuant to a final court order.
Article 48
The mortgagor shall be held responsible to keep the pledged business concern in good condition.
Article 49
1- Where the owner of the business concern fails to pay the price or the rest thereof to the seller, or if he fails to pay the debt
on the maturity date to the mortgagee creditor, the seller or the mortgagee creditor may, after eight (8) days from the date of
service of a notice on his debtor, who is in possession of the business concern, submit a petition to the magistrate of summary
justice, requesting permission to sell, by public auction all or some of the constituent elements of the concern which are
included in the seller's or mortgagee creditor's privilege.
2- The sale shall take place at the venue, date and hour and according to the manner designated by the judge and it shall be
published according to the procedures and periods stipulated in the legislation in force in the State.
Article 50
Shall be considered null and void, any provision in the mortgage contract granting the creditor the right to acquire the
property of the pledged business concern or to dispose thereof without following the procedures prescribed in Article (49) of
this Law, unless another legislation stipulates otherwise.
Article 51
The seller, as well as the mortgagee creditors, shall have over the sums resulting from the insurance, in case they are overdue,
the same rights and privileges as those which they had over the insured items.
Article 52
The lessor of the place wherein lies the pledged furniture and equipment which are used for exploiting the concern, may not
exercise his privilege over more than the rent of two years.
Section 2 - Trade Name
Article 53
Taking into consideration the provisions and conditions set forth in the legislation regulating the protection of the intellectual
property rights, the trade name of an individual merchant shall consist of his first name and surname; it may also contain
particulars pertaining to the persons therein mentioned, relevant to the type of trade for which it is designated. It may also
consist of an innovated nomenclature. In all cases, the trade name shall be conformant to the truth, or else it would be
misleading or prejudicial to public policy or morals.
Article 54
Trade names of commercial companies shall be governed by the provisions prescribed in the legislation in force in the State.
Article 55
Taking into consideration the provisions and conditions set forth in the legislation regulating the protection of the intellectual
property rights, a trade name shall be recorded in the Commercial Register in accordance with the provisions prescribed in this
regard. Once registered, no other merchant may use such name for his trade of a similar type of trade. Where the name and
surname of a merchant are similar to a trade name previously recorded in the Register, he shall add to his name such
particulars as would distinguish it from the trade name already registered.
Article 56
1- The merchant shall write his trade name on the façade of his real or virtual business concern, and he shall carry out his
commercial transactions under his trade name.
2- A merchant may not use the trade name of another merchant after disuse or removal of such name, except after the lapse of
one year from the date of such disuse or removal.
Article 57
1- A trade name may not be disposed of independently from the business concern to which it is allocated, unless another
legislation stipulates otherwise.
2- Should, however, the owner of the business concern dispose of it, such disposal shall not include the trade name, unless
such inclusion is explicitly or impliedly provided for.
3- In the absence of an agreement to the contrary recorded in the Commercial Register, the person upon whom the ownership
of the business concern devolves, without its trade name, shall not be liable for the obligations of his predecessor.
Article 58
1- A person to whom the ownership of a business concern is transferred, may not use his predecessor's trade name, unless
such name devolves unto him or the predecessor authorises him to use it, provided that he adds to the name such particulars
indicating the transfer of ownership.
2- Whoever violates the provisions of Clause (1) of this Article shall be sanctioned to a minimum fine of (Dhs 10,000) Ten
Thousand Dirhams.
Article 59
1- Any person to whom the ownership of a trade name is transferred, as a result of the transfer of ownership of a business
concern, shall succeed to his predecessor in the rights and obligations accrued under the said trade name. Any agreement to
the contrary does not bind third parties except from the date of its entry in the Commercial Register and notice served to the
concerned parties to this effect, unless stipulated otherwise in any other legislation.
2- The action in liability on account of the predecessor's obligations, shall not be heard upon denial and lack of a legitimate
excuse, after the lapse of five (5) years from the date on which the transfer of ownership of the business concern occurred.
Section 3 - Unfair Competition
Article 60
The following rules shall apply with regard to unfair competition, unless stipulated otherwise in any specific legislation.
Article 61
A merchant may not induce the employees or workers of another competitor merchant, so that they assist him in usurping the
customers of that other merchant, or so that they leave their employer's service and enter into his service or disclose to him
the secrets of his competitor. These acts are considered as unfair competition requiring compensation.
Article 62
A merchant may not propagate such matters as are inconsistent with reality regarding the origin or description of his goods, or
any other matters pertaining to their nature or importance. Likewise, he may not declare falsely that he holds a rank, degree or
award, nor may he resort to any other misleading means, with the intent to usurp the customers of a competitor merchant; or
else, he shall be liable for compensation.
Article 63
A merchant may not resort to fraud and deceit when marketing his goods, nor may he propagate or publish false information
tending to be prejudicial to the interests of another competitor merchant, otherwise he shall be liable for compensation.
Article 64
A merchant may not issue to one of his ex-employees or ex-workers a certificate that is inconsistent with reality, otherwise he
shall be liable to compensate the prejudice caused to any other merchant who was mislead by such certificate.
Article 65
1- Where a merchant uses the trade name of others without any agreement authorising him to do so, or where the owner uses
it in a manner violating the Law, the concerned parties may ask the competent court to order the prohibition of its use and to
strike it off if it is entered in the Commercial Register, without prejudice to their right to compensation, when necessary.
2- Whoever violates the provisions of Clause (1) of this Article shall be sanctioned to a minimum fine of (Dhs 10,000) Ten
Thousand Dirhams.
Article 66
Any person engaged in the business of supplying information to commercial houses about the conditions of trade, who
knowingly or through gross negligence supplies misleading information about the conduct or financial position of a merchant,
shall be liable for compensation for the damage resulting therefrom.
Article 67
The foregoing provisions shall not prejudice any other penalties stipulated in other laws concerning the perpetration of acts
specified therein.
Chapter 2 - Trademarks and Descriptions
Article 68
Trademarks and descriptions shall be regulated by the specific laws issued to this effect.
Section 2 - Commercial Obligations and Contracts

Title 1 - Commercial Obligations
Article 69
1- Unless otherwise provided for by law or agreement, where two individuals or more assume a commercial debt, they shall be
jointly liable for its settlement.
2- The provisions of Clause (1) of this Article shall also apply in cases where there are several sureties in a commercial debt.
The sureties shall be jointly liable with each other and with the debtor.
Article 70
A suretyship shall be commercial if the surety has guaranteed a debt which is deemed with regard to the debtor to be
commercial unless otherwise provided for by law or agreement, or if the surety is a merchant and has an interest in
guaranteeing the debt.
Article 71
Unless otherwise established, where a merchant carries out for a third party, such business or services as are related to his
commercial activities, he is deemed to have done so in return of a consideration to be determined according to the customs
and in the absence of such customs, it shall be determined by the court.
Article 72
A creditor shall be entitled to receive interest on a commercial loan as per the rate of interest stipulated in the contract. If the
interest rate is not stated in the contract, it shall be calculated according to the current interest rate in the market at the time
of dealing, provided that it shall not exceed (9%) annually until full settlement.
Article 73
Where the contract stipulates the interest rate and the debtor delays payment, the interest on the arrears shall be calculated
on basis of the agreed rate until full settlement.
Article 74
Unless otherwise followed by a commercial customary practice or bank practice, interest shall be paid at the end of the year, if
the term of the loan is for one or more years, or on the maturity date of the debt, if the loan period is less than one year.
Article 75
Unless agreed to the contrary, if the loan is for a specified term, the creditor shall not be bound to accept payment before the
due date, unless the debtor pays the interest accruing for the remaining period of the term.
Article 76
Orders and authorisations issued by a merchant for matters related to his commercial activities shall not lapse upon his death,
nevertheless, his heirs may cancel them if they decide not to proceed with the commercial activities. In such event, they shall
not be liable to pay any compensation if they notify, in due time, the party who contracted with the testator of their intention
to do so.
Article 77
1- Where the commercial obligation is the delivery of a certain thing within a specific season or a time of the year, the
agreement between the parties shall be consulted in order to fix the time for delivery. In the absence of such agreement, the
custom prevailing in the country where the delivery is to take place shall be followed.
2- The custom prevailing in the country, where the contract was concluded shall be followed as to the method of measuring,
weighing or counting the goods.
Article 78
Unless otherwise agreed, a creditor may not be compelled to accept performance of a contract should the debtor fail to meet
his obligation prior to the expiry of the period fixed for performance.
Article 79
Where the due date of a debt is deferred and the debtor offers to settle it in advance, he may not, upon payment, deduct a part
of it except with the creditor's consent, unless there is a provision in the agreement or the law to the contrary.
Article 80
Where one of the contracting parties reserves the right to rescind the contract prior to its execution, he shall forfeit his right to
rescission if he performs his obligations under the contract or if he consents to the other party's performance of his obligations.
Article 81
Warnings and notifications in commercial matters shall be made through the notary public, by registered letter with
acknowledgement of receipt, by any electronic means or a modern technology means specified by a decision of the Minister of
Justice, or by any means agreed upon by both parties.
Article 82
Courts may not grant the debtor in a commercial obligation a respite for payment nor order to pay it by instalments except
with the creditor’s consent or under general exceptional circumstances.
Article 83
Where the debtor settles a commercial debt to the person holding the instrument of such debt marked with acquittal or to the
person holding a quittance from the creditor, he shall be discharged from the debt.
Article 84
Unless otherwise agreed, where the commercial obligation is a sum of money, the amount of which was known when the
obligation arose, and the debtor delays payment thereof, he shall be held liable to pay to the creditor, as compensation for the
delay, the interest stated in Articles (72) and (73).
Article 85
Accrual of interest on arrears shall not be conditioned upon the creditor proving that he sustained damages as a result of such
delay.
Article 86
Interests on arrears for delay of payment of commercial debts shall be due upon maturity, unless otherwise provided in the law
or in an agreement.
Article 87
1- A creditor may claim supplementary compensation, to be added to the interest on arrears if he proves that the prejudice in
excess of said interest was caused by the debtor's fraudulent conduct or gross fault.
2- If the creditor, in claiming his right, causes, in bad faith, the persistence of the dispute, the court may reduce the interest or
it may not award any interest at all for the period of the unjustified prolongation.
Article 88
The creditor may not claim compound interest - which is interest on compounded interests - or claim those interests as
supplementary compensation.
Article 89
1- Any instrument for the payment of a sum of money or the delivery of goods, may be negotiated by way of endorsement if
payable to the order of the creditor or by delivering it, if payable to bearer.
2- Endorsement or handling shall result in the transfer of all rights arising from the instrument to the endorsee or the new
bearer.
3- In case of endorsement, the endorser shall guarantee payment of the right established by the deed on maturity date, unless
it is agreed in the endorsement wording to restrict the guarantee to the existence of the right at the time of endorsement.
4- Unless otherwise agreed in the wording of the endorsement, should the instrument be drawn-up on account of a
commercial transaction, the signatories thereto shall be jointly liable.
5- In all cases, the debtor may not oppose to the bearer the pleas based on the personal relationship between him and the
author of the instrument or the previous holders thereof unless the bearer had the intention, upon receiving the instrument,
to harm the debtor or if the plea concerns the lack of capacity of the debtor.
6- The debtor may also refrain from paying the value of the instrument if it is not delivered to him marked with discharge.
Article 90
The possession by the debtor of the debt instrument constitutes a presumption that he has been discharged of the debt, until
otherwise established.
Article 91
Unless otherwise provided by law or stipulated in the agreement, commercial obligations of any amount whatsoever may be
evidenced by all means of proof.
Article 92
Lawsuits concerning commercial obligations between merchants shall not be heard upon denial or lack of legal justification,
after the expiry of (5) five years as of the date on which the obligation is to be met, unless the law specifies a shorter limitation
period.
Title 2 - Commercial Sale
Chapter 1 - General Provisions
Article 93
1- Unless otherwise provided, the general provisions stipulated in this Chapter shall only apply to commercial sales.
2- The sale shall be considered commercial according to the provisions of this Chapter if it is between merchants and for
matters related to trade.
Article 94
1- The contracting parties shall specify the following in the commercial sale contract:
a- Description of the sale in a specific and thorough manner.

b- Determining the price of the sale and the conditions of payment thereof.
c- Place and date of delivery.
d- The notification mechanism and the address chosen in this regard.
e- Mechanism for settling disputes.
f- Any other conditions and provisions agreed upon between the parties.
2- Where both contracting parties fail to fix the price, the sale shall be concluded at the price followed in their dealings, and in
the absence of previous dealings between them, the prevailing price in the market, unless the circumstances of the case reveal
the necessity of adopting a different price.
Article 95
Where both contracting parties agree that the sale price shall be at the market rate, then the price shall be determined at this
rate at the time and place of conclusion of the contract, unless otherwise stipulated in the agreement. In case several market
prices are followed then the average price shall prevail.
Article 96
Both contracting parties may agree to delegate a third party to fix the price of the item object of the sale. However, if such
party fails to fix the price within the prescribed term or, in the absence of such term, within an adequate period, then the
current market price at the time and place of conclusion of the contract shall be adopted.
Article 97
Where the price is estimated on basis of weight, the net weight shall be considered, unless there is an agreement or custom to
the contrary.
Article 98
1- Where it is agreed by both contracting parties that the purchaser shall determine the shape, volume or any other
distinguishing feature of the item object of the sale, the purchaser shall do so within the agreed period, or within an adequate
time if no fixed period has been agreed upon.
2- If the time limit stated in Clause (1) of this Article has lapsed and the purchaser did not determine the features of the item
sold, the seller shall have an option to ask for the rescission of the contract with compensation, or to determine himself the
said features and notify the purchaser thereof. This determination shall be deemed final if the purchaser does not object
thereto within ten (10) days from his notification.
Article 99
1- If no specific time for delivery has been determined, it shall take place upon conclusion of the contract unless the nature of
the object sold necessitates delivery at a different time.
2- Where it is agreed that the purchaser shall fix the date of delivery of the sold item, the seller shall be bound to deliver it on
such date, with due consideration as to the period required for its preparation and to the nature of such item.
Article 100
1- Until the effective or legal delivery to the purchaser of the sold item, the consequences of its perishability shall be borne by
the seller.
2- Unless otherwise agreed, where the seller, at the request of the purchaser, sends the item object of the sale to other than the
designated venue for delivery, the consequences of its perishability shall be borne by the purchaser from the date of delivering
the item sold to the carrier.
3- Should the seller fail, without pressing necessity, to comply with the instructions of the purchaser regarding the method of
transport, he shall be liable for the damages occurring to the item sold on account of such failure.
4- The purchaser shall, unless otherwise agreed, bear the expenses incurred in delivering the sold item in other than the place
designated for delivery.
Article 101
Any shortage occurring to the sold item upon its delivery shall not be taken into consideration if custom allows such shortage.
Article 102
1- Where the seller fails to deliver the specific item sold, the purchaser may summon the seller to perform within an adequate
period. In case the seller fails to comply, the purchaser shall have an option either to ask the court to force the seller to
execute in kind by delivering to him the sold item- if possible- with payment of compensation when necessitated, or to
consider the contract rescinded and claim compensation, if justified, or to buy at vendor's expense an object similar to the
item sold and claim the difference between the price agreed upon and the price paid by him in good faith to obtain such object.
Where the sale relates to an item having a known price in the market, the purchaser may claim from the seller the difference
between the price agreed and the market price on the date fixed for delivery, even though he did not buy an object similar to
the item sold.
2- The seller shall bear the transport fees in the event of return or exchange of the sold item whenever the reason for return or
exchange is due to him, unless otherwise agreed.
Article 103
Where both contracting parties agree that the sold item be the object of successive deliveries, the purchaser may ask for the
rescission of the contract if the seller fails to perform any of these deliveries on the fixed date. However, such rescission shall
not apply to the deliveries already executed, except where the purchaser sustains serious prejudice due to the fractioning of
the item sold.
Article 104
Should the purchaser fail to pay the price on the date agreed upon, the seller, after serving notice to the purchaser, may resell
the goods. If the goods are sold in good faith at a price less than the price agreed upon, the seller shall be entitled to claim
from the purchaser the difference in price. Furthermore, if the goods have a known price in the market, the seller may claim
from the purchaser the difference between the price agreed upon and the market price on the date fixed for payment, even
though the sale did not effectively take place.
Article 105
1- The purchaser, who has paid the price in full, may ask the seller to give him a table of goods on which it is mentioned that
the price has been paid.
2- Any person, having accepted, expressly or implicitly, a list of the sold goods, shall be deemed as having agreed to its
contents. Where the person receiving the list, does not object to its contents within eight (8) days from the date of receipt, this
shall be considered as an implicit acceptance, unless a longer period has been agreed upon.
Article 106
1- Where the purchaser refuses to take delivery of the item sold, the seller may ask the court to establish this fact and grant
him permission to sell same under the court supervision after the lapse of a period fixed by it and notified to the purchaser.
However, the court may order that highly perishable items be sold without fixing a delay and without notice.
2- The proceeds of sale shall be deposited with the treasury of the court, after deducting all the expenses incurred by the seller
in order to settle the dispute between him and the purchaser.
Article 107
1- If it is noticed after delivery of the sold object that the goods delivered are different, in quantity or type, or if they are
defective, rescission shall not be granted to the purchaser unless it results, from such difference or defect, the unsuitability of
the goods sold for the purpose for which they were to be used, or if they become difficult to be marketed. The court, upon
rejecting the request for rescission of the contract, may decide to reduce or complete the price, depending on the deficiency or
excess in quantity, the discrepancy in type or the degree of defect. This shall be so unless there is an agreement or custom
imposing rescission.
2- Clause (1) of this Article shall not prejudice the provisions prescribed for the protection of the consumer’s rights stated in
the legislation in force in the State.
Article 108
1- In the instances referred to in Article (107) of this Law, the purchaser shall notify the seller of the difference or defect,
within fifteen (15) days of the date on which the item sold is effectively delivered to him, and he shall file the action for
rescission or reduction of the price within sixty (60) days of such delivery date. However, if the defect is concealed and cannot
be detected by ordinary examination, the purchaser shall then notify the seller immediately when he discovers it, and lodge
the action in warranty of the defect within six (6) months of the date of actual delivery, unless there is an agreement to the
contrary.
2- Should the purchaser fail to notify the seller of the existence of a difference or defect, or if he does not file the action for
rescission, price reduction or defect warranty within the periods mentioned in Clause (1) of this Article, as the case may be, his
action shall not be heard upon denial or lack of legitimate excuse. However, if the purchaser proves fraud on the seller's part,
the lawsuit shall not be accepted if lodged after the lapse of one year from the delivery date.
3- The action instituted by the seller to complete the price due to increase in quantity or in the quality level, shall not be
admitted after the lapse of sixty (60) days as of the date of actual delivery of the item sold.
4- Agreement may be reached as to exempting the purchaser from abiding by the periods prescribed in this Article or allowing
the amendment of such periods.
Article 109
1- Where the item sold is a commodity protected by a registered trademark, agreement may be reached in order to compel the
purchaser not to resell it below a specific price.
2- The court may order the non-compliance with this condition if it considers that the commodity sold to be among the
necessities.
3- The purchaser's successors shall not be bound to observe the above condition, except if they had knowledge or could have
known about it.
Article 110
1- In supply contracts where the supplier grants certain advantages to the purchaser, the latter may not be prohibited to buy
similar goods as the item sold from another supplier during a period exceeding five (5) years from the date of agreement. Any
agreement on a longer period shall be reduced to five (5) years.
2- The provisions of Clause (1) of this Article shall apply in a manner that does not conflict with the provisions regulating
competition stipulated in the special legislation in the State.
Chapter 2 - Certain Types of Commercial Sales
Section 1 - Sale by Instalment
Article 111
The contract of sale by instalment shall be made in two copies and shall state the specifications, which identify and determine
the item sold, as well as the price amount, the period and conditions of payment by instalments. The seller shall hand over to
the purchaser one of the copies of the said contract.
Article 112
The instalments shall be paid at the place of residence of the seller, as stated in the contract, unless otherwise agreed upon.
Where the instalments are collected from the purchaser's place of residence, the purchaser may not charge additional
expenses. The discharge given for any instalment paid shall be considered a discharge of any preceding instalments unless
there is evidence to the contrary.
Article 113
1- Where the purchaser fails to pay any instalment of the agreed price, the seller, after notifying him, may claim rescission
with compensation if justified. However, if it is revealed to the court that the purchaser has fulfilled the largest part of his
obligation, it may grant him a respite for payment and dismiss the claim of rescission if he effects payment within the
prescribed period.
2- In case a judgement in rescission is rendered, the purchaser shall have to give back the item sold to the seller. In return, the
seller shall repay to the purchaser the instalments received after deducting an amount equivalent to the cost of usufruct
thereof and another amount to compensate for the depletion occurring to the object of the sale due to abnormal use, provided
there is no provision to the contrary in the sale agreement and further provided that the total sum paid to the purchaser does
not exceed the original price with interests.
Article 114
Any clause in the agreement providing that the full price shall be payable immediately in case one of the instalments is not
paid on its maturity date, shall only be valid if the purchaser fails to pay despite the notice served upon him and after the lapse
of seven (7) days from the date of this notification.
Article 115
1- Should the seller retain title to the sold movable property until payment of the full price instalments, the purchaser shall
acquire ownership thereto upon payment of the last instalment. As of the date of taking delivery of the sold object, the
purchaser shall bear the consequences of its deterioration.
2- Without prejudice to the provisions stipulated under the Bankruptcy Law, the condition related to the retention of
ownership may not apply to a third party unless it is included in a written agreement prior to the acquisition of his right.
Article 116
Where the third party's right is subsequent to the contract of sale by instalment, the provision related to the retention of
ownership may apply to such third party, if the said provision is written in an agreement having a fixed legal date prior to the
commencement of the execution proceedings undertaken by the creditors on the item sold.
Article 117
A purchaser may not dispose of the item sold before he has paid all instalments, save where the seller agrees to this in writing.
Any disposal by the purchaser in violation of this provision, shall not bind the seller, unless the third party proves his good
faith, in which case the remaining instalments shall fall due.
Article 118
The provisions of the preceding Articles regarding sale by instalments, shall apply even if the contracting parties have
characterised the sale as a lease.
Section 2 - Optional Public Auction Sale of Movables
Article 119
1- The provisions of this Section shall apply to optional sales by public auction of movables.
2- Public auction sale shall mean any sale which any person may attend even if bidding is restricted to a specific group of
persons.
3- Movables shall mean all movable properties the possession of which was transferred through any of property acquisition
modes.
Article 120
1- Without prejudice to the provisions of the Civil Procedure Law and the laws organising certain kinds of sales, the movables
referred to in Article (119) of this Law may not be sold by auction except through an expert auctioneer in a hall, electronic
platform or any modern technology means specially allocated for this purpose, or at the venue where the movables are
originally located, or at such other place licensed for that purpose by the competent authorities in the concerned Emirate
according to the legislation in force in the State.
2- A bona fide purchaser may request the annulment of the sale effected in violation of the provisions of Clause (1) of this
Article and the action in annulment may not be heard upon denial and lack of legitimate excuse, after the lapse of thirty (30)
days as of the date of the sale.
3- The provisions of Clauses (1) and (2) of this Article shall not apply to the items whose value offered for sale by public
auction does not exceed (200,000) Two Hundred Thousand Dirhams.
Article 121
1- The auctioneer undertaking the sale by public auction shall keep a specific book in Arabic or organised records, where he
shall enter all the items intended for sale, the initial estimation of their value and the names of those requesting sale. The
auctioneer shall further affix on the goods offered for sale numbered labels according to their registration in the said record
and shall enter therein the outcome of each sale.
2- Any person who violates the provisions of Clause (1) of this Article shall be punished by a fine which may not exceed
(20,000) Twenty Thousand Dirhams and, in case of recidivism, a maximum of (40,000) Forty Thousand Dirhams, without
prejudice to any other penalty or disciplinary sanction provided in the regulations organising the practice of the auctioneers
profession.
Article 122
Where the initial estimation of the used goods offered for sale at a public auction exceeds the amount of AED 400,000 (Four
Hundred Thousand Dirhams), the auctioneer shall publish the same, according to the procedures and periods set forth in the
decisions issued by the Minister of Economy, and the legislation in force in the State. The publication shall be one day prior
the date of the sale for examination of the exhibited goods.
Article 123
1- The purchaser who wins the auction shall pay half the price at the auction session and the balance when he receives the
item for which he was the successful bidder, and the handing over shall take place within one week of the date on which the
auction was awarded.
2- Should the successful bidder fail to pay the balance or abstain from appearing on the date fixed in Clause (1) of this Article
in order to receive the item awarded to him, the sale shall be repeated by public auction, as well, within (15) fifteen days of the
handing over date. The successful bidder of the first sale may not bid again in the second sale.
3- Where the second auction is awarded at a price less than that awarded at the first auction, the purchaser who failed to pay
the balance or to appear in order to receive the item awarded to him, shall be bound to pay the difference. However, where the
second auction is awarded at a higher price, the increase shall be for the eventual seller.
4- The price shall be paid in cash or through the modern technology means approved by the competent authority to the
auctioneer organising the auction, who shall be directly responsible for payment of such price to the person in favour of whom
the auction took place.
5- The person requesting the sale may not, either personally or through third parties, bid on the goods offered by him for sale.
Article 124
The hall owner, electronic platform used or the auctioneer, as the case may be, shall have a preferential right, for the fee or
commission to which he is entitled, over the price of the item he is selling at the public auction.
Article 125
1- The auctioneers’ profession, as well as the exploitation of auction halls and auction electronic platforms through modern
technology means, shall be organised by a regulation issued by the Minister of Economy, in consultation with the local
competent authorities.
2- Without prejudice to any more severe penalty stipulated in another law, whoever violates the provisions of the decision set
forth in Clause (1) of this Article, shall be sanctioned to pay a fine not exceeding (10,000) Ten Thousand Dirhams. Under all
circumstances, the judge shall order that the office or hall be closed, the electronic platform blocked, and the billboards and
panels, which the infringer used, be removed. The Court order shall be published at the expense of the convicted party,
according to the procedures and periods set forth in the legislation in force in the State.
Section 3 - Public Auction Sale and Sale at Reduced Prices in Commercial Stores
Article 126
1- Real or virtual commercial stores shall be prohibited from selling their goods at public auction, except in one of the
following instances and after obtaining the necessary licence from the local authorities:
a- Final clearance of the commercial store.

b- Final discontinuation of trading in one or more of the items usually traded by the commercial store.
c- Clearance of one of the commercial store's branches, unless such branch is located in the same city as the main
office of the commercial store.
d- Moving the main store and branches thereof, from one Emirate to the other. In such case, the clearance shall be
effected within four (4) months at most, and it shall result in a prohibition to carry out the activity, discontinued due to
the liquidation, in such Emirate before the lapse of one year at least from the date on which the auction was completed.
e- Clearance of the goods which have become defective due to fire, water leakage, humidity, insects raging or the like.
2- A decision shall be issued by the competent authority on the organisation and specification of the procedures related to
clearance and sale by public auction in accordance with the provisions of this Article.
Article 127
1- A real or virtual commercial store and its branches, located in the same city, may sell at reduced prices its items, at a
number of times, rules and periods specified by the competent authorities.
2- Shall be considered as discount sales any process intended to advertise for sales at reduced prices.
3- Sales may only be effected or announced by any media means, after obtaining a permit therefore from the competent
authority in the concerned Emirate. The announcement shall state the starting and ending date of the sales and the selling
prices prior to and during such period. Persons holding a valid trading licence and registered in the concerned Chamber of
Commerce may, alone, be granted such permit.
4- The merchant shall also observe any rules organising sales and issued by the competent authority in the concerned Emirate.
Article 128
Employees of the competent authority in the concerned Emirate shall have the right to control the implementation of the
provisions of Articles (126) and (127) of this Law. They are entitled to this effect to enter the commercial store licensed to
carry out the clearance or sales, and to request papers and documents pertaining to the operation, object of the licence, and to
prepare reports on any violation to its provisions.
Article 129
Any person violating the provisions of Articles (126), (127) and (128) shall be sanctioned to a fine not exceeding (40,000) Forty
Thousand Dirhams and, in case of recidivism, a maximum fine of (60,000) Sixty Thousand Dirhams, The perpetrator may be
prohibited from obtaining permits for discount sales for a period of three (3) years from the date on which he committed the
violation.
Section 4 - Certain Types of International Sales
Article 130
The parties may agree on the validity of the rules regulating international commercial sales issued by the International
Chamber of Commerce, instead of the provisions contained in this Section.
F. O. B (Free on Board Sales)
Article 131
1- An F.O.B sale is one by which the item sold is delivered at the loading port on board of the vessel designated by the
purchaser for its transport.
2- The purchaser shall in this kind of sale execute the maritime transport contract, pay the fees and notify the seller within
reasonable time of the name of the vessel designated for the transport, as well as the place and date of shipment and the
period set for effecting it.
3- The purchaser may entrust the seller with the execution of both transport and insurance contracts for the goods for his
account. The provisions of the agency contract shall govern the relationship between the seller and the purchaser in this
regard.
Article 132
1- The seller shall pack, wrap and transport the item sold to the loading port, and freight it on board of the vessel designated
by the purchaser, on the specified date and within the period set for freighting.
2- The seller shall bear the expenses of packing and wrapping as well as the costs of checking, measuring, counting or
weighing the item sold before freighting it.
3- The seller shall without delay notify the purchaser that the item sold has been freighted without delay and he shall dispatch
to him the supporting documents at the expense of the purchaser.
Article 133
1- Where the item sold needs an export licence or any other governmental licence to be exported outside the State, the seller
shall be bound to obtain the licence at his own expense.
2- The purchaser undertakes to obtain at his own expense the import permit and the other documents required for this
purpose.
3- The seller shall be bound to duly obtain a certificate of origin for the item sold and shall present it to the purchaser, who,
unless otherwise agreed upon, shall bear the expenses related thereto.
Article 134
The seller shall provide the purchaser with all assistance enabling him to obtain the bill of lading and such other documents
that have to be issued from the country where the freighting of the item sold took place, in order to facilitate its import or
transit across another country. The purchaser shall bear the expenses incurred for obtaining such documents.
Article 135
The seller shall pay all the sums due in connection with the item sold, including the export charges and the freight expenses
up to the moment when the item sold crosses, during its shipping, the barrier of the vessel. The purchaser shall as well bear
the consequences of the damages that may occur to the sold item up to this stage. However, any sums due or damages
sustained thereafter shall be borne by the purchaser.
Article 136
Where the arrival of the vessel, designated by the purchaser for transporting the goods, is delayed in reaching the loading port,
beyond the expiry of the period set for freighting; or where the vessel departs the said port before expiry of the said period; or
if the vessel is unable to ship the goods for a reason that cannot be attributed to the seller, the purchaser shall be liable for the
resulting additional costs and the damages suffered by the item sold from the expiry date of the period set for shipping,
provided that the item sold has been, on that date, designated in particular.
Article 137
Where the purchaser fails to notify the seller about the name of the vessel at the appropriate time or, if he reserves the right to
fix the date of delivery during a specified period, and he fails to do so, or, to designate the loading port but fails to issue
specific instructions during the said period, he shall be liable for the resulting additional costs and shall bear the damages
occurring to the sold item, from the expiry of the date of notification, or the period agreed upon to designate the date for
delivery, provided that the item sold has been, on that date, designated in particular.
Article 138
If it is agreed that the item sold shall be delivered on the dock of the loading port, where the vessel designated by the
purchaser is anchored, the sale shall be termed F.A.S., and such sale shall be governed by the provisions of the F.O.B. sales,
except the freighting of the goods on board of the vessel.
C. I. F Sale Cost, Insurance and Freight Sale
Article 139
1- A C.I.F. sale is one concluded against a lump sum covering the price of the item sold, the marine insurance charges and
freight by vessel to the port of destination.
2- The goods shall be considered as having been delivered to the purchaser upon freighting it on the vessel, and the
consequences of deterioration shall, from that moment be borne by the purchaser.
3- Where the seller did not take upon him to insure the goods, the sale shall be deemed a C&F sale.
Article 140
The seller shall conclude a contract for transport of goods with a reputable carrier, according to the customary conditions, and
choose a vessel suitable to carry similar goods as the items sold. The seller shall further pay the freight and any other sums
which the carrier might stipulate to be paid at the loading port.
Article 141
1- The seller shall contract, with a reputable insurer, an insurance policy covering the risks of transport of the items sold and
he shall assume all the necessary costs and expenses.
2- The insurance policy shall be concluded through a negotiable instrument in accordance with the customary conditions, and
the insurance amount shall not be less than the price mentioned in the sale contract.
3- The seller shall only be bound to insure against the normal risks of transport. He shall not be under obligation to insure
against additional and war risks unless so required by the purchaser.
4- Where the insurance is contracted with a reputable insurance company, the seller shall not bear any responsibility towards
the purchaser for the inability of the insurer to pay the insurance amount.
Article 142
1- The seller shall pack and wrap the sold items and ship them on board the vessel within the period agreed upon for shipping,
or that required by custom. The seller shall bear the costs of packing, wrapping as well as the expenses of checking, measuring,
weighing or counting as required for freighting the sold items.
2- The seller shall, without delay, notify the purchaser of the name of the vessel and of the completion of the freighting
operations.
Article 143
1- Freighting of the item sold by the seller shall be evidenced by means of the bill of lading, where the word "freight' is
mentioned. However, if the bill of lading states "under freight", the purchaser shall have to prove that the freight did not
actually take place on the date mentioned in the bill.
2- However, if the bill of lading contains a statement, handwritten and signed by the captain of the vessel, certifying that the
goods were actually freighted on the specified date, the purchaser shall not be bound to prove the contrary when confronting
the seller.
Article 144
1- The seller shall be bound to duly obtain a certificate of origin for the item sold and shall present it to the purchaser,
provided that the latter, unless otherwise agreed upon, bears the expenses related thereto.
2- The seller shall further provide such assistance as will be needed to enable the purchaser to obtain the necessary documents
that shall be issued in the country where freighting of the sold items took place, in order to facilitate their import or passage in
transit through another country.
Article 145
1- The seller shall pay all the sums due in connection with the items sold, until their freighting on the vessel, including the
export fees.
2- As for the import fees and the fees and expenses of clearance of the sold items until they are shipped on the vessel shall be
included in the export fees.
3- Import fees as well as charges and expenses to clear the sold tems at the discharge port shall be borne by the purchaser.
Article 146
The seller shall bear the consequences of the damages, which may occur to the item sold, up to the moment when it crosses
the barrier of the vessel; such liability shall thereafter devolve on to the purchaser.
Article 147
1- The seller shall, after freighting the goods, send without delay to the purchaser a clean negotiable bill of lading, addressed
to the discharge port. A list of the sold goods, their value, the insurance policy or a certificate in lieu thereof, in addition to any
other documents required by the purchaser shall be attached to the bill of lading. Where the bill of lading refers, in certain
matters, to the condition of the charter of the vessel, a copy of the latter shall also be attached to the bill of lading.
2- A bill of lading shall be deemed to be clean if it does not contain any express additional conditions confirming the existence
of defects in the item sold or in the method of its packing or wrapping. These additional conditions do not include a reference
in the bill of lading to the prior use of the containers or the wrappings or the lack of liability for any damage that may be
sustained because of the nature of the item sold or of the carrier's ignorance of the contents or weight of the packages.
3- The certificate substituting the original insurance policy, shall be issued by the insurer and shall include the basic
conditions provided for in the original policy vesting unto the bearer the rights stated therein.
Article 148
1- The purchaser shall not be bound to accept the documents sent to him by the seller, if they do not conform to the provisions
of the sale contract. The purchaser shall be deemed to have accepted such documents if he does not raise any objection,
through the purchaser’s bank, within seven (7) days from the receipt thereof. The objection shall be made by notice served in
writing to the seller asking him to forward documents conforming to the conditions agreed upon within a reasonable period
and the purchaser may after the expiry thereof, claim rescission of the sale and payment of compensation, if necessary.
2- Where the purchaser returns the documents for specific reasons or accepts them subject to reservations, he may not
thereafter make any objection for other than the causes and reservations already made.
3- Where the purchaser returns the documents without any legitimate reason, he shall be liable to compensate the seller for
whatever prejudice that may result therefrom.
Article 149
Where the vessel carrying the item sold arrives before the arrival of the documents or where the documents are received
incomplete, the seller shall immediately, upon being informed thereof, do whatever necessary to enable the purchaser to
obtain a copy of the undelivered documents or to complete the missing ones. The seller shall bear the expenses required for
this purpose and any compensation, if necessary.
Article 150
Taking into consideration the provisions of Article (108) of this Law, the purchaser shall be bound to hand over the goods sold
upon their arrival at the agreed port. The purchaser shall bear such amounts as they become due on the goods sold during their
transport, as well as the expenses of discharge upon arrival, unless the carrier has collected such amounts and expenses at the
transport, as well as the expenses of discharge upon arrival, unless the carrier has collected such amounts and expenses at the
loading port, or where it is agreed in the sale contract that they shall be borne by the seller (C. I. F Sale cost, insurance and
freight sale until the discharge).
Article 151
Where the purchaser reserves the right to fix a date for shipping or to designate the discharge port, within a specified period,
but fails to issue his instructions in this respect within such period, he shall have to bear any additional expenditure resulting
therefrom. He shall also bear the consequences of the deterioration of the goods sold until the expiry of the period set for
shipping, provided that the goods sold have been, on that date, specifically designated.
Article 152
Where it is revealed that the goods are not conformant to the documents, but the discrepancy is within the limits allowed by
custom, the purchaser shall be bound to accept it with a reduction in price to be assessed by the experts according to the
practices prevailing at the port of arrival.
Sale or Arrival
Article 153
A contract which includes conditions making the seller support the risk of damage to the goods after shipment, or makes the
performance of the contract conditional on the safe arrival of the vessel, or which vests the purchaser with an option to accept
the goods according to the contract or according to the sample delivered to him at the time of contracting, shall neither be a C.
I.F nor a F.O.B. sale, but shall be deemed to be a sale conditional upon delivery at the place of arrival.
Sale at the Airport of Departure
Article 154
A sale at the airport of departure is one by which the goods sold are delivered at the airport of departure, by way of placing
them at the disposal of the air carrier designated by the purchaser or chosen by the seller.
Article 155
1- The seller undertakes to deliver the goods at the airport of departure to the air carrier or to his representative at the place
and on the date agreed upon or at the place designated by the purchaser, after the conclusion of the contract. Delivery shall
take place according to the rules and customs applicable at the airport of departure.
2- The seller shall without delay notify the purchaser, by any means of wired or wireless communication or modern technology
means, that the delivery of the goods has been completed.
Article 156
1- Upon request of the purchaser, the seller shall conclude a contract for the transport of the goods, at the expense and
responsibility of the former. The seller may also do so in case the purchaser did not issue any instructions, within a reasonable
time, concerning the transport of the goods and such action is customarily practised. The seller may refrain however from
concluding a transport contract, in which case he shall promptly notify the purchaser thereof.
2- Should the seller conclude the transport contract, he shall abide by the instructions issued to him by the purchaser and
choose an aircraft suitable to carry goods of the same nature, according to the normal routing from the airport of departure to
the airport of arrival designated by the purchaser, or to the closest airport to the purchaser's establishment.
Article 157
1- The seller shall pay all fees and taxes due on the goods as a result of its export.
2- The seller shall provide the purchaser with all the documents available to him and required for receiving the goods.
Article 158
Where the air carrier or the other person designated by the purchaser refrains from receiving the goods at the airport of
departure, or otherwise if the purchaser does not provide the seller within a reasonable time with the instructions required for
the transport of the goods, the seller shall as promptly as possible notify the purchaser of this fact.
Article 159
1- In the instances where the seller is not obliged to conclude the contract for the transport of the goods, the purchaser shall
be bound to organise at his own expense the transport operation of the goods from the airport of departure to the airport of
arrival. The purchaser shall further designate the air carrier or his representative or any other person to whom the goods shall
be delivered, and he shall notify the seller thereof, within a reasonable time.
2- Where the purchaser does not notify the seller, within a reasonable time, of the instructions required for the transport of
the goods, the purchaser shall bear all the additional expenses resulting therefrom, as well as any damage that may be
sustained by the goods, from the date fixed for delivery, provided that the goods were sorted or specifically designated.
Article 160
Where the air carrier, or any other person designated by the purchaser, refrains from receiving the goods, the purchaser shall
bear all the additional expenses resulting therefrom. He shall as well bear the responsibility for any damage that may be
sustained by the goods, from the date on which the goods are ready for delivery, provided that the goods were sorted and
specifically designated.
Article 161
The sale contract in the above international sales shall be independent and shall not affect the relationships between the
seller, the purchaser and the carrier in the transport contract, or between the purchaser and the bank in the documentary
credit contract.
Title 3 - Commercial Mortgage
Article 162
1- A commercial mortgage is a bailment on an item in security of a commercial debt.
2- With the exception of the restrictions stipulated herein or in any other law, a commercial mortgage may be established by
all means of proof, as between the contracting parties or third parties.
3- The provisions of this title shall apply without contradicting any special legislation regulating commercial mortgage.
Article 163
1- A commercial mortgage shall have no effect against the debtor or a third party, unless possession of the mortgaged item
passes from the mortgagor to the mortgagee creditor or to such other person as appointed by both contracting parties and
remains in the possession of either of them who received it until the termination of mortgage or placement of the item under
joint possession in such a manner as to prevent the mortgage from disposing thereof independently from the creditor.
2- The mortgagee creditor or the third person shall be deemed to hold possession of the mortgaged item if it is placed at his
disposal in such a manner as will lead others to believe that it has been put under his custody; or if he receives a deed
representing the mortgaged item vesting unto its holder exclusively the right to receive the same.
3- Possession of rights shall pass by the delivery of the deed thereto. Should the deed be deposited with a third party, the
delivery of the deposit receipt shall be deemed as the delivery of the deed itself, provided that the deed is thoroughly described
in the receipt and provided that the depositee accepts possession thereof for the account of the mortgagee creditor. In such
case, the depositee shall be considered as having waived every right he had, to seize the deed for his own account for a reason
existing prior to the mortgage, unless he had reserved such right when he accepted to hold possession of the deed for the
account of the mortgagee creditor.
Article 164
1- Where the mortgaged item consists of registered securities, their mortgage shall be made in writing through an assignment
of these securities mentioning on it that it has been made as collateral. This assignment shall be entered in the registers of the
entity issuing such securities. The rank of the mortgagee creditor shall be determined as of the date of such entry.
2- As for promissory notes, the mortgage thereof shall be effected by an endorsement stating that the value is for pledge or for
guaranty or any other statement to this effect.
Article 165
1- In a commercial debt, the debtor may mortgage to his creditor, through a written instrument, a debt owed to him by a third
party. Should this be the case he has to deliver to his mortgagee creditor the instrument evidencing such debt.
2- The mortgage of a debt shall have no effect against the debtor on whose debt the mortgage was effected, unless such
mortgage is notified to him or unless he accepts it. Likewise, it shall have no effect against a person other than the said debtor,
unless the mortgagee creditor holds possession of the title to this mortgaged debt.
3- The ranking of the mortgage shall be determined as of the established date of notification or of acceptance.
Article 166
The mortgagee creditor shall take all the necessary measures to safeguard and assure the maintenance of the mortgaged item.
Where this item is a commercial paper, he shall, on the due date, take the necessary measures to protect the right established
therein and collect it. The mortgagor shall be bound to pay all expenses incurred by the mortgagee creditor in this respect.
Article 167
The mortgagee creditor shall use, for the account of the mortgagor, all the rights and procedures relevant to the mortgaged
item, to receive its value, profits, interests and any other sums accruing therefrom. He shall however deduct the sums received
from the amount of the expenses incurred on behalf of the mortgagor, then, from the interests, then, from the principal
amount secured by the mortgage, unless the agreement provides otherwise.
Article 168
The mortgagee creditor shall, when requested by the mortgagor, deliver to him a receipt showing the nature, type, quantity,
weight and other distinguishing features of the mortgaged item.
Article 169
1- Where a mortgage is laid on actual cash money, it shall be maintained even if the mortgaged item has been replaced by
another of the same type.
2- Where the mortgaged item is not actual cash money, the mortgagor may replace it by another item, provided that this is
agreed upon in the mortgage contract and that the mortgagee creditor accepts the substitute, without prejudice to the rights of
a bona fide third party.
Article 170
1- Where the debtor fails to pay the debt secured by the mortgage on its maturity date, the creditor shall, after the lapse of
seven (7) days from the date of service of notice on the debtor to pay, ask the court to authorise him to sell the mortgaged
item. This request shall be decided upon summarily and the court shall determine the mode of payment.
2- The mortgagee creditor shall have the priority right to recover his debt, the principal, interests and expenses incurred in
claiming it, from the price resulting from the sale.
Article 171
Unless otherwise agreed, if the mortgage is laid on several properties, the mortgagee creditor shall be entitled to designate the
property to be sold. Under all circumstances, the sale may only cover what is sufficient to settle the mortgagee creditor’s right,
except where the item sold is indivisible.
Article 172
Where the market price of the mortgaged item decreases and becomes insufficient to secure the debt, the creditor may fix a
suitable time limit for the mortgagor to complement the security. Should the mortgagor refuse to do so, or where the time
limit expires and the mortgagor fails to complement the security, the creditor may request, even before the maturity date, the
sale of the mortgaged item in accordance with the procedures set forth in Article (170) of this Law.
Article 173
Where the mortgaged item is subject to perishing, deterioration or decrease in value, or where its possession necessitates the
incurring of exorbitant expenses and the mortgagor is unwilling to replace it by another item, either the creditor or the
mortgagor may petition the court requesting an authorisation to sell it forthwith and determine the method of sale. In this
case the mortgage shall be transferred to the price resulting from the sale.
Article 174
1- Every agreement concluded at the time or after the laying of a mortgage, which vests the mortgagee creditor, in case the
debtor does not settle the debt on the maturity date, with the right to acquire or to sell the mortgaged item, without observing
the provisions and procedures provided for in Article (170) of this Law, shall be null and void.
2- However, after the maturity of the whole debt or an instalment thereof, it may be agreed that the debtor shall assign to the
creditor the whole or part of the mortgaged item in settlement of the whole debt or part thereof.
Article 175
Where the mortgaged item is an instrument, the nominal value of which has not been paid in full, the mortgagor shall, when
called upon to pay the unpaid portion, provide the mortgagee creditor with the amounts required to pay such portion, at least
two days before the maturity date. The creditor may, in default thereof, sell the instrument according to the procedures
provided for in Article (170) of this Law.
Title 4 - Deposit in Public Warehouses
Article 176
1- Deposit in public warehouses is a contract pursuant to which the warehouseperson - whether an individual, a company or a
public entity - undertakes to receive and store goods for the account of the depositor or any other person to whom title or
possession thereof passes by virtue as evidenced by the instrument relative thereto.
2- No public warehouse vested with the right to issue negotiable instruments representing the goods deposited therein, may
be established or exploited except by virtue of a licence issued by the competent authority in the concerned Emirate, and
according to such terms and conditions as stated in a decision issued by the Minister of Economy in consultation with the local
competent authority.
3- Any warehouse where goods are received for deposit, in consideration of which no storage and mortgage deed are issued,
shall not be subject to the provisions of public warehouses.
4- Any person exploiting a public warehouse shall cover it with an insurance against the risks of fire, damage and theft.
Article 177
1- The warehouseperson may not practice, in any capacity, either in his name or for the account of third parties, any act of
commerce having for object goods of the same kind as the goods he is licensed to keep in his warehouse and issue instruments
representing such goods.
2- The foregoing provision shall apply if the person in charge of exploiting the warehouse is a company where one of its
partners, owning at least ten percent (10%) of its capital, practices an act of commerce included among the restriction stated
in Clause (1) of this Article.
Article 178
1- The depositor shall provide the public warehouse with correct data about the nature, type, value and quality of the
deposited goods.
2- The depositor shall be entitled to examine the delivered goods, for his account, to the public warehouse and to take samples
thereof.
Article 179
1- The warehouseperson shall be responsible for the goods handed over to him up to, and without exceeding, the amount
estimated by the depositor.
2- The warehouseperson shall not be liable for any damage to, or shortage in, the goods if resulting from a force majeure or
from the nature of the goods, their packaging or wrapping.
Article 180
The warehouseperson may, after notifying the depositor, apply to the court, to which jurisdiction the public warehouse
pertains, to grant him permission to sell the goods deposited if they are subject to rapid deterioration, in which case the court
shall designate the method of sale.
Article 181
1- The depositor shall receive from the warehouseperson a storage receipt showing the depositor's name, occupation and
domicile, as well as the type, nature and quantity of the deposited goods, the name and location of the warehouse, name of the
insurer of the goods -if any- and such other particulars as are required to identify the characteristics of goods and indicate
their value.
2- A mortgage deed stating all the data mentioned in the storage receipt shall be attached to each storage receipt.
3- The warehouseperson shall keep a true copy of the original of the storage receipt and the mortgage deed.
Article 182
Where the goods deposited in respect of which a storage receipt and a mortgage deed have been issued are fungible, they may
be replaced by goods of the same nature and quality provided a stipulation to this effect has been included in both the storage
receipt and the mortgage deed. In this case all the rights and privileges of the receipt or deed holder shall apply to the new
goods.
Article 183
1- The storage receipt and the mortgage deed may be issued in the name or to the order of the depositor.
2- Where the storage receipt and the mortgage deed are made to the order of the depositor, he may assign them together or
separately by endorsement.
3- The endorsee of a storage receipt and a mortgage deed or of either may request that the endorsement be recorded on the
copy kept by the warehouseperson with mention of his domicile and occupation.
Article 184
1- The endorsement of the storage receipt and the mortgage deed shall be dated.
2- Where the mortgage deed is separate from the storage receipt, the endorsement shall be accompanied by an authorisation
condition and include the sum of the debt secured by the mortgage, the maturity date, the creditor's name, occupation,
domicile and the signature of the endorser.
3- The endorsee shall be entitled to request that the mortgage deed endorsement as well as any relevant particulars be
recorded in the books of the warehouse and that the mortgage deed be marked up with such endorsement and particulars.
Article 185
1- The holder of both the storage receipt and the mortgage deed shall be entitled to receive the deposited goods. However, he
may request that the goods be divided into several batches and that he is provided with a storage receipt and mortgage deed
for each batch.
2- The holder of the mortgage deed alone without the storage receipt shall have a right of mortgage on the deposited goods.
3- The holder of the storage receipt only, without the mortgage deed, shall have the right to recover the deposited goods
provided that he pays the debt secured by the mortgage deed, if such debt is due. He may, otherwise, recover the goods before
the maturity date of the debt, as long as he deposits with the warehouseperson a sufficient sum to pay off the debt with its
interest and expenses until it becomes due. This provision shall apply if the debt is due and the holder of the mortgage deed
does not appear to cash it. Recovery of the deposited goods may be restricted to one part thereof of after paying a sum
proportionate to the value of such part.
Article 186
Where the debt secured by the mortgage deed is not paid on its maturity date, the holder of the mortgage deed, separate from
the storage receipt, may request the sale of the mortgaged goods by following the procedure set forth in Article (170) of this
Law.
Article 187
1- The mortgagee creditor shall have a priority right over all the creditors for recovering his right from the cost of the goods
after deduction of the following amounts:
a- Taxes and duties due on the goods.

b- Judicial expenses incurred for the joint interest of the creditors.
c- Expenses incurred for the safekeeping, storage and sale of the goods.
2- Any amount exceeding the sum due to the holder of the mortgage deed shall be paid to the holder of the storage receipt if
he is present at the time of the sale of the goods, otherwise, the amount shall be deposited with the treasury of the court
ordering the sale.
Article 188
1- The holder of a mortgage deed may not have recourse against the debtor or the endorsers until execution has been carried
over the mortgaged goods and the resulting amount proved to be insufficient to pay off the debt.
2- The holder of a mortgage deed shall have recourse against the endorser within fifteen (15) days from the date on which
goods are sold, otherwise action shall be rejected in case of denial.
3- Under all circumstances, the holder of a mortgage deed shall forfeit his recourse action against the endorsers if he fails to
commence the execution procedures over the mortgaged goods, within thirty (30) days from the maturity date of the debt.
Article 189
If the goods were subject to an accident, the holder of the storage receipt or the mortgage deed shall have, over the insurance
amount which becomes payable upon the occurrence of such accident, all rights he has over the goods.
Article 190
1- In case the storage receipt is lost or damaged, the concerned person may request the Civil Court to which jurisdiction the
public warehouse pertains, for an injunction ordering the warehouseperson to hand him a copy of the said receipt, provided
that he proves his ownership thereof and provides a guarantor or a sufficient security.
2- In case of loss or damage of the mortgage deed, the person concerned may obtain from the court an injunction ordering the
2- In case of loss or damage of the mortgage deed, the person concerned may obtain from the court an injunction ordering the
debtor to pay the secured debt upon maturity; provided that he provides a guarantor or a sufficient security. If the debtor fails
to execute the injunction, the person in whose favour the injunction was issued may request that the mortgaged goods be sold
by following the procedures stipulated in Article (170) of this Law, provided that the endorsement has been recorded on the
copy kept by the warehouseperson, and that the notice requiring payment contains the particulars of such endorsement.
Article 191
1- The guarantor provided, in case of loss of the storage receipt, shall be discharged from liability upon recovery of the goods
or by the lapse of three (3) years if no claim is addressed to the warehouse for the recovery of the goods.
2- The guarantor provided, in case of loss of the mortgage deed shall be discharged from liability by the lapse of three (3) years
from the date of recording the endorsement in the books of the public warehouse.
Article 192
1- Where the depositor fails to recover the goods upon expiry of the deposit contract, the warehouseperson may request the
sale thereof by following the procedures provided for in Article (170) of this Law. He shall recover the sums due to him from
the proceeds of the sale and hand over the balance to the depositor or deposit such balance with the court treasury for the
depositor's account.
2- The provision of Clause (1) of this Articlce shall also apply if the deposit is made for unspecified duration and one year
elapsed after the depositor fails to request the recovery of the goods or expresses his willingness to carry on with the deposit
contract.
Article 193
1- Without prejudice to any more severe penalty, whoever establishes or exploits a public warehouse without obtaining the
licence stipulated in Clause (2) of Article (176) of this Law shall be sentenced to imprisonment and a fine not less than (20,000)
Twenty Thousand Dirhams and not exceeding (100,000) One Hundred Thousand Dirhams or with either of these two penalties.
2- In case of judgement of conviction, the Court may order the closure of the warehouse until the violator obtains the required
licence, as it may also order the liquidation of the warehouse.
Title 5 - Securities Market and Commodity Contracts
Article 194
A securities market or commodity contracts may not be opened in the State except after obtaining the necessary licences
according to the legislation regulating the securities markets and commodity contracts in force at the State.
Title 6 - Commercial Agency
Article 195
1- An agency shall be commercial when it relates to acts of commerce.
2- The provisions contained in this Title shall apply in a manner that does not contradict the Commercial Agencies Law
referred to in this Law.
Article 196
1- Unless otherwise agreed, a commercial agency shall be against remuneration.
2- Where the agent's fee has not been fixed in the agreement or has not been specified by the Law, it shall be determined
according to customary practice and, in the absence thereof, shall be estimated by the court.
Article 197
The remuneration shall be due to the agent by the mere execution of the transaction assigned to him, or if he proves that it
was not executed due to reasons attributed to the principal. In all other cases, the agent shall only be entitled to a
consideration for his efforts and expenses in accordance with customary practice, if any, or pursuant to the court's estimation.
Article 198
Unless otherwise agreed, the commercial agency, although absolute, shall apply only to acts of commerce.
Article 199
Where the commercial agency agreement covers a specific commercial transaction, the agent may carry out all the actions
required to execute such transaction without the need to obtain an authorisation from the principal.
Article 200
1- The agent shall abide by the compulsory and express instructions of the principal, and if he violates them without an
acceptable excuse, the principal may refuse the transaction. However, as per advisory instructions issued by the principal, the
agent shall be free to act within the scope of the general objectives set by the principal to his agent.
2- In the absence of clear instructions issued by the principal concerning the transaction, the agent shall delay its conclusion
and request instructions from the principal, unless the delay in completing the transaction may cause damage to the principal
or unless the agent is authorised to act without instructions from the principal.
3- The agent may delegate a third party to execute the agency if he is authorised to do so by the principal.
Article 201
Where the agent implements the tasks assigned to him under conditions that are more favourable than those stipulated in the
agency agreement, he may not keep for himself the difference which in such case belongs to the principal, unless otherwise
agreed upon.
Article 202
Where the goods or items held by the agent for the account of the principal are subject to rapid deterioration or devaluation
and no instructions were received, within a reasonable time, from the principal, the agent may summarily request from the
court an authorisation to sell them according to the method determined by it.
Article 203
The agent may refrain from performing the work entrusted to him where performance requires extraordinary expenses which
have not been paid by the principal, unless agreed upon between the two parties or unless there are previous dealings between
them requiring from the agent to pay such expenses.
Article 204
Should the agent refuse to execute the transaction entrusted to him, he shall notify this refusal to the principal immediately.
In such case, the agent shall preserve the goods and other items kept with him for the principal until he receives instructions
in this respect. If these instructions are not received in due time, the agent may request the court for an authorisation to
deposit the goods and other items with a trustee to be appointed by it.
Article 205
The agent shall be liable for the destruction and deterioration of the goods and other items which he keeps for the principal,
except where this results from a foreign cause beyond the agent's control or from a inherent defect of the goods or items.
Article 206
The agent shall not be bound to insure the items which he keeps for the principal unless the latter so requires, or where
insurance is obligatory according to the law or custom, or if the nature of the item so dictates.
Article 207
1- The agent may not constitute himself as a second party to the transaction assigned to him for conclusion except in the
following instances:
a- If the principal authorises him to do so.

b- If the principal's instructions concerning the transaction are express and specific, provided the agent has
implemented them accurately.
c- If the transaction is related to a commodity which has a fixed price in the market and the agent has bought it for
himself or has sold it to the principal from his own money at this price.
2- The agent, in such cases, shall not be entitled to any remuneration in consideration thereof.
Article 208
A third party dealing with the agent may request the right to peruse the agency contract, the correspondences and other
documents establishing the agent's authority. Any restrictions to the agent's authority may not be opposed to a third party,
unless the latter had knowledge of such restrictions at the time of contracting.
Article 209
The agent shall inform the principal of the transactions he concludes for the latter’s account.
Article 210
The agent shall submit to the principal on the agreed date, or on the date determined by custom or by their previous dealings,
a true account of the business carried out for his account. Such account shall be conformant to the truth and should this
account include premeditated false particulars, the principal may reject the relevant transactions, and shall further be entitled
to claim compensation. The agent shall not receive any remuneration for the said transactions.
Article 211
The agent may retain possession of the goods and other items dispatched to, deposited with or delivered to him by the
principal, to guarantee payment of the fees and expenses due to him by the principal.
Article 212
Either party to the commercial agency agreement may terminate it at any time. No compensation shall be due except if the
termination occurs without prior notice or at an undue time. Where the agreement is made for a fixed term, it may only be
terminated for a serious and acceptable reason, otherwise compensation will be due.
Article 213
In the absence of a known domicile of the principal in the State, the domicile of his agent shall be deemed to be his domicile.
He may be sued and official papers served on him, at this domicile, with regard to the business conducted by the agent on
behalf of the principal.
Article 214
The conduct of the commercial agency business shall be organised by specific laws enacted for this purpose .
Chapter 2 - Certain Types of Commercial Agencies
1 - Contracts Agency
Article 215
1- A contract agency is a contract pursuant to which the agent undertakes to carry on continuously, in a specific area of
activity, promotion and negotiation in order to enter into transactions for the benefit of the principal and in return of a
remuneration. The agent's task may include the conclusion and execution of transactions in the name of the principal and for
his account.
2- The contracts agency agreement shall be in writing, and it shall indicate, in particular, the limits of the agency, the agent’s
fee, the area of his activity, the term of the contract if it is of a fixed term, and the trademark of the commodity subject of the
agency, if any.
Article 216
The contracts agent shall carry out the business of his agency and manage his commercial activity in an independent manner,
and shall bear alone the expenses necessary to conduct such business.
Article 217
Where the contract stipulates that the contracts agent shall set up showrooms or warehouses for the goods or maintenance
and repair installations, the contract term shall not be less than five years, except if otherwise agreed.
Article 218
1- The contracts agent may not receive the principal's dues, unless the principal vests him with this right, in which case the
agent may not make any reduction or grant a respite without special authorisation to this end.
2- The contracts agent may receive the applications related to the implementation of the contracts entered in through him, as
well as any complaints concerning the non-implementation of such contracts. He shall further be deemed as the
representative of his principal in the cases relevant to said contracts, whether as plaintiff or defendant, in the area of the agent’
s activity.
Article 219
1- The principal shall pay the agreed remuneration to the agent.
2- Unless otherwise agreed, the remuneration may be a percentage of the transaction value, to be calculated on basis of the
sale price to the customers.
Article 220
The contracts agent shall be entitled to remuneration for the transactions concluded or for those whose non-conclusion is due
to the principal's act, unless the contract stipulates otherwise.
Article 221
The principal shall provide the agent with all the information necessary for the implementation of the agency.
Article 222
1- The contracts agent shall safeguard the principal's rights and he may take all the precautionary measures to this effect. He
shall as well provide the principal with the information pertaining to the market conditions in the area of his activity.
2- The contracts agent may not, even after termination of the contractual relationship, divulge the principal's secrets that may
come to his knowledge as a result of the execution of the agency contract.
Article 223
In the event where the principal substitutes the contracts agent by a new agent, the latter shall be jointly responsible with the
principal for the payment of the compensation decided by the court to the previous agent whenever it is established that the
replacement of the previous agent was a result of collusion between the principal and the new agent.
Article 224
As an exception to the rules of jurisdiction provided for in the Code of Civil Procedures, the court within whose jurisdiction the
place of implementation of the contract is located, shall be competent to look into all conflicts arising from the contracts
agency agreement.
Article 225
A distribution contract whereby a merchant undertakes to promote and distribute the products of an industrial or commercial
establishment in a specific area on an exclusive distributorship basis, shall be considered as a contracts agency and be
governed by the provisions of Articles (218), (223) and (224) hereof.
Article 226
All lawsuits arising from a contracts agency agreement shall not be heard upon denial and lack of legitimate excuse after the
lapse of three (3) years from the expiry of the agency.
2 - Commission Agency
Article 227
1- A commission agency is a contract whereby the agent undertakes to carry out in his own name a legal act for the account of
the principal against a commission to be paid by the latter.
2- Where the commission agent carries out the legal act in the name of the principal, he shall be subject to the general
provisions governing the commercial agency.
Article 228
1- Where the commission agent sells at a lower price or buys at a higher price than that fixed by the principal, and this latter
wishes to refuse the transaction, the principal shall notify his refusal to the agent within one week from the date on which he
was informed of the conclusion of the transaction, otherwise he shall be considered as having accepted the price.
2- The principal may not reject the transaction if the agent accepts to bear the price difference.
Article 229
1- Where the commission agent buys for the account of the principal, goods of a type or category that is different from that
ordered by the principal, the latter shall not be bound to accept them.
2- Where the commission agent buys goods which are conforming to those ordered but in a larger quantity, the principal shall
be bound to accept only the quantity which he has ordered.
Article 230
Should the commission agent conclude a contract with terms more favourable than those specified by the principal, the
benefit of these terms shall be devolved to the principal and the agent has to account on basis of the true conditions according
to which the transaction was concluded.
Article 231
1- Where a commission agent, who is asked to sell, grants the purchaser, without the authorisation of the principal, a respite
for payment of the price or accepts that it be made by instalments, the principal may require the agent to pay the whole price
immediately, in which case the commission agent may retain for himself the price difference and its interests, if any.
2- The commission agent may grant a respite for payment of the price or make the price payable by instalments without the
principal's authorisation, if it is customarily acceptable in the area where the sale was effected, except where the principal's
instructions compel the agent to sell on payment in advance basis.
Article 232
Where the principal instructs the commission agent to sell on deferred payment basis and the latter sells for payment in
advance at a lower price, the principal may not require him to pay the price until maturity of the term fixed by him. In this
case, the commission agent shall be bound to pay the price fixed on the basis of deferred payment sale.
Article 233
1- The commission agent may not change the trademarks affixed on the goods received by him from the principal or for the
principal's account.
2- Where the commission agent has in his possession several goods of the same type dispatched to him by different principals,
he shall place a distinctive label on each lot.
Article 234
1- The commission agent may disclose the name of the principal for whose account he enters into contract unless the principal
requires him not to do so. The disclosure of the principal's name shall not result in a change in the nature of the agency as long
as the commission agent concludes the contract in his name.
2- The commission agent shall disclose to the principal the name of the third party with whom he concludes a contract if the
principal requires him to do so. In default thereof, without an acceptable excuse, he may be considered as having guaranteed
the implementation of the transaction.
3- Under all circumstances, the commission agent shall prove the existence of the third party with whom he contracted, should
the principal require the same.
Article 235
1- The commission agent and the third party with whom he entered into contract shall be reciprocally bound to each other.
2- Unless otherwise provided by law, the third party with whom the commission agent has entered into contract may not have
direct action against the principal, neither may this latter have direct action against such third party.
Article 236
1- In addition to his right to a possessory lien, the agent shall have a privilege over such goods and other items dispatched to
him, deposited with him or delivered to him by the principal.
2- The said privilege shall secure the agent's remuneration and any expenses and sums paid by him on behalf of the principal
or loaned to the latter. In addition, he shall be liable to pay the interests accrued and other amounts that are due to the agent
because of the agency, irrespective whether such amounts have been paid before delivery of the goods and items or while still
in the possession of the agent.
3- The said privilege shall be established without regard to whether the debt has arisen from business related to the goods or
items that are still in the agent's possession or to other goods or items which had previously been deposited with, delivered to
or dispatched to the agent.
Article 237
1- The agent shall not be entitled to the privilege referred to in Article (236) of this Law, unless he is in possession of goods or
items for the principal's account; and such possession shall materialise in the following instances:
a- Where the agent has in fact received the goods or items.

b- Where the goods or items were placed at his disposal in a public warehouse or at the customs.
c- Where he legally had possession of the goods before their arrival pursuant to the bill of lading or any other bill of
transport.
d- Where he has dispatched the goods and has retained possession thereof pursuant to a bill of lading or any other bill
of transport.
2- In case the goods or items subject to privilege have been sold and delivered to the purchaser, the agent's privilege shall pass
to the price.
Article 238
The agent's privilege shall have priority over all other privileges, except judicial expenses and sums due to the Government.
Article 239
1- The execution procedures adopted for a commercially mortgaged object shall apply to the execution on goods and items
held in possession of the agent.
2- Where the agent is in charge of selling the goods or items held in his possession, he may execute by selling them without
having to comply with the procedures referred to in Clause (1) of this Article, unless he fails to abide by the principal's express
instructions issued in respect of the sale.
Article 240
1- Where the commission agent who is in charge of the sale is adjudicated bankrupt before cashing the price, the principal may
claim payment of the price directly from the purchaser.
2- Where the commission agent who is in charge of purchase is adjudicated bankrupt before he receives the purchased item,
the principal may claim its delivery directly from the seller.
Article 241
1- The commission agent shall not guarantee the third party with whom he contracted in the fulfilment of his obligations
unless he assumes expressly this guarantee, or if such guarantee is provided for by law, or if it is customary in the area where
he carries on his activity.
2- The commission agent who guarantees the contracting party in the fulfilment of his obligations, shall be entitled to an
additional remuneration to be determined by the court in the absence of an agreement or custom in this respect.
Article 242
The commission agent may not delegate to a third party the task entrusted to him, unless he obtains the permission of the
principal to do so. Should he fail to comply with this provision, the person delegated shall have no right to a possessory lien or
to a privilege except to the limit of the debt due to the original commission agent.
3 - Commercial Representation
Article 243
The commercial representation is a contract pursuant to which the commercial representative undertakes to enter into
transactions in the name and for the account of his principal, on a permanent basis and within a specific area.
Article 244
The commercial representative shall not warrant the implementation of the transactions concluded through him, unless he
had expressly agreed to such guarantee or in case the custom in the area where he carries on his activity dictates such a
guarantee.
Article 245
1- The merchant shall be liable for any transactions and contracts entered into by his representative within the limits of the
authority allowed by him.
2- Where the representative is appointed by several merchants, they shall be jointly responsible.
3- If the representative is mandated by a company, the latter shall be responsible for his acts and the partners' responsibility
3- If the representative is mandated by a company, the latter shall be responsible for his acts and the partners' responsibility
shall depend on the type of the company.
Article 246
1- Where the limits of the authority vested in the commercial representative have not been determined, the authority shall be
deemed general and comprehensive for all the transactions related to the type of trade which the representative has been
authorised to carry out.
2- The merchant may not oppose against a third party that the authority is limited unless he establishes that such third party
was aware of such limitation.
Article 247
The commercial representative shall carry out in the name of the merchant who delegated him the acts of commerce which he
has been authorised to undertake. He shall, upon signing, place next to his name in full, the full name of the merchant and
shall indicate his capacity as commercial representative, failing which he shall be personally liable for his own acts. Third
parties may, however, have direct recourse against the merchant in respect of the transactions concluded by the representative
in connection with the trade which he has been authorised to carry out.
Article 248
The commercial representative may represent the merchant in the lawsuits arising out of the commercial transactions carried
out by him.
Article 249
The commercial representative shall be jointly liable with the merchant for observing the law provisions related to unfair
competition.
Article 250
The commercial representative may not effect, for his own account or for the account of a third party, any commercial
transaction of the type included in his representation agreement, without obtaining an express approval to do so from the
merchant who had appointed him.
Article 251
Where it is agreed that the commercial representative shall be the exclusive general representative of the merchant in the
agreed area, the representative shall be entitled to a commission for each transaction entered into for the account of the
merchant in such area, even if the merchant has concluded it by himself or if it were concluded through a person other than
the commercial representative, unless the merchant proves that non-conclusion of the transaction through the commercial
representative is due to a reason related to the representative himself.
Title 7 - Brokerage
Article 252
Brokerage is a contract pursuant to which a broker undertakes to another person, against remuneration, to look for and
mediate in the negotiations with a second party in order to conclude a contract.
Article 253
1- Where the broker's remuneration is not fixed in the law or the agreement, it shall be determined according to custom. In the
absence of a custom, the judge shall estimate it commensurately with the effort exerted by the broker and the time spent in
carrying out the work assigned to him.
2- The judge may reduce the remuneration agreed if it is not commensurate with the nature of the transaction and the effort
exerted by the broker. No reduction may be decided if the remuneration is fixed in the agreement or has been willingly paid by
the customer after conclusion of the contract resulting from the broker's mediation.
Article 254
1- The broker shall not be entitled to remuneration unless his mediation results in the conclusion of the contract between the
two parties. The contract shall be deemed concluded once both parties have agreed on all the substantial matters therein.
2- Unless otherwise stipulated by agreement or by custom, the broker shall be entitled to receive his remuneration by the mere
conclusion of the contract even if not executed.
3- Where the contract is conditional upon a suspensive condition, the broker shall receive his remuneration only when the
condition is met.
4- Where the contract cannot be concluded for a reason attributable to the customer, the broker shall be entitled to
4- Where the contract cannot be concluded for a reason attributable to the customer, the broker shall be entitled to
compensation commensurate with the effort exerted.
Article 255
Where the contract object of the broker’s mediation is rescinded, the broker may claim payment of his remuneration or keep it,
in case already received, unless fraud or gross error is proved on his part.
Article 256
Where the broker mediates for the conclusion of a legally prohibited transaction, he shall not be entitled to remuneration in
consideration thereof.
Article 257
1- The broker shall be entitled to remuneration only from the party to the transaction who has asked for his mediation.
2- Where the authorisation is issued by both parties, each of them shall be severally liable towards the broker for payment of
the remuneration owed by him, even if they had agreed that either one of them will bear the broker's remuneration in full.
Article 258
The broker, even if commissioned by one party to the transaction, shall give both parties a true and faithful description thereof
and inform them of all circumstances known to him. He shall be liable to them for any fraud or fault committed by him.
Article 259
The broker may not redeem the expenses incurred by him in the execution of the task assigned to him unless otherwise agreed,
in which case the said expenses shall be payable even if the contract has not been concluded.
Article 260
The broker may not claim his remuneration or redeem his expenses if he has acted to the detriment of one party in favour of
the other party who did not commission him, or where he has obtained a promise from such other party, contrary to the
requirements of good faith, to obtain a benefit for himself.
Article 261
The broker may not constitute himself as second party to the contract for which he is mediating unless the contracting party
authorises him to do so, and in such case he shall not receive any remuneration.
Article 262
1- The broker shall record in his books all the transactions completed through his endeavours and shall keep the relevant
documents. He shall further deliver a true copy of the original of all the foregoing to any contracting party requiring them.
These books shall be subject to the provisions applicable on commercial books.
2- In case of sale according to samples, the broker shall keep the sample until the purchaser, without reservation, accepts the
goods, or until all conflicts are settled between both parties in this respect.
Article 263
The broker shall be liable to compensate any damages resulting from the destruction or loss of documents, papers or items
delivered to him and related to the transaction for which he is mediating, unless he proves that such destruction or loss was
due to a force majeure.
Article 264
The broker may not act as intermediary for persons who are reputed for their insolvency or if he knew them to be incapacitated.
Article 265
1- The broker does not guarantee the solvency of both parties to the transaction in which he mediates. He shall bear no
liability for the implementation of the said transaction or for the value and quality of the goods related thereto, unless it is
established that he committed an act of fraud or fault and he is held for guarantee under the agreement or the law.
2- The broker shall however be jointly liable for the implementation of the transaction with the contracting party if he has
over his remuneration an interest therein.
Article 266
1- Where the broker delegates another person to perform the task assigned to him without being authorised to do so, he shall
be liable for the proxy's act as if such act had emanated from him; and both the broker and his proxy shall be jointly liable.
2- Where the broker is authorised to appoint a proxy without any designation of the person of such proxy, the broker shall only
be liable for his fault in choosing his proxy or his fault in the instructions issued by him to the proxy.
3- Under all circumstances, the person who has assigned the broker may have direct recourse against the proxy.
Article 267
Where several brokers have been mandated for one contract, they shall be jointly liable for the task entrusted to them, unless
they have been authorised to act severally.
Article 268
Where several persons mandate one broker for a joint task, they shall be jointly liable towards him for the execution of the
mandate, unless otherwise agreed.
Article 269
Brokerage in the stock exchange and commodities markets shall be governed by the laws and regulations enacted for this
purpose.
Title 8 - Transport
Article 270
A transport contract is a contract by which the carrier undertakes to transport, against a fee, by his own means of transport, a
person or an item from one place to another.
Article 271
With the exception of maritime transport, the provisions stipulated under the present Title shall apply to all kinds of transport
regardless of the carrier's capacity, without prejudice to the provisions stipulated in special laws concerning certain kinds of
transport and in the international transport conventions applicable in the State.
Article 272
The provisions of this Title shall apply to transport even if it is associated with operations of another nature, as long as such
operations do not constitute the main objective of the contract.
Article 273
1- The transport contract and the transport commission agency contract is concluded by the mere acceptance of an offer,
unless both parties agree to defer such conclusion until the time of delivery. The contract may be established by all means of
proof.
2- The receipt by the carrier of the carried item shall be deemed as an acceptance from him of the offer made by the consignor.
3- In boarding the means of transport, the passenger is considered to have accepted the offer made by the carrier, unless it is
established that the passenger's intention was not to conclude a transport contract.
Article 274
1- Where the carrier uses different forms of contracts and the two parties have not agreed to adopt a specific form, the
contract is deemed concluded according to the form including the general conditions.
2- Where the two parties agree to adopt a specific form, the conditions stated therein shall be indivisible.
Article 275
1- Where the carrier holds a preferential right in transport or over the exploitation of specific lines of transport, he shall be
bound to accept all the applications submitted to him, except where an application is contrary to the prescribed transport
conditions or where it is impossible for the carrier to execute it for reasons beyond his control.
2- Where the applications exceed the capacity of the transport means that the carrier is licensed to use, he shall accept such
applications according to their dates of submission, so that the application first submitted shall have precedence over
subsequent applications, unless some of such applications have priority pursuant to the transport conditions.
Article 276
The carrier's liability shall extend to his acts and those employed by him should they be performed in the course of rendering
their services. Shall be considered a subordinate, every person employed by the carrier for the performance of his obligations
under the transport contract.
Article 277
1- In the execution of the transport contract, explosion of the transport means, their burning, derailing, collision or any other
accident attributed to the tools and machines used by the carrier in the performance of the transport, shall not be considered
force majeure, even if the carrier establishes that he has adopted precautionary measures to guarantee the suitability of said
transport means for work and to prevent the damage that may occur.
2- Neither shall be considered a force majeure, the accidents attributed to sudden death, or physical or mental weakness which
befall the carrier's employees at work, even if the carrier proves that he had taken precautionary measures to guarantee their
physical and mental fitness.
Article 278
The carrier shall not be liable to compensate any damage arising from transport disruption or deviation from its routing in
order to provide assistance to any sick, injured or endangered person.
Article 279
1- In the performance of the transport contract, fraud shall mean every act or omission committed by the carrier or the
persons employed by him with the intent to cause damage.
2- Gross fault shall mean every act or omission committed by the carrier or the persons employed by him with imprudence
coupled with awareness of the damage that may result therefrom.
Chapter 2 - Contract of Personal Property Transport
Article 280
1- The consignor shall be required to provide the carrier with the particulars concerning the recipient's name and address,
destination of the transport, type of items intended for transport, as well as their value, weight, volume, quantity, mode of
packing and wrapping, number of parcels included, and any other particulars as are sufficient to identify the item required to
be transported, in addition to the delivery term and the route to be followed.
2- The consignor shall be accountable for any damages arising from the false or insufficient data provided by him.
Article 281
1- The bill of lading shall contain, in particular, the following data:
a- Date of the bill and the place of its issuance.

b- Names and places of residence of the consignor, recipient, carrier and the transport commission agent, if any.
c- Places of departure and destination.
d- The particulars related to the identification of the items carried and their value.
e- Date fixed for execution of the transport.
f- The freight and other expenses indicating whether they are payable by the consignor or the recipient.
g- Freighting and unloading conditions, type of transport means required to be used for transport, the route to be
followed, determination of liability and any other special conditions that may be included in a transport contract.
2- The bill of lading may be issued in the name of a specified person, to his order or to bearer.
3- The bill of lading shall be handled according to the rules governing assignment of right, if issued to a named person, by
endorsement, if issued to order and by delivery where it is issued to bearer, without this meaning the transport of the goods or
possession thereof.
Article 282
1- The consignor may require the carrier to hand him a copy of the bill of lading.
2- Where no bill of lading is issued, the consignor may require the carrier to give him a receipt signed by the latter evidencing
the receipt of the item being carried. Such receipt shall be dated and shall include the sufficient particulars to identify the
carried item and the freight charges.
Article 283
The bill of lading and the receipt issued and signed by the carrier evidencing the receipt of the carried item shall constitute a
proof that the particulars stated therein are correct. Any person contesting such particulars shall have to prove the contrary.
Article 284
1- The rights and obligations arising from the transport contract shall not bind the recipient unless he accepts such rights and
obligations either expressly or implicitly.
2-The receipt by the recipient of the bill of lading or of the carried item, as well as claiming its handing over or issuing
instructions to this effect, shall be deemed as a tacit acceptance of the rights and obligations arising from the transport
contract.
Article 285
1- The consignor shall deliver to the carrier the item to be carried and the documents necessary for the execution of the
transport. The consignor shall be accountable where such documents are insufficient or not conformant to the truth, and he
shall as well be liable for the loss of such documents or, in case of negligence, in using them or in case of abuse thereof.
2- Where the transport requires special preparations, the consignor shall notify the carrier accordingly within sufficient time
prior to the delivery of the item to be carried.
3- Handing over shall take place at the place of business of the carrier, unless otherwise agreed.
Article 286
1- Where, owing to the nature of the item to be carried, special preparations should be made for its transport, by wrapping it,
packing or strapping, the consignor shall have to take such precautions to protect it from perishing or being damaged and
would not expose the other persons or items carried with it to injury or damage respectively. If transport is conditioned by a
specific mode of packing, wrapping or strapping, the consignor shall be required to abide by such conditions.
2- The consignor shall be further liable for the damages arising from the defect in packing, wrapping or strapping and the
carrier shall be jointly responsible with the consignor for such damages if he has accepted to perform the transport with his
knowledge of such defects. The carrier shall be deemed to be aware of the defect where it is apparent or where it is obvious to
an ordinary carrier.
3- The carrier may not exonerate himself from the liability for the damage or loss of one of the items carried, by proving that
the damage has arisen from a defect in the packing, wrapping or strapping of another item. Any agreement to the contrary
shall be void.
Article 287
1- The carrier shall have the right to examine the items to be carried, in order to verify their condition and the authenticity of
the particulars provided by the consignor in this respect.
2- Where such an examination requires the opening of the wrappings or containers, the consignor shall be notified to attend
the examination. Where the consignor fails to show up on the fixed date, the carrier may effect the examination in his absence
and, unless otherwise agreed, have recourse against the consignor for the examination costs.
3- Where the examination shows that the condition of the item does not allow its transport without damage, the carrier may
refuse to transport it or may carry it after taking from the consignor a declaration that he is aware of the condition of the item
to be carried and that he agrees to its transport. In such case, the bill of lading shall state the condition of the item and the
consignor's declaration.
Article 288
The receipt by the carrier of the items to be carried without any reservations shall constitute evidence that he received them in
good condition and in conformity with the particulars stated in the bill of lading. Should the carrier claim the contrary, he
shall have to prove the same.
Article 289
1- The carrier shall ship the item to be carried and stack it on board of the ordinary means of transport, unless otherwise
agreed upon.
2- Where the consignor requires that the freighting be made on board a specific type of means of transport, the carrier shall
not be held liable for the damage resulting from the use of such type of transport, unless it was due to a fault committed by
him or his employees.
Article 290
1- The carrier shall follow the route agreed upon, and in the absence of an agreement for a specified route, the carrier shall
take the shortest route.
2- The carrier may change the route agreed upon or take a longer one where a necessity arises compelling him to do so. In such
case, the carrier shall bear no responsibility for the delay and other damages which may result from the change of route, unless
fraud or gross fault is established on his part or on the part of his employees.
Article 291
1- The carrier shall be responsible for the safety of the item during the execution of the transport contract.
2- Where the safekeeping of the item during transport necessitates re-strapping, repair of the wrappings, increase or decrease
thereof or any other necessary measures, the carrier shall perform this and pay any costs required therefore, unless otherwise
agreed. Notwithstanding the foregoing, and unless otherwise agreed, the carrier shall not be bound to take any extraordinary
measures in the transport such as supply food and water to animals, provide medical services or other services or irrigate the
plants.
Article 292
1- The carrier shall unload the item on arrival, unless this is carried out by the recipient or another person pursuant to an
agreement, a law, a regulation or instructions. In such case, the carrier shall not be liable for any damages resulting from the
unloading.
2- In all cases, the carrier shall bear the unloading costs unless otherwise agreed.
Article 293
1- If delivery is not required at the place of the recipient, the carrier shall notify him of the arrival of the carried item and of
the time on which he may receive the same.
2- The recipient shall receive the item on the date fixed by the carrier, otherwise he shall bear the storage fees. Upon expiry of
the date set for delivery, the carrier may carry the item to the recipient's place against an additional freight charge.
3- The recipient shall examine the item before receiving it, and if the carrier refuses to avail him from exercising this right, the
recipient may refuse to receive the same.
Article 294
1- If the item to be carried is still in the possession of the carrier, the consignor may order him to refrain from executing the
transport, to stop it or to return the item to him. He may also ask him to direct it to a person other than the original recipient,
or to any other place, or issue any other instructions, provided that the consignor pays the freight charges and expenses of that
part already transported and compensate the carrier for any damage he may have sustained as a result of the new instructions.
If the consignor has received a copy of the bill of lading, he shall return it to the carrier so that he enters therein the new
instructions signed by the consignor, failing which, the carrier may refrain from executing such instructions.
2- The right to issue instructions concerning the carried item, shall pass on to the recipient upon receiving the bill of lading or
upon express or implied acceptance of the transport contract. In this case, as well, the bill of lading should be returned to the
carrier to enter therein the new instructions signed by the recipient, failing which the carrier may refrain from executing these
instructions.
3- No new instructions related to the item to be carried may be issued, after its arrival and after notice is given to the
consignee to receive it or to appear to receive it.
Article 295
The carrier shall execute the instructions issued to him by whoever is entitled to give them, pursuant to the provisions of
Article (294) of this Law, unless the transport conditions prohibit same, or unless it is impossible for the carrier to execute
such instructions. The same applies if execution of these instructions would cause a disturbance in the traffic, or if the value of
the carried item is not sufficient to cover the expenses incurred by the carrier due to the execution thereof. In all such cases,
the carrier shall notify the person who issued the new instructions of his abstention from executing them and the reason for
such abstention. This abstention shall not entail the liability of the carrier unless unjustified.
Article 296
1- If an obstacle prevents the commencement of transport, or if the transport is disrupted during its execution, or if the
recipient does not appear to receive the carried item, or if he appears but refuses to receive it or pay the freight charges or
expenses due, the carrier shall notify the consignor accordingly and seek further instructions. As an exception to the
provisions of Article (294) of this Law, the carrier shall in this case implement the instructions received by him from the
consignor, even if he fails to return the copy of the bill of lading given to him by the carrier.
2- If the carrier does not, in due time, receive the instructions of the consignor, he may ask the court to ascertain the condition
of the item and authorise him to deposit it with a trustee for the account and at the responsibility of the consignor.
3- Where the item is subject to damage, deterioration or devaluation, or if its maintenance costs are exorbitant, the court may
order that it be sold in the manner prescribed by it and the price be deposited with the court treasury for the account of the
concerned parties.
Article 297
The consignor shall pay to the carrier the freight charges and the other costs that may accrue, except where it is agreed that
they be borne by the recipient, in which case, both the consignor and the recipient shall be jointly liable to pay them to the
carrier.
Article 298
The carrier shall not be entitled to receive freight charges on account of items that perished due to a force majeure.
Article 299
1- If a force majeure prevents the execution of transport no freight shall accrue to the carrier. However if said force majeure
obstructs its completion, the carrier shall be entitled to receive the freight for the transported part.
2- Under all circumstances, a carrier may claim payment of the freighting and unloading costs and other necessary expenses.
Article 300
The payer shall have the right to claim redemption of the sum paid over and above the agreed freight, or that stipulated in the
transport conditions.
Article 301
1- The carrier may retain the carried item until payment of the freight, expenses and other amounts due to him because of the
transport.
2- The carrier shall have a privilege on the price resulting from the forced execution over the carried items in order to pay the
freight and other sums that are due to him because of the transport. The provisions related to the execution procedures on
commercially mortgaged items shall apply in this regard.
Article 302
1- From the moment the carrier receives the item to be carried, he shall be liable for its total or partial loss, deterioration and
delay in delivery.
2- The item shall be deemed totally damaged if the carrier fails to deliver it or to notify the recipient to take over the same
within thirty (30) days from the expiry of the date fixed for delivery or as of the expiry of the period required to an ordinary
carrier to execute the transport under the same circumstances.
Article 303
The carrier shall not be liable for the damage or deterioration of the item after delivery thereof to the recipient, to the customs
authority agreed upon or to the trustee appointed by the court as depositary of the item, except where fraud or gross fault is
established on the part of the carrier or his employees.
Article 304
1- The carrier shall not be accountable for any usual decrease in weight or volume that occurs to the item during transport,
owing to its nature, unless it is proved that such decrease is attributed to another cause.
2- Where the bill of lading covers several items divided into groups or parcels, the decrease allowed shall be determined on
basis of the weight of each group or parcel, in case such weight has been specified separately in the bill of lading or if it could
have been determined.
Article 305
Where the item is carried under the custody of the consignor or recipient, the carrier shall not be liable for its damage or
deterioration, unless fraud or gross fault is proved on his part or on the part of his employees.
Article 306
The carrier may not exonerate himself from liability regarding the damage or deterioration of the item, or the delay in
delivering it, except where he proves a force majeure, a defect inherent to the item carried, a fault committed by the consignor
or recipient, or an act of the management.
Article 307
1- Any provision exonerating the carrier from liability for total or partial perishing or deterioration of the item, shall be null
and void; also, any provision exonerating the carrier from said liability if arising from the acts of his employees shall be null
and void. Any condition that binds the consignor or recipient, in any capacity whatsoever, to pay all or part of the cost of
insurance against the carrier's liability, shall be deemed exoneration from liability.
2- The carrier, however, may stipulate his total or partial exoneration from liability for delay.
Article 308
1- The carrier may put as a condition the limitation of his liability for the total or partial perishing or deterioration of the item,
provided that the compensation agreed upon shall not be fictitious and remains subject to the court's estimation in case of
conflict.
2- The conventional compensation shall not be due, if the carrier proves that the recipient did not sustain any damage.
3- Where the damage value is less than the amount of the conventional compensation, the judge may reduce such amount to
make it equivalent to the damage value. Should the damage exceed the conventional compensation amount, it is not
permissible to claim more than such amount, unless it is established that the carrier or his employees have committed fraud or
a gross fault, in which case the carrier shall be bound to compensate for the damage in full.
Article 309
The condition for limitation of, or exoneration from, liability for delay shall be in writing, otherwise it shall be considered as
null and void. If the transport contract is made out on printed forms, the said condition shall be clear and written in a manner
that draws the attention, failing which the court may consider it null and void.
Article 310
The carrier may not avail himself of the condition of limitation of, or exoneration from, liability for delay where fraud or gross
fault is proved on his part or on the part of his employees.
Article 311
1- Where the item to be carried perishes or deteriorates and its value is not indicated in the bill of lading, the compensation
shall be estimated on basis of its real value at the venue and time of arrival, unless otherwise stipulated by law or agreement.
Except where the perishing is total, the compensation shall be estimated while taking into account the value of the allowed
decrease in pursuance to the custom.
2- Where the value of the carried item is indicated in the bill of lading, the carrier may contest such value and prove, by all
means of evidence, the real value of the item.
3- With the exception of the two cases of fraud and gross fault committed by the carrier or his employees, the carrier shall not
be liable for the loss of the item entrusted to him for transport, where such item consists of money, bonds and securities,
jewellery or any other valuable object, except to the extent of the express written particulars provided by the consignor at the
time of delivery.
Article 312
1- Compensation for total perishing and compensation for delay may not be cumulated.
2- Compensation for total perishing shall include the value of the perished item and every loss incurred by the claimant for
compensation due to perishing.
3- Compensation for delay may not be adjudged in case of partial perishing except for the part which did not perish.
4- Under all circumstances, the compensation adjudged may not exceed the amount which would accrue in the event of total
perishing of the item.
Article 313
Where the item deteriorates, perishes in part or its delivery is delayed, so that it may no more serve its purpose and if the
carrier's liability for such deterioration, perishing or delay is established, the claimant for compensation may abandon the item
to the carrier against compensation to be estimated on basis of the total perishing of the item.
Article 314
1- Where the compensation is paid due to the perishing of the item, and, within one year of such payment, the item is found,
the carrier shall immediately notify the person who received the compensation, informing him of its condition and inviting
him to inspect it at the place where it was found, the place of departure or the place of destination whichever is convenient to
him.
2- If the person who received the compensation fails to send his instructions within fifteen (15) days of his notification, or if
he sends them but fails to appear on the date fixed by the carrier for inspection, or if he appears but refuses to redeem the
item, the carrier may then dispose of the same.
3- Where the person who received the compensation requests that the item be redeemed to him, he shall reimburse the
compensation received after deduction of the expenses of the claim and a sum equivalent to the damage sustained due to the
delay in delivering the item.
Article 315
1- Receipt of the carried items and payment by the consignee of the freight shall invalidate any lawsuit against the carrier if
the defect that had occurred thereto is apparent. However, if such defect is not apparent, it may be proved, but the lawsuit
lodged for said defect shall be admitted only if notice is served, in respect thereof, within seventy-two (72) hours from the time
of receipt, and if the claim is submitted to the court within thirty (30) days.
2- The condition of the goods shall be proved either by the competent authorities or by an expert summarily appointed by the
court.
3- The provisions of this Article shall not apply where it is proved that the defect was a result of fraud or gross fault committed
by the carrier or his employees, or where it is established that the carrier and his employees have intentionally concealed the
defect.
4- The receipt of movable items that were contracted upon with or through modern technology shall be subject to the rules
and provisions prescribed in the legislation regulating the same.
Article 316
1- Where several carriers undertake successively the performance of one transport contract, the first carrier shall be liable
towards the consignor and the recipient for the whole operation. Any provision to the contrary shall be null and void.
2- Each of the carriers, subsequent to the first, shall not be liable towards the latter or towards the consignor or recipient,
except for the damage that has occurred in that part of transport performed by him. Where it is impossible to determine the
part during which the damage occurred, the compensation shall be divided between all the carriers in proportion to each
carrier's share in the freight, and in case one of such carriers is insolvent, his share shall be divided between the others in the
same proportion.
3- The carrier who proves that the damage did not occur during the part of transport executed by him shall be exonerated from
liability.
Article 317
Each of the consecutive carriers may require that the item be examined and its condition established on delivery thereof to
him by the previous carrier. Where he receives it without making reservations, it shall be assumed that he received it in good
condition and conform to the particulars stated in the bill of lading, until the contrary is proved.
Article 318
The last carrier shall be responsible towards the preceding ones for claiming payment from the recipient of the sums due on
the transport. He shall have the right to collect such sums on their behalf and take all the legal procedures for collection
thereof, including the use of the right of retention of the item and the right of lien over the item that is subject of transport.
Article 319
The following shall not be heard upon denial and lack of legitimate excuse:
1- The lawsuits lodged against the carrier, because of delay, perishing or damage arising from the transport contract of items,
after the lapse of six (6) months in respect of transport inside the State, and after the lapse of one year in respect of overseas
transport, as of the date of delivery of the item to the consignee, the customs or to the trustee appointed by the court as
depositary of the item. In case of total perishing of the carried item, the period shall start from the expiry of the date
stipulated in Clause (2) of Article (302) hereof.
2- The lawsuit lodged by one carrier as a recourse against the consecutive carriers pursuant to Clause (2) of Article (316), after
the lapse of sixty (60) days of the date of payment of the compensation or of the date on which official claim for compensation
has been filed.
Article 320
Whoever, he or his employees, commit fraud or gross fault may not oppose the plea of "non-hearing" stipulated in Article
(319) hereof.
Chapter 3 - Passenger Transport Contract
Article 321
1- The passenger shall pay the fare on the date agreed, or the date stated on the transport regulations or as is customary; he
shall further abide by the carrier's instructions in respect of the transport.
2- The carrier undertakes the transport of the luggage carried by the passenger during the trip, and the passenger shall not be
bound to pay any fare for the transport of such luggage, provided they do not exceed the limit set in the transport tariff or the
customary limits.
Article 322
1- Where a force majeure prevents the commencement of transport or where before execution thereof, circumstances occur
rendering the transport a danger to people's lives, the carrier shall not be liable to compensate the non-execution, neither
shall he be entitled to receive the fare for the same.
2- Where the force majeure or the danger to people's lives arise after commencement of execution of the transport, the carrier
shall receive only the fare due for that part of transport which was executed.
Article 323
Where transport is impossible because of the death or illness of the passenger or due to other compelling impediments, the
transport contract shall be rescinded and the fare shall not be payable.
Article 324
1- Where the passenger renounces to travel prior to its commencement, he shall notify the carrier of his renunciation before
the date set for execution of the transport and, in case of extreme necessity, such notice may be given on the said day.
2- Where notification is effected according to Clause (1) of this Article, the carrier shall not be entitled to a transport fare.
However, he may claim compensation of the damage sustained by him because the passenger has renounced to travel.
Article 325
Where the passenger renounces the idea of pursuing the trip after its commencement, the full fare shall be payable, unless his
renunciation is attributed to extreme necessity, in which case he shall only pay the fare corresponding to the executed part of
transport.
Article 326
Unless otherwise agreed, and without prejudice to the provisions of Articles (324) and (325), where the passenger fails to
appear on the time fixed for transport, he shall pay the full fare and he may, whether he paid the full fare before or after the
date fixed, require that the transport be executed on a later date.
Article 327
1- Where transport is cancelled prior to commencement or completion thereof due to a reason attributable to the carrier, his
employees or the means of transport used by him, the passenger shall not be bound to pay the fare, without prejudice to his
right for compensation if necessary.
2- Where transport is disrupted after commencement for a reason attributed to the carrier, his employees or the means of
transport used by him, the passenger may renounce to pursue the trip and the carrier shall, in this case, bear the costs of
carrying the passenger to the place agreed. However, the passenger may choose to wait until the transport traffic resumes and
he shall not be required in such case to pay any additional fare.
Article 328
Assignment of the transport ticket shall be admissible before execution of the transport, unless the ticket is in the passenger's
name or it is issued to him for special considerations.
Article 329
1- The carrier shall prepare for the passenger a seat in the class agreed upon, and the latter may recover from the carrier the
difference in case he is compelled to travel in a lower class than the one indicated on his ticket.
2- Where the passenger pays an additional fare in consideration of special advantages, he may claim that such additional fare
be reimbursed to him if the carrier fails to provide the corresponding advantages.
Article 330
1- The carrier may withhold the passenger's luggage to secure payment of the fare and the cost of food or other things
provided to him during the performance of the transport contract.
2- The carrier shall have a priority right over the price of the passenger's luggage to recover the cost of transport and other
sums that are due to him because of the transport. The provisions related to the execution procedures on commercially
mortgaged items shall apply in this regard.
Article 331
1- The carrier shall carry the passenger and his luggage up to the place of destination on the date agreed upon, and if no date
is specified then within the time limit required by an ordinary carrier had he been in the same circumstances.
2- The carrier may, prior to transport commencement or during the trip, examine the passenger's luggage in his presence, to
ensure their conformity to the transport conditions.
Article 332
1- The carrier shall secure the safety of the passenger for the duration of the performance of the transport contract, and any
agreement exonerating the carrier from such liability shall be null and void.
2- Performance of the transport contract shall cover the period between the moment the passenger starts to board the means
of transport at the place of departure, until he disembarks at the place of arrival. Where there are quays or platforms for the
means of transport to lay by, the performance of the contract shall cover the period between the moment the passenger
embarks the quay or platform at the place of departure and his exit therefrom at the place of arrival.
3- Where necessity arises during the trip to change the means of transport, the liability shall not cover the period of transfer of
the passenger from one means of transport to another that is not in the custody of the carrier or his employees.
Article 333
1- The carrier shall be liable for the delay in arrival and for such physical or non-physical injuries sustained by the passenger
during the performance of the transport contract.
2- The carrier shall not be exonerated from the liability, stipulated in Clause (1) of this Article, unless he proves that the delay
or injury is due to force majeure or to the passenger's or third party's fault.
Article 334
1- Any provision fully or partially exonerating the carrier from liability in regard to physical injuries sustained by the
passenger, shall be null and void.
2- Any condition which aims to make the passenger, in any way, pay all or some of the insurance expenses against the carrier's
liability shall be deemed as being an exoneration from liability.
Article 335
1- The carrier may put as a condition his total or partial exoneration from liability for the delay of the passenger’s arrival and
for other than the physical injuries which may be sustained by him during transport.
2- The condition for exoneration from liability shall be in writing, otherwise it shall be considered as null and void. If the
transport contract is made out on printed forms, the said condition shall be clear and written in a manner that draws the
attention, failing which the court may consider it null and void.
3- The carrier may not avail himself of the condition of exoneration from liability or part thereof where fraud or gross fault is
proved on his part or on the part of his employees or agents.
Article 336
1- The passenger shall guard the luggage and animals which he is permitted to carry with him, and the carrier shall not be
liable for any loss or damage which may occur thereto, except where the passenger proves that such loss or damage is due to
fault of the carrier or his employees.
2- The passenger shall be liable for the damage caused to the carrier or to third parties as a result of the luggage or the animals
which he carries with him.
3- As for the luggage that are delivered to the carrier, transport thereof shall be governed by the provisions stipulated in
relation to the transport of items.
Article 337
1- Where a passenger dies or falls ill in the course of performance of the transport contract, the carrier shall take such
measures as are deemed necessary to safeguard his luggage until they are delivered to the concerned parties.
2- Where any of the concerned parties is present at the place of occurrence of death or illness, he shall be entitled to intervene
to supervise the measures adopted by the carrier to safeguard the luggage and to request from the carrier to deliver a
declaration that the passenger's luggage are in his custody.
Article 338
The heirs and dependents of the passenger, to whom he is indebted to alimony, may lodge a lawsuit for liability arising from
the transport contract, in case of death whether the death occurred directly after the accident or after the lapse of a specified
period.
Article 339
The liability of the carrier for the death or physical injury of the passenger shall be determined by the amount of the diya of
the person who died by mistake according to the legislation in force in the State, and it shall be permissible to agree to
determine such amount to not be less than the amount of diya.
Article 340
1- The liability lawsuit arising from the death of the passenger or his physical injury shall not be heard after the lapse of (3)
three years from the day of death or accidental injury or from the date of knowledge of its cause.
2- Every other lawsuit arising from the passenger transport contract shall not be heard after one year has elapsed from the
date determined for arrival, and if no determination has been made, then from the time that the ordinary carrier would have
taken to arrive if under the same circumstances.
3- Whoever, he or his employees, commit fraud or gross fault may not oppose the plea of "non-hearing" stipulated in this
Article.
Chapter 4 - Transport Commission Agency
Article 341
1- The transport commission agency is a contract by which the agent undertakes to enter into a transport contract in his own
name and for the account of his principal, and where necessary, to carry out the operations related to such transport against a
commission he receives from the principal. The transport commission agent shall be, towards the consignor, in the same
position as a carrier.
2- If the commission agent undertakes transport by his own means, he shall be governed by the provisions of the transport
contract, unless otherwise agreed upon.
Article 342
With the exception of the provisions stipulated in this Chapter, the provisions of commission agency shall apply to the
transport commission agency.
Article 343
The principal may, at any time, cancel the transport order before the commission agent enters into the transport contract, in
which case he shall be bound to reimburse to the commission agent, the expenses incurred by him and compensate him for
any work performed.
Article 344
1- The transport commission agent shall execute his principal's instructions, and in particular those instructions related to the
date of transport, the selection of the carrier, the transport means and the route to be followed.
2- The commission agent may not charge his principal’s account any freight exceeding the one agreed upon with the carrier.
Any advantages obtained from the carrier by the commission agent shall benefit the principal, unless otherwise agreed upon in
the agency contract or dictated by custom.
Article 345
The transport commission agent shall guarantee the safety of the passenger or the carried item, and any agreement to the
contrary shall be null and void.
Article 346
1- In the transport of goods, the transport commission agent shall as of the time of receiving the goods be wholly or partly
liable for the perishing, damaging or delay in the delivery of such goods. He may not deny his liability, unless he proves a force
majeure, an inherent defect of the goods, or a fault of the principal or the recipient.
2- In the transport of persons, the commission agent shall be liable for the delay in arrival, and for physical or non-physical
injuries as are suffered by the passenger in the course of executing the transport contract. The commission agent may not deny
his liability, except by proving a force majeure or a fault committed by the passenger. The liability of the commission agent for
the death or physical injury of the passenger shall be determined by the amount of the diya of the person who died by mistake
prescribed according to the legislation in force in the State, and it shall be permissible to agree to determine such amount to
not be less than the amount of diya.
3- In all cases, the commission agent may have recourse against the carrier where relevant.
Article 347
1- Any provision fully or partially exonerating the transport commission agent from liability in regard to physical injuries
sustained by the passenger, shall be null and void.
2- Any condition which aims to make the passenger, in any way, pay all or some of the insurance expenses against the
commission agent's liability shall be deemed as being an exoneration from liability.
Article 348
1- The transport commission agent may put as a condition his total or partial exoneration from liability for the perishing or
destruction of the carried item or the delay of the passenger’s arrival and for other than the physical injuries which may be
sustained by him during transport.
2- The condition for exoneration from liability shall be in writing, otherwise it shall be considered as null and void. Where the
commission agency contract is made out on printed forms, the said condition shall be clear and written in a manner that draws
the attention, failing which the court may consider it null and void.
3- The transport commission agent may not avail himself of the condition of exoneration from liability or part thereof where
fraud or gross fault is proved on his part or on the part of his employees or the carrier or his employees.
Article 349
1- The principal and passenger shall each have direct right of recourse against the carrier to claim the rights arising from the
transport contract. The carrier shall also have direct right of recourse against each of the principal and passenger to claim such
rights. In all cases, the transport commission agent shall be summoned as a party in the lawsuit.
2- The passenger in the transport contracts of persons and the recipient in the transport contract of items shall have direct
right of recourse against each of the principal, carrier and transport commission agent with respect to the rights arising from
the transport contract.
Article 350
If the transport commission agent pays the transport fare to the carrier, he shall replace him in his rights.
Article 351
The original transport commission agent is a guarantor of the transport commission agent appointed by him, except where the
consignor has appointed the intermediary agent in his agreement with the original agent.
Article 352
The provisions of Articles (319), (320) and (340) hereof shall apply to non-hearing of lawsuit emerging from transport
commission agency contract.
Chapter 5 - Special Provisions of Air Transport
Article 353
1- Within the provisions of this Law, air transport shall mean the transport of persons, luggage and goods by aircraft in
consideration of a fare.
2- Luggage referred to in Clause (1) of this Article shall mean the items which the passenger is allowed to carry with him in the
aircraft or which are delivered to the carrier for safe custody during the travel.
Article 354
Without prejudice to the international conventions to which the State is a party, the provisions of this Title shall apply to air
transport, with due consideration to the special provisions stipulated in the following Articles.
Article 355
The air carrier shall be held liable for the damages sustained as a result of a passenger's death, wound or physical injury
occurring during air transport or during any of the operations of the passenger's boarding to, or disembarkation from the
aircraft.
Article 356
1- The air carrier shall be held liable for the damages sustained due to the perishing, loss or damage of the registered luggage
and goods, if the accident that caused such damage occurred during the air transport.
2- The air transport shall include the period when the luggage and goods are in the custody of the carrier during the flight or
during the presence of the aircraft at the airport or in any place where the aircraft has landed.
3- The air transport shall not cover the period during which the luggage or goods are carried by land, sea or river outside the
airport. However, where such transport is necessary to ship the luggage or goods, to deliver or transfer them from one aircraft
to another, in implementation of an air transport contract, it shall be presumed, until otherwise established, that the damage
resulted from an accident that occurred during the air transport period.
Article 357
The air carrier shall be held liable for the damage caused by the delay in the arrival of the passengers or the registered luggage
or the goods.
Article 358
The air carrier shall not be liable for the small personal belongings which are retained in the custody of the passenger during
the travel and for which the carrier is not answerable unless the passenger proves that the carrier or his employees failed to
take the necessary measures to prevent the occurrence of the damage.
Article 359
1- In case of transport of persons, the compensation, to which the carrier is condemned to pay in case of the passenger’s death
or injury, may not be less than the amount of the prescribed diya, but it may exceed this amount by mutual agreement.
2- In case of transport of luggage and goods, the compensation amount may not exceed AED 500 (Five Hundred Dirhams) for
each kilogramme, unless it is agreed to exceed this sum. Nevertheless, where the consignor on delivering the luggage or goods
submits a specific statement indicating that he attaches special importance to the delivery of the same in safe condition at the
place of arrival, due to its value, and if he pays such additional freight as required by the carrier for the same, the carrier shall
be bound to pay compensation according to the value indicated by the consignor, except where the carrier proves that such
value exceeds the real value of the luggage and goods.
3- Where one parcel is lost, damaged or delayed and this has an effect on the value of the other parcels covered by the same
transport application form, the total weight of such parcels shall be taken into consideration upon determination of the extent
of liability.
4- Regarding personal or small articles that remain in the custody of the passenger during the flight, the compensation
adjudged to each passenger for the perishing or damageof such articles, may not exceed AED 5,000 (Five Thousand Dirhams).
5- The air carrier may not avail himself of the limitation of liability, as stipulated in this Article, where it is proved that the
damage was the result of an act or omission by the carrier or his employees, either with intent to cause damage or due to
imprudence coupled with awareness that a damage might result therefrom. Where the act or omission is committed by the
employees, it shall be also established that it was committed in the course of performance of their duties.
Article 360
The air carrier shall be held liable within the limits set in Article (359) of this Law, irrespective of the capacity of the litigants
in the liability lawsuit.
Article 361
1- Where an action for compensation is brought against one of the carrier's employees, he may plead the limitation of liability
stipulated in Article (359) hereof, where it is proved that the act which caused the damage was perpetrated by him during the
performance of his services.
2- No employee of the carrier may plead the limitation of liability, where it is established that the damage was the result of an
act or omission by him, either with intent to cause damage or with imprudence coupled with awareness that a prejudice is
likely to result therefrom.
Article 362
1- The airway bill shall contain a statement that the transport is being made in accordance with the limited liability provision
stipulated in Article (359) hereof, otherwise the carrier or his employees shall not have the right to avail themselves of such
provisions.
2- Any condition exonerating the air carrier from liability or determining it at less than what is specified in Article (359)
hereof, shall be null and void, except where the carried item has perished or has sustained damage due to its nature or to an
inherent defect.
Article 363
Where the recipient receives the luggage or goods at the place of arrival without reservation, it shall constitute a presumption
that he has received them in good condition and in conformity with the conditions of the airway bill, unless proved otherwise.
Article 364
1- Where the luggage or goods arrive damaged, the recipient shall serve a notice on the carrier immediately upon discovery of
the damage within no more than seven (7) days, in respect of luggage, and fourteen (14) days in respect of goods, from the date
of their receipt. In case of delay, the notice shall be sent within twenty-one (21) days at the most from the day on which the
luggage or goods are placed at the disposal of the recipient.
2- The notice may be addressed in the form of an objection as a protest written in the airway bill upon receiving the luggage or
goods.
3- The liability lawsuit against the carrier shall not be admitted if the notice is not served within the time limits specified in
this Article, unless the plaintiff proves that the carrier or his employees have exercised fraud or deceit in order to evade such
time limits or to conceal the damage sustained by the luggage or goods.
Article 365
1- Where the transport is free of charge, the air carrier shall not be held liable, unless it is proved that he or his employees
have committed a fault, in which case the carrier shall be liable within the limits stipulated in Article (359) hereof.
2- The transport shall be deemed free of charge where it is performed without consideration and the carrier is not a
professional carrier. However, where the carrier is a professional one, the transport shall not be considered free of charge.
Article 366
The aircraft pilot may impose compulsory measures upon all the persons on board, and he may expel any person or remove
any item whose presence on board the aircraft may constitute a threat to its safety or good order.
Article 367
The air carrier shall be exonerated from liability if he proves that all the damage was due to the fault of the injured person. The
carrier's liability may be reduced by the court, where it is proved that the fault of the injured person has contributed to cause
the damage.
Article 368
The plaintiff shall have an option to file his lawsuit before one of the following courts:
1- The court within whose jurisdiction the carrier's domicile is situated.

2- The court within whose jurisdiction the head office of the carrier's activity is located.
3- The court within whose jurisdiction the carrier has an institution or a business concern which has concluded the
contract on his behalf.
4- The court of the place of destination.
Any stipulation amending the rules of jurisdiction referred to above, shall be null and void, if provided for before the
occurrence of the damage.
Article 369
In case of successive transport performed by several successive carriers, each carrier shall be deemed a party to the transport
contract in respect of the stage performed by him. However, the carrier having entered into a successive transport contract
shall assume the liability for the whole stage agreed upon in the contract, even if he has not personally performed it wholly or
partially.
Article 370
The right to bring the liability lawsuit against the air carrier or any of his employees may not be heard after the lapse of two
years from the day on which the aircraft arrived or was supposed to arrive, or from the day on which the transport was
interrupted.
Section 3 - Banking Operations

Title 1 - Bank Deposits, Transfers and Accounts
Chapter 1 - Bank Deposits
Article 371
1- A bank cash deposit is a contract by which one person delivers a sum of money, by any means of payment, to the bank that
undertakes to return it upon request or according to the conditions agreed upon.
2- The bank acquires ownership of the deposited money, and it shall have the right to dispose of it for its own activity, with an
2- The bank acquires ownership of the deposited money, and it shall have the right to dispose of it for its own activity, with an
obligation to return its equivalent to the depositor, in the same currency as that deposited.
Article 372
1- Unless otherwise agreed upon, the money deposit shall be due for restitution on demand and the depositor may at any time
dispose of the balance or any part thereof.
2- Such right may be made conditional upon the serving of a prior notice or the expiry of a specific period.
Article 373
Unless the deposit is intended for investment, a cash deposit shall be considered a debt and set-off may be made between a
cash deposit and a debt owed to the bank by the depositor. Any agreement to the contrary shall be null and void.
Article 374
If the bank issues a savings deposit book, it shall be in the name of the person in whose favour the book is issued. Deposits and
withdrawals shall be entered therein. The particulars entered in the book and signed by the bank official, shall constitute an
evidence for proving the said particulars, as between the bank and the person in whose favour the book was issued, and any
agreement to the contrary shall be null and void.
Article 375
Unless otherwise agreed upon, the deposits and withdrawals shall be made in the branch of the bank where the account was
opened or by the means and methods approved by the bank concerning the opening of the account by modern technological
means.
Article 376
Where the depositor has several accounts in one bank or in the same branch of a bank, each account is deemed as being
independent of the other, unless otherwise agreed.
Article 377
Taking into consideration the provisions of Article (391) hereof, a money deposit contract shall not vest the depositor with the
right to draw from the bank sums in excess of the deposited sums. Where the bank carries on operations that cause the
depositor's balance to be overdrawn, the bank shall immediately inform the depositor in order to adjust his situation.
Article 378
Unless otherwise agreed, the bank shall send to the customer a statement of his accounts once every month.
Article 379
The bank may open a joint account, including a deposit account, or any other account, for two or more persons equally among
them, unless otherwise agreed and proven by the bank and provided that the following provisions are complied with:
1- The joint account shall be opened by all its owners or by one person holding a power of attorney from the owners of
the joint account duly authenticated by an official competent authority. The method of withdrawal from such account
shall be determined in accordance with the agreement of the account owners.
2- Where the balance of a joint account's co-owner is seized, such seizure shall be valid on the distrainee's share of the
account balance as of the day on which the bank is served with the notice of the seizure. In such case, the bank shall
freeze withdrawals from the joint account up to the equivalent of the seized share. The co-owners of the joint account,
or whoever represents them, shall be informed of the seizure within a period not exceeding five (5) days as of the date
of imposing it.
3- If the bank offsets the various accounts of a co-owner of an account, it may not include such account in the set-off,
except with the written consent of the other co-owners.
4- Upon the death or legal incapacity of a co-owner of a joint account, the other co-owners shall notify the bank of
such incident within a period not exceeding ten (10) days from the date of death or incapacitation. The bank shall
thereupon freeze withdrawal from the joint account as of the date of notification within the limits of this person’s
share of the balance on the day of his death or incapacitation pending the appointment of his successor.
Chapter 2 - Bank Transfer
Article 380
1- The bank transfer is an operation according to which the bank enters a specified sum in the debit side of the person
ordering the transfer and the same amount in the credit side of another account, pursuant to a written order from the
transferor.
2- The following may be achieved through the above-mentioned operation:
a- The transfer of a specified sum from the account of one person to another person's account, each of whom having an
account with the same bank or in two different banks.
b- The transfer of a specified sum from one account to another, both of which are opened in the name of the transferor,
in the same bank or in two different banks.
3- The agreement between the bank and the customer ordering the transfer shall regulate the conditions of issue of the order
which, however, may not be made to bearer.
Article 381
If the bank transfer is effected between two branches of the same bank or between two different banks, every objection
emanating from third parties regarding such transfer shall be addressed to the branch or the bank where the beneficiary's
account is opened.
Article 382
The transfer order may be effected in respect of sums which are actually entered in the account of the transferor, or in respect
of sums which may be entered in such account within a specified period as agreed with the bank.
Article 383
It may be agreed that the beneficiary presents in person the transfer order to the bank where the account of the transferor is
opened, rather than it being notified to such bank by the said person.
Article 384
1- The beneficiary shall acquire ownership of the amount object of the bank transfer as of the time it is entered in the debit
side of the account of the transferor. The latter may revoke the transfer order until such entry is made.
2- If it is agreed that the beneficiary submits the transfer order to the bank in person, the transferor may not countermand the
transfer order, with due compliance to the provisions of Article (389) hereof.
Article 385
The debt in settlement of which the transfer is made shall remain outstanding with its securities and supplements until the
value has been actually entered in the credit side of the beneficiary's account.
Article 386
It may be agreed to postpone the execution of specified transfer orders, whether they were sent directly by the transferor or
presented by the beneficiary, until the end of the day in order to have them executed with other orders of the same type and
presented to the bank on the same day.
Article 387
1- If the balance of the transferor is less than the value indicated in the transfer order and the latter is issued directly by the
transferor, the bank may refuse to execute the order provided it notifies without delay the transferor of the same.
2- If the transfer order is presented by the beneficiary, and its value exceeds the transferor balance, the bank shall credit his
account with the partial consideration, unless rejected by the beneficiary. The bank shall annotate the transfer order with the
credit of the partial consideration or the beneficiary's refusal of the transfer.
3- If several beneficiaries present themselves to the bank at the same time and the value of the transfer orders held by them
exceed the balance of the transferor, they shall be entitled to require the distribution of such insufficient balance between
them, each according to his share.
4- If the bank refuses to execute the transfer order or the beneficiary refuses to accept the transfer of the partial consideration
in accordance with paragraphs (1) and (2) hereinabove, the transferor shall have the right to dispose of the balance of his
account.
5- In case the bank fails to execute the transfer order on the first working day following the day on which it was presented, the
order shall within the limits of the non-executed part, be considered as null and void and shall be returned to the person who
presented it against a receipt. Where an agreement is reached for a longer period, the transfer order that has not been
executed shall be added to the orders submitted on the following days.
Article 388
In case of death of the transferor, the bank shall, as of the date on which it has been informed of the death, stop the execution
of the transfer orders issued by him. If the beneficiary dies, the bank shall carry on with the execution of the transfer orders.
Article 389
1- If the beneficiary is adjudicated bankrupt, the transferor may stop the execution of the transfer order even if the beneficiary
has received it in person.
2- The adjudication of bankruptcy of the transferor shall not prevent the execution of the transfer orders issued by him if
submitted to the bank prior to the issuance of the judgement adjudicating bankruptcy, unless the court issues a decision
otherwise.
3- The provisions of the above-mentioned two paragraphs shall apply to the extent that they do not contradict the Bankruptcy
Law.
Title 2 - Current Account
Article 390
The current account is a contract between two persons pursuant to which the rights and debts arising from their mutual
relationship are converted into entries in the account, to be set off against each other, so that the final balance resulting upon
the closure of the account shall alone constitute a payable debt.
Article 391
1- The bank may open a current account for its customer where the operations carried out by the said bank are coupled with
the opening of a credit or the granting of credit facility in his favour.
2- It may be agreed that the account shall not be overdrawn from the customer's side thus resulting in a continuous credit
balance. It may also be agreed that said account shall be overdrawn on both sides, which means that it could have a debit or
credit balance with regard to both parties.
Article 392
In order to enter payments in a current account, the following conditions shall be met:
1- They shall be money or fungibles of the same nature in order to apply set-off between them.
2- They shall arise from verified debts and of a determined amount.
3- They shall be handed over to the payee on an ownership basis.
Article 393
Both parties may keep several current accounts, as long as each account is restricted to one specific type of operations or
currencies.
Article 394
A current account contract shall result in the following:
1- Transfer of ownership of the monies and funds delivered and entered in the current account to the recipient party.
2- The entry of a commercial paper in the account shall be valid provided that its value is not taken into account if it is
not paid on maturity date, in which case it may be returned to its owner and a counter entry is made in the manner
stipulated in Article (407) hereof.
3- Particulars, as a whole, entered in the current account, before closure of the account and extraction of the final
balance, shall be indivisible.
4- Set-off may not take place between one particular entry in the current account and another in the same account.
5- Particulars entered into the current account shall not forfeit the rights of both parties regarding contracts and
transactions from which such particulars resulted.
6- Unless otherwise agreed, each party to a current account may, at any time, dispose of his credit balance.
Article 395
1- All debts arising from business relations between both parties to the current account, shall be entered, by law, in the said
account, unless such debts are secured by legal or contractual securities.
2- Debts secured by contractual securities, whether they have been established by the debtor or a third party, may be entered
in the current account, if all the concerned parties have expressly agreed on such entry.
Article 396
1- If it has been agreed to enter a debt secured by a contractual security in the current account, such security passes to
guarantee the balance of the account on closure to the extent of the amount of the debt, regardless of any changes that may
occur to the account during its course of operation, unless otherwise agreed upon.
2- If the law provides for specific measures to be taken for contracting the security or for being opposed to third parties, such
security shall not pass to guarantee the current account balance and may not be used as evidence except from the date of
carrying out the said measures.
Article 397
If the debts due to either party are entered in the current account they shall lose their special characteristics and independent
existence and shall neither, thereafter, be susceptible to settlement separately, nor to set-off, trial or nonsuit.
Article 398
1- If the particulars of the current account include cash debts valued in various currencies or non-fungible items, both parties
may agree to have them entered in the current account, provided they are entered under separate sections taking into
consideration the similarity in the payments included therein and further provided that both parties declare that the current
account maintains its unity in spite of its several sections.
2- The balances of these separate sections shall be transferable so that it would be possible, within the time limit specified by
both parties or at the most when closing the account, to effect a set-off between the various sections to extract a single
balance.
Article 399
1- Payments made by the customer into the current account shall not bear interests unless otherwise agreed upon. Interests
shall be calculated based on the rate agreed upon. If the interest rate has not been fixed in the agreement, it shall be calculated
on basis of the rate prevailing in the market at the time of dealing, provided that it does not exceed 9%.
2- Interests shall apply to the debit balance as of the date of closure of the account, unless agreed otherwise.
Article 400
1- If a time limit has been fixed for the closure of the current account, it shall be closed upon expiry of the said time limit and
it may be closed before expiry thereof by agreement of both parties.
2- If a time limit is not set for the current account, it may be closed at any time at the will of either party, with due observance
of the notice periods agreed upon or according to custom.
3- In all cases, the account shall be closed upon the death or incapacity of the customer, or by adjudication of bankruptcy of
either party, or by the winding up of the legal person, crossing off of the bank from the list of banks operating in the State, or
upon the bank ceasing its operations.
Article 401
The current account, between the bank and its customer, shall be deemed closed at the end of the bank's fiscal year. Such
closing shall not be considered as a final closure of the account, but it shall remain open with its balance being carried forward
to the same current account. The said account shall resume functioning on the next working day.
Article 402
Where the current account is closed, the debit balance shall be deemed a debt immediately due, unless both parties agree
otherwise, or where some of the transactions that shall be entered into the account are still in process and if completed would
modify the balance. In this latter case, the debt shown in the balance shall fall due as of the working day following the last
entry required by such transactions.
Article 403
The general rules governing the non-admittance of the lawsuit because of the statute of limitation shall apply on the balance
of the debt and its interests.
Article 404
If the debt entered into the current account is extinguished or is reduced due to a cause subsequent to its entry therein, such
entry shall be cancelled or reduced, as the case may be, and the account amended accordingly.
Article 405
The creditor of either party to the current account may impose seizure on the credit balance of the debtor at the time of
imposing the seizure.
Article 406
1- If either party to the current account is adjudicated bankrupt, any mortgage made on his properties after the date fixed by
the court for the cessation of payments may not be invoked against the group of creditors, in order to guarantee the eventual
balance of the debt to the extent of the debit balance at the time when the mortgage is imposed.
2- The mortgage may be invoked against the body of creditors, as to the difference-if any- between the debit balance at the
time when the mortgage is decided and the balance at the time of closing the account, unless it is established that the
mortgagor was aware, when the mortgage was decided, that the debtor had ceased payment.
Article 407
1- If the proceeds of the discount of a commercial paper is entered in the current account but the value thereof is not paid on
the date of maturity, the person discounting the paper may cancel the entry of its value into the current account by a reverse
entry, even though the person who presented it for discount has been adjudicated bankrupt.
2- A cross entry shall mean the entry of a sum equal to the value of the commercial paper in addition to the expenses in the
debit side of the current account.
3- No reverse entry may be made except concerning the commercial papers that remained unpaid on their maturity dates. Any
Article 408
The lawsuit for the rectification of the current account shall not be heard upon denial and lack of legitimate excuse if the
request is based on an error, omission or repetition of entries and that for the entries made one year after the date of receipt of
the statement of account, unless, during this period, either party notifies the other that he maintains his right of rectification
of the account, or if the customer proves, regarding a current account opened with a bank, that throughout the said period he
did not receive from the bank any statement of account. In both cases, the lawsuit shall not be heard after five (5) years from
the date of closing the account.
Title 3 - Bank Credits
Chapter 1 - Bank Loan
Article 409
1- The bank loan is a contract according to which the bank delivers to the borrower a sum of money as a loan or enters such
sum in the credit side to his account with the bank according to the conditions and time limits agreed upon.
2- The banks shall obtain sufficient securities or guarantees for the granted loans.
3- The borrower shall repay the loan and its interests to the bank within the time limits and according to the conditions agreed
upon.
Article 410
The bank loan shall be considered an act of commerce irrespective of the capacity of the borrower or the purpose for which the
loan is allocated.
Chapter 2 - Bank Guarantee
Article 411
1- The bank guarantee is an undertaking issued by a bank to settle the customer's debt to a third party, in accordance with the
conditions agreed upon and included in the guarantee deed, and which may be for a definite or indefinite period.
2- The bank guarantee shall entail joint liability.
Article 412
The bank guarantee may be issued under different forms, among which:
1- Signing by the bank on a commercial paper as a standby letter of credit or giving such standby letter of credit on a
separate paper thus allowing the guarantee of several commercial papers together at one time.
2- Concluding an independent contract of guarantee.
3- A letter of guarantee is addressed by the bank to the customer's creditor pursuant to which the bank guarantees its
customer in the fulfilment of his obligations.
Article 413
The bank guarantee shall be considered an act of commerce irrespective of the capacity of the guaranteed person or the
purpose for which it is allocated.
Article 414
The letter of guarantee is an undertaking issued by the guarantor bank at the request of one of its customers (the person
making the order) to pay a certain specified or determinable sum to another person (the beneficiary), unconditionally and
without restrictions, unless the letter of guarantee states otherwise, where payment is requested within the period stated in
the letter. The letter of guarantee shall specify the purpose for which it has been issued.
Article 415
1- The bank may require the submission of a security or guarantee in consideration of issuing the letter of guarantee.
2- The security or guarantee may be in cash, commercial or financial papers, goods or an assignment to the bank by the
ordering person of his right towards the beneficiary.
Article 416
The beneficiary may not assign his right, arising from the letter of guarantee, to a third party unless with the bank’s approval.
Article 417
1- The bank may not refuse payment to the beneficiary for a cause related to the bank's relationship with the ordering person
or the relation of this latter with the beneficiary.
2- As an exception to Clause (1) of this Article, the bank may reject the settlement to the beneficiary if an enforceable judicial
order or judgement is issued to seize the guarantee amount at the bank. For the issuance of the order or judgement in such
event, the ordering person shall rely, in his request or claim, on serious and solid grounds.
Article 418
1- The bank shall be discharged from liability towards the beneficiary if within the validity period of the letter of guarantee no
request for payment is received from the beneficiary, unless it had been expressly agreed to renew such period prior to its
expiry.
2- The bank shall return to the ordering person the guarantees or securities it provided in exchange for the letter of guarantee
after the expiry of its validity period without fulfilling the amount of the guarantee, unless there is an agreement to the
contrary.
Article 419
If the bank pays to the beneficiary the sum agreed upon in the letter of guarantee, it shall replace him in his recourse against
the ordering person up to the limits of the sum paid.
Chapter 3 - Opening of a Credit
Article 420
1- The opening of a credit is a contract pursuant to which the bank places at the disposal of the customer a certain specified
sum of money, which the customer has the right to draw at once or at several intervals.
2- The credit shall be opened either for a definite or indefinite term.
Article 421
A contract of credit opening shall not be considered a loan and the customer shall not use the credit opened in his favour.
Article 422
1- If the credit is opened for an indefinite term, the bank may cancel it at any time, provided that notice of cancellation is sent
to the beneficiary at least thirty days before the date set for the cancellation. Any agreement that vests the bank with a right to
cancel an indefinite term credit without prior notice, or at a shorter notice period, shall be null and void.
2- Unless otherwise agreed, and in all cases, the credit opened for an indefinite term shall be deemed cancelled, if the
beneficiary does not use it, after the lapse of six months from the date on which the beneficiary was notified of such opening.
Article 423
1- The bank may not cancel the credit before expiry of the specified term except where the beneficiary dies, becomes legally
incapacitated, or suspends payment - even though a judgement adjudicating his bankruptcy is not issued- or commits a gross
fault in using the credit opened in his favour.
2- If the customer, in whose favour the credit has been opened, is a company, such credit shall expire also upon annulment of
the company or upon expiry of its term.
Article 424
If a substantial decrease occurs to the real or personal securities presented by the customer, the bank shall have the right to
require an additional security or reduce the credit amount in proportion to such decrease.
Article 425
A credit may not be assigned without the approval of the bank which opened it.
Article 426
A contract of opening a credit shall be considered an act of commerce, regardless of the capacity of the customer or the
purpose for which the credit is intended.
Article 427
The contract of opening a credit shall specify the maximum amount of the credit as well as the method of using it.
Article 428
If the credit is cancelled in accordance with the provisions of this Chapter, the bank shall not be obligated to settle the
payment orders or cheques drawn on the credit once they are presented to the bank after the credit is revoked.
Chapter 4 - Documentary Credit
Article 429
1- A documentary credit is a contract pursuant to which a bank opens a credit at the request of its customer (person ordering
the opening of the credit) within the limits of a specified amount and for a definite term in favour of another person
(beneficiary) against a security of documents representing goods shipped or intended for shipment.
2- The documentary credit contract shall be deemed independent of the contract that caused the opening of the credit, and the
bank shall remain external with regard to such contract.
Article 430
Every documentary credit shall contain a time limit for its validity and for presenting the documents for payment, acceptance
or discount. Where the date set for the expiry of the validity of the credit falls on a bank holiday, its validity shall be extended
to the next working day. The validity of the credit shall not extend beyond other than holidays even when the expiry of the
validity coincides with the date of disruption of the banks business due to force majeure, unless there is an express
authorisation to this effect from the person ordering the opening of the credit.
Article 431
1- The papers concerning the opening of the documentary credit or its confirmation or notice thereof shall precisely specify
the documents in consideration of which the operations of payment, acceptance or discount are executed.
2- The bank that opened the credit shall comply with the conditions of payment, acceptance and discount agreed upon in the
credit contract, if the documents representing the goods are conformant to the particulars and conditions provided for in the
contract.
Article 432
1- The documentary credit may be revocable or final and irrevocable.
2- The documentary credit shall be irrevocable, unless expressly agreed upon otherwise.
3- The documentary credit may either be divisible or transferable, or indivisible or non-transferable.
Article 433
1- A revocable documentary credit shall not create any obligation on the bank towards the beneficiary and the bank may at any
time amend or cancel it sua sponte or at the request of the person who ordered the credit to be opened.
2- The bank and the person ordering the opening of the credit shall be jointly liable towards the beneficiary if the bills of
lading submitted, within the validity period and prior to the cancellation of the documentary credit contract, are in conformity
with the particulars and conditions contained in the said contract.
Article 434
1- If the documentary credit is irrevocable, the obligation of the bank shall be absolute and direct towards the beneficiary and
any bona fide holder of the document drawn in implementation of the contract that originated the opening of the
documentary credit.
2- An irrevocable documentary credit may neither be cancelled nor amended, unless with the agreement of all the concerned
parties.
Article 435
1- An irrevocable documentary credit may be confirmed by a bank other than the one that opened it. Such confirming bank
shall in turn assume an absolute and direct obligation towards the beneficiary and any bona fide holder of the document drawn
in implementation of the documentary credit contract.
2- A mere notice of the opening of the irrevocable documentary credit sent to the beneficiary through a bank, other than the
one that opened the documentary credit, shall not be deemed to be a confirmation of the credit by such other bank.
Article 436
1- The documents shall be presented to the bank before the expiry of the validity of the credit, otherwise the bank may reject
them, unless the person ordering the opening of the credit requests that they be accepted and the bank consents to such
request.
2- The bank shall ascertain that the documents required are available, that their contents are in full conformity with the
conditions of the letter of credit and that they fully conform with each other.
Article 437
The bank shall only ascertain that the documents are, as per their appearance, in conformity with the documents required in
the letter of credit. It shall not be bound to check if the goods are in conformity with their related documents.
Article 438
If the bank accepts the documents, it shall immediately send them to the person ordering the opening of the credit, and if it
rejects the same, it shall immediately notify the rejection to the beneficiary, indicating the reasons for the same.
Article 439
1- The beneficiary may not assign the credit in whole or in part to another person or persons, unless so authorised by the bank
and provided that it is expressly stipulated in the letter of credit.
2- The bank may not split the performance of the credit, except with the authorisation of the person ordering the opening of
the credit.
3- Unless otherwise provided in the credit contract, the assignment may only be made once.
4- The assignment shall be made by endorsing the letter of credit, if it is made to order, or by taking it over if it is to bearer. In
case it is nominal, the procedures of transfer shall apply.
Article 440
1- The person ordering the opening of documentary credit shall repay to the bank the amount it has paid to the beneficiary,
within the limits of the credit opened, in addition to the expenses disbursed in this respect.
2- As a security to its entitlements, the bank shall have the right to retain the documents it receives from the seller as well as
the right to mortgage the goods represented by these documents.
3- If the person ordering the opening of the credit fails to pay to the bank the value of the bills of lading, which are conformant
to the conditions of opening the credit, within one month from the date he is notified of the receipt of said documents, the
bank may sell the goods by adopting the execution proceedings on commercially mortgaged goods.
4- If the goods perish or are damaged, the mortgage right shall pass to the insurance amount.
5- The bank and its customer may, after arrival of the documents of the credit financed by said bank, agree that the debtor
customer assigns the goods subject of the documentary credit or part thereof to the bank, in settlement of the debt due to the
latter, in whole or in part. The bank shall then allow the customer to receive such goods on trust basis and sell them on behalf
and for the account of the bank, according to the terms and conditions agreed to by both parties. The customer's liability shall
in this case be that of a commission agent, and the bank shall have all the rights of a principal over such goods or their price.
Title 4 - Operations on Commercial Papers
Chapter 1 - Discount
Article 441
1- The discount is a contract pursuant to which a bank undertakes to pay in advance the value of a commercial paper to the
beneficiary in consideration of transferring the ownership of such paper to the bank.
2- The bank shall deduct from the sum paid to the beneficiary of the discount, the interest on the paper's amount plus a
commission. It may be agreed to effect the discount against a fixed lump sum.
Article 442
1- Unless otherwise agreed, the interest shall be calculated on basis of the time that lapses from the date on which the
commercial paper is presented for discount until its maturity date.
2- Commission shall be estimated on basis of the value of the commercial paper.
Article 443
1- The bank shall acquire the ownership of the discounted commercial paper and shall exercise all the rights of the bearer as
he may have the right of recourse against the signatories of the paper.
2- The bank shall, furthermore, have towards the beneficiary of the discount an independent right to recover the sums it had
placed at his disposal, and redeem the interest and commission received.
3- Without prejudice to the provisions related to the current account, the bank shall exercise such right within the limits of the
unpaid papers, regardless of the cause of non-payment of the discounted papers.
Article 444
1- If the value of the paper is not paid or the customer is adjudicated bankrupt, the bank may reserve for itself the right to
make a reverse entry to the value of the commercial paper and the expenses in the debit side of its customer's account who
shall endorse the paper to the bank.
2- If the customer has no current account with the bank, he shall be bound to repay to the bank the value of the commercial
paper and the expenses.
Chapter 2 - Credit by Acceptance
Article 445
Credit by acceptance is a contract in which the bank plays the role of the drawee and it accepts, in this capacity, a commercial
paper drawn on it by its customer or another party who deals with such customer and the bank undertakes to pay the value
upon maturity.
Article 446
If the bank pays the value of the commercial paper it has accepted, it shall enter its value together with the expenses incurred
in the debit side of the customer's account. The bank shall have right of recourse against the customer for the sums paid by
virtue of the credit opened in favour of the customer and used as a consideration for payment of the commercial paper that it
had undertaken to accept.
Chapter 3 - Collection of Commercial Papers
Article 447
The bearer of a commercial paper may endorse it to the bank in terms of proxy endorsement, in which case the bank becomes a
proxy in the collection of the commercial paper for the account of the endorser.
Article 448
Upon maturity of the commercial paper, the bank shall claim payment from the drawee or the author of such paper. Once
payment is made, the bank shall enter the value of the paper in the credit side of the customer's account, and if payment is not
made, the bank shall make a protest or establish the non-payment and in both cases the expenses shall be charged to the
customer's account.
Article 449
1- The bank shall be liable for fault or omission in the execution of his proxy.
2- The bank may stipulate its exoneration from liability for delay in drawing up the protest. Such stipulation shall be effective
between the customer and the bank, unless an act of fraud or gross fault is attributed to the bank, but shall not have effect on
the other endorsers.
Article 450
The proxy resulting from a proxy endorsement shall terminate by the death or incapacity of the endorser.
Title 5 - Operations on Financial Securities
Chapter 1 - Lending Secured by Financial Securities
Article 451
1- Lending secured by financial securities is a loan secured by mortgage.
2- If the financial securities are nominal instruments, mortgage thereof shall be made in writing by virtue of an assignment
stating that it is given as a guarantee, marked on the instrument itself and entered in the records of the issuing entity.
However, if the financial securities are instruments to bearer, they shall be treated as material movables and mortgage thereof
may be established by all means of evidence.
Article 452
1- Possession of the mortgaged financial securities shall pass on to the mortgagee creditor bank.
2- The bank shall have the right to retain such instruments.
Article 453
The bank shall preserve the mortgaged securities, by collecting their profits, receiving their value upon depreciation and
deducting such sums from the principal debt.
Article 454
If the bank does not recover its dues on maturity date, it may apply to the competent court for authorisation to sell the
mortgaged instruments by public auction or at their price in the securities market and collect his dues from the sale price
before any other creditor. Any agreement otherwise shall be null and void.
Article 455
If the instruments are presented by a person other than the debtor, the owner thereof shall not be bound to pay the debt
guaranteed by the mortgage, except in his capacity as a guarantor in rem.
Article 456
The third party appointed by both contracting parties to keep possession of the mortgaged instruments, shall be deemed as
having waived his right to detain them for any reason prior to such mortgage, unless he had reserved such right when he
accepted to take possession of the mortgaged instrument for the account of the mortgagee creditor.
Article 457
If the full value of an instrument is not paid at the time it is presented for mortgage, the debtor shall upon maturity of the
unpaid part, pay it two days at least prior to its maturity date; otherwise the mortgagee creditor may petition the court to sell
the instrument, in accordance with the provisions of Article (454) hereof, then he shall settle the unpaid part from the
proceeds of the sale and keep the balance as a guarantee instead of the mortgage.
Article 458
The lien of the mortgagee creditor shall remain valid in the same rank as between the contracting parties and towards third
parties, over the profits of the mortgaged instrument, its interests, the papers replacing it and its value if paid before its
maturity date.
Chapter 2 - Deposit of Financial Securities
Article 459
The deposit of financial securities with a bank is a contract by which the customer delivers to the bank the financial securities
which have been agreed to be deposited, and the bank gives the customer a receipt upon receiving such securities. Such receipt
shall contain the contract conditions and the number of the financial securities, but the said receipt shall neither represent the
securities deposited nor replace them, it shall be deemed as a mere instrument to prove the contract.
Article 460
1- In preserving the financial securities deposited with it, the bank shall exercise such care as is exercised by a depository who
receives remuneration and shall take to that effect all the precautionary measures as is required by the banking customary
practice. Any agreement which exonerates the bank from such obligations shall be null and void.
2- The bank shall be held liable for the perishing or theft of such financial securities, except where this is the result of a force
majeure.
Article 461
Unless specifically authorised by the customer, the bank may not use the financial securities deposited with it, whether by
disposing, or mortgaging the same or exercising the rights derived therefrom.
Article 462
1- The bank shall undertake the management of the financial securities deposited with it, by collecting the profits and value of
such due or redeemed securities, and it shall notify the customer/depositor of the operations relating to the said securities,
such as replacement or renewal thereof, and place the collected sums at the disposal of the depositor and credit them to his
account.
2- The bank shall inform the depositor of every matter or right relevant to the financial security and requiring his approval or
is dependent on his choice. Where the depositor's instructions are not received in due time the bank shall dispose of the
matter in such manner as is beneficial to the depositor who shall bear the expenses.
3- The bank shall be held liable if it fails to meet its obligations and damage is caused to the customer as a result of such
failure.
Article 463
1- The bank shall be entitled to a remuneration against the obligations it assumes, such remuneration shall, in case of absence
of agreement, be determined according to custom, taking into consideration the number and value of the financial securities
deposited.
2- As a guarantee for the bank's remuneration, it shall have a possessory lien over the financial securities deposited and shall
refrain from returning same until recovery of its right, in addition to the privilege prescribed by the law concerning the
expenses disbursed for the preservation of a movable property.
Article 464
1- The bank shall return the financial securities deposited with it to the customer taking into consideration the time needed
for preparation of the securities for such return.
2- The return shall be effected at the same place where the deposit was made. Unless otherwise agreed or provided by law, the
bank shall return the same securities which had been deposited and not securities of the same type with different numbers.
Article 465
The financial securities shall be returned, as the case may be, to the depositor in person, his legal representative, his heirs or
his personal proxy even if it is mentioned in the security that it is owned by someone else.
Article 466
1- If the bank loses possession of the financial securities for a reason beyond its control, it shall be entitled to file a claim for
recovery of the same from their actual possessor.
2- If the financial securities issued to bearer are lost or stolen, the bank shall inform the issuer of such securities of the same
and instruct him to refrain from paying the profits or value of said securities, in case of redemption or maturity, to whoever
presents himself for the purpose.
Article 467
If a lawsuit is filed claiming that the securities deposited with the bank have become due, the bank shall directly notify the
depositor accordingly and shall abstain from returning the securities to him until the action is decided by the judicial
authorities.
Title 6 - Commercial Transactions of Islamic Financial Institutions
Article 468
1- The provisions stipulated in this Chapter shall apply to commercial transactions and contracts to which Islamic financial
institutions are a party.
2- In applying the provisions of this Chapter, Islamic financial institutions shall mean every institution whose articles of
association or articles of incorporation stipulate that it conducts its business and activities in accordance with the provisions
of Islamic Sharia. They also include the financial institution that carries out some of its works in accordance with the
provisions of Islamic Sharia, with a licence from the competent entities with regard to these works.
Article 469
Except for what is specifically stipulated in a special provision in this Title, commercial transactions and contracts concluded
in accordance with the provisions of Islamic Sharia shall be subject to the provisions of this Law and the relevant laws.
Article 470
In the explanation and interpretation of the texts contained in this Title, reference shall be made to the Sharia standards and
rules issued or approved by the Higher Sharia Authority stipulated in Federal Decree-Law No. 14/2018, without contradicting
the provisions of this Law.
Article 471
The Board of Directors of the Central Bank shall issue the rules and regulations that include controls and rules for commercial
transactions of Islamic financial institutions and Takaful companies, which carry out all or part of their works and activities in
accordance with the provisions of Islamic Sharia, and which are licensed by it, after their approval by the Higher Sharia
Authority stipulated in Article (470) of this Law.
Article 472
The following transactions shall be considered commercial transactions subject to the provisions of Islamic Sharia when they
are conducted through an Islamic financial institution:
1- Deposit.
2- Investment account.
3- Takaful insurance.
4- Financing formulas.
5- Investments.
6- Any transaction stipulated by any applicable legislation to be subject to the provisions of Islamic Sharia.
Article 473
1- It shall not be permissible for Islamic financial institutions to borrow or lend with interest or benefit, in any way, nor to
arrange or charge interest or benefit on any amount of debt of which settlement is delayed, including the delayed interest,
even as compensation, and any agreement to the contrary shall be null and void.
2- Borrowing in this Article shall mean the appropriation of money or fungible item, provided that a similar amount, quality,
and description is returned to the lender at the end of the term of the loan, and it does not require a benefit for the lender or
an increase over the amount lent explicitly or customarily.
Article 474
The financial obligations arising from commercial transactions and contracts subject to the provisions of this Title shall be
specific in amount, and they are considered debts whose amount may not be increased with deferred maturity, and any
Chapter 2 - Special Provisions for Some Types of Contracts and Obligations to which Islamic
Financial Institutions are a Party
Section 1 - Contract Promise
Article 475
1- The contract promise shall be considered an undertaking by one of the contracting parties to conclude a specific contract in
the future, and this undertaking is binding on the promising party only.
2- If the promisor fails to meet the promise without an acceptable excuse, he shall be obligated to compensate the promised
person, and compensation in such case shall be limited to the value of the direct actual damage to the promised person.
Section 2 - Sale by Instalment
Article 476
In this Section, sale by instalment shall be every sale that was concluded for the purpose of financing, or was part of a financial
transaction, through which non-cash money is exchanged for deferred cash money that is paid in instalments. The ownership
of the sold property shall be transferred to the purchaser as soon as the contract is completed, and the seller may not retain
the ownership of the sold property until all or part of the price instalments are paid, and any agreement to the contrary shall
be void.
Article 477
The provisions of the sale by instalment stipulated in this Section shall apply if it is agreed in the contract that the burdens of
the property right ownership or the consequence of its perishing or defecting it due to a matter out of control, shall be
transferred to the contracting party as soon as the property is handed over to him, even if the contracting parties call the sale a
lease.
Article 478
1- The price, nature, shape, size, or other characteristics of the sold item shall be determined in the contract, and it shall not
be permissible to agree otherwise.
2- The price of the sold item shall be determined by what is stipulated in the contract, and it shall not be permissible to
stipulate an increase in the price if there is a delay in the payment of instalments for any reason, and any agreement to the
contrary shall be null and void.
Article 479
If both contracting parties agree that the sale will be at the market price, then the price shall be determined by this price at the
time and place in which the contract is concluded. If there is more than one market price, then the average of these prices shall
be considered, and it shall not be permissible to agree on fixing the price or contracting on the market price in the future or
linking its determination to an index of unknown value.
Article 480
Both contracting parties may agree to authorise a third party to determine the price of the sold item in a way that serves the
interests of both parties, provided that such determination takes place in the contract meeting itself.
Section 3 - Murabaha
Article 481
Murabaha is a contract whereby the seller sells an asset to the purchaser after the seller acquires it and possesses it in fact or
de jure based on a request for financing from the purchaser. The sale shall be at cost plus a fixed amount of profit specified in
the contract, and the sum thereof shall be the price of the Murabaha sale.
Article 482
1- The price of the Murabaha sale after the conclusion of the contract shall be fixed, and it may not be variable or linked to an
index or the like.
2- It shall be permissible to agree to pay the price of the sale by way of Murabaha, in instalments of a specified amount and a
payment term, or in one payment for a specified period.
Section 4 - Istisna
Article 483
Istisna is a contract whereby the seller sells a described item as a disclosure to the purchaser of which the manufacture of the
item is required at a fixed total price specified in the contract and in which the nature, type, quantity and required descriptions
of the sold item are specified, with a future delivery date specified.
Article 484
In the Istisna banking contract, the seller shall be bound to the work and manufacturing materials together, and it shall be
permissible for the seller to manufacture the sold item by himself or to assign that to a third party in a contract separate from
the Istisna contract.
Article 485
1- The price after concluding the contract may not be variable or linked to an index or the like.
2- It shall be permissible to agree to pay the price of the sale by way of Istisna, in instalments of a specified amount and a
payment term, or in one payment for a specified period.
Article 486
1- The delivery of the sold item upon expiry of the term shall be in accordance with what was agreed upon in the contract, and
it shall not be permissible to stipulate the abence of defects, and any agreement to the contrary shall be null and void.
2- If the sold item was delivered and some of its descriptions differ significantly according to custom, then the purchaser shall
have the option between receiving the sold item and accepting it, or rescinding the contract and returning the price or the paid
amount by the seller, or the two parties agree on a new price to be determined at the time.
Article 487
It may be stipulated in the Istisna contract that the purchaser is entitled to compensation in the event of delay in the seller’s
delivery of the manufactured item, and that is in an amount agreed upon in the contract, unless the delay in delivery is out of
the seller’s control or is caused by an unavoidable accident.
Section 5 - Salam
Article 488
Salam is a contract whereby the seller sells an item for deferred delivery to the purchaser, and it is not stipulated that it be
manufactured at an expedited rate.
Article 489
1- The price in the Salam contract shall be known in quantity and quality and fixed in the contract, and that its receipt shall
not be delayed under a condition for a period exceeding (3) three days.
2- Debts may not be a price in the Salam contract.
Article 490
1- The nature, type, amount, and required descriptions of the sold item shall be stated, along with specifying the delivery date,
whether the seller provides the sold item himself or purchases it from someone else with a contract separate from the Salam
contract.
2- The Salam contract shall result in an obligation on the part of the seller to deliver the sold item and not its price, and the
delivery of the sold item at the time of the deadline shall be in accordance with what was agreed upon in the contract. It shall
not be permissible to state a condition that it shall be free from defects nor that the contract include a penalty clause for the
delay in the delivery of the sold item, and every agreement to the contrary shall be null and void.
Section 6 - Ijarah
Article 491
Ijarah is a contract whereby the lessor leases a specific property or a property described as a disclosure owned by him or leased
from him for a fixed fee specified in the contract or a variable fee to be paid in one payment or in instalments of known
amount and terms.
Article 492
A specific property may not be leased except after the lessor owns it or leases and receives it.
Article 493
It shall be permissible to promise to own the leased property so that the ownership takes place at the end of the lease period or
according to the agreement. It shall not be permissible to stipulate ownership in the lease contract, and ownership shall be in a
separate contract concluded at the time.
Article 494
The rent may be variable for each rental period specified in the contract, provided that the rent for the first rental period is
specified in the contract with a known amount. The rent for each subsequent period shall be calculated before its start
according to a specific index or criterion where both parties of the contract may not determine its price. The index or criterion
shall have a maximum and minimum limit stipulated in the contract, and if the rental period begins, its rent shall not be
subject to change.
Article 495
1- The subject of the Ijarah is the benefit, and its delivery shall be made by the delivery of the item itself, and it shall be be
capable of fulfilment, and that it is sufficiently definite to resolve the dispute.
2- The lessor may not stipulate the absence of defects from the leased property that prejudice the achievement of the intended
benefit in the Ijarah contract, or that he is not responsible for any defect that occurs to the property that affects the
satisfaction of the benefit, whether it is by his own doing or due to a reason beyond his control.
3- The basic maintenance expenses of the leased property and its insurance against damage shall be borne by the lessor, and it
shall not be permissible to state a condition of the same on the lessee or to agree initially to add it automatically to the rent,
and any agreement to the contrary shall be null and void.
Article 496
The provisions stipulated in the Financial Leasing Law shall apply to Ijarah in the matters not mentioned in this Chapter.
Chapter 3 - Islamic Banking Operations
Article 497
The Board of Directors of the Central Bank shall issue decisions related to banking operations that are carried out in
accordance with the provisions of Islamic Sharia and the administrative penalties and financial fines imposed by the Central
Bank in case of violation of the rules and regulations stipulated in Article (471) of this Law.
Title 7 - Lease of Safe Deposit Boxes
Article 498
1- Lease of safe deposit boxes is a contract pursuant to which the bank undertakes to place a certain specified safe deposit box
at the disposal of its customer/lessee, to be used for a certain specified period against a fixed remuneration.
2- The bank shall caretake the leased safe deposit box, provide for its security and fitness for use by taking all such measures as
are imposed by the banking customary practice.
Article 499
1- The safe deposit box shall be opened with two keys, one of which is handed over by the bank to the customer lessee and one
kept with the bank. The latter may not give a duplicate of the key to any other person, neither may it grant access to the safe
deposit box or allow it to be used except by the customer himself or his authorised agent.
2- The key delivered to the lessee shall remain the property of the bank and shall be returned to it on termination of the lease.
3- The bank may use other means such as automated control or plastic cards systems.
Article 500
1- The bank shall be responsible for the safety, custody and usability of the safe deposit box and may not deny responsibility
except by proving a force majeure or the act of some other person considered as such.
2- The bank may not avail itself of the condition of exoneration from liability where fraud or gross neglect is proved on its part
or on the part of its employees.
Article 501
1- The lessee undertakes to use the safe deposit box as is customary and to pay the rent agreed on the maturity dates.
2- The lessee of a safe deposit box may not place therein any object detrimental to its safety or the safety of the place where it
is located.
3- Unless otherwise agreed with the bank, a lessee may not sublet the safe deposit box or part of it nor may he assign the lease
to a third party.
Article 502
1- Unless otherwise agreed, if the safe deposit box is leased to several lessees, each one of them may use it separately.
2- If one of the lessees dies, the bank may not, after becoming aware of the death, give permission for the opening of the safe
deposit box, except with the approval of all concerned parties or pursuant to a court order.
Article 503
The bank shall keep a register where the dates and times on which the lessee opens the safe deposit box are entered.
Article 504
If the bank finds out that the safe deposit box is in danger or that it contains dangerous items, it shall immediately notify the
lessee to report to the bank premises and either empty the box contents or remove the dangerous items therefrom. If the
lessee fails to report on the date fixed, the bank may request, by virtue of a petition order from the competent judge at the
court where the safe deposit box is located, permission for opening the box in order to empty it or to remove such dangerous
items therefrom, in the presence of the person assigned by the judge for the purpose. A report of the facts shall be drawn up
wherein the box contents shall be listed. If the danger threatening the safe deposit box is imminent, the bank may open the
box, under its own responsibility, and empty it or remove any dangerous items therefrom, without any notice or permission
from the competent judge. This shall be performed by a committee consisting of at least three (3) of the bank officers who will
draw up a report of which one copy shall be notified to the customer.
Article 505
1- If the lessee fails to pay the rent of the safe deposit box on its due dates, the bank may, after the lapse of fifteen (15) days, or
other period agreed upon, from the date of serving him a notice requiring payment, consider the contract as automatically
rescinded and recover the box, after sending notice to the lessee that he shall report to the bank, open the box, empty its
contents and deliver its key. The notice shall be valid if sent to the last address specified by the lessee to the bank.
2- If the lessee fails to report on the specified date or if the contract term expired, the bank may, after serving notice on him,
apply, by virtue of a petition order from the competent judge at the court in whose jurisdiction the safe deposit box is located,
to obtain permission to open the safe deposit box and empty it in the presence of a person designated by the judge to that
effect, who shall prepare a report of the fact, listing down the contents and signed by the judge representative and the bank.
The judge may order that the contents be deposited with the bank, or with a trustee appointed by the judge, until they are
handed to their owner or until an order is issued by the judge to dispose thereof.
Article 506
The bank shall have a possessory lien over the contents of the safe deposit box and a privilege over the price resulting from the
sale of its contents for recovering the rent and the accruing expenses.
Article 507
1- Provisional and executive seizure may be imposed on the contents of the safe deposit box.
2- The seizure shall be imposed by notifying the bank of the contents of the deed by virtue of which such attachment is levied,
and by requiring the bank to state whether it has leased a safe deposit box to the distrainee. Upon receiving such notice, the
bank shall immediately prohibit the distrainee lessee from using the box and notify him without delay that the seizure was
levied on the safe deposit box.
3- If the seizure is provisional, the lessee may request the court to remove the seizure from all or part of its contents.
4- If the seizure is executive, the bank shall open the safe deposit box, empty its contents in the presence of the distrainer and
the execution officer and notify the lessee of the date fixed for the opening of the safe. On the date fixed, an inventory of the
box contents shall be made, and such contents shall be delivered to the bank or the trustee appointed by the competent court,
until they are sold in accordance with the procedures set by the court.
5- If the safe deposit box contains papers or documents not included in the forced sale, they shall be handed to the lessee.
However, if the lessee is not present at the time of opening the box, such papers or documents shall be delivered to the bank
for safekeeping after placing them in an envelope sealed with the stamps of both the execution officer and the bank delegate,
until they are claimed by the lessee.
6- The distrainer shall pay the bank a sum sufficient to secure the rent of the safe deposit box for the duration of the seizure.
Article 508
Except in the instances provided for by the law, the bank may not open a leased safe deposit box or empty its contents except
with the permission of the lessee and in his presence, or in execution of a court order or decision.
Section 4 Commercial Papers

General Provisions
Definition and Types of Commercial Papers
Article 509
Commercial papers are instruments written according to forms determined by the law, representing a right having for object a
specific sum of money payable on mere sight, or after a definite or determinable term. The commercial papers are negotiable
through commercial means and are customarily recognised as a payment instrument instead of money.
Article 510
Commercial papers include bills of exchange, promissory notes, bearer instruments, cheques and other papers drawn for
commercial transactions and which are customarily accepted as a means of payment in transactions.
Article 511
The bill of exchange (draft) is a commercial paper that includes an order from the drawer to the drawee for the payment of a
specific sum of money to the beneficiary at mere sight or at a definite or determinable term.
Article 512
The promissory note is a commercial paper pursuant to which its maker undertakes to pay a specific sum of money to another
person (the beneficiary), at mere sight or at a definite or determinable term.
Article 513
The instrument to bearer is a commercial paper pursuant to which its maker undertakes to pay a sum of money to the bearer
thereof, at mere sight or at a definite or determinable term.
Article 514
The cheque is a commercial paper containing an order issued by the drawer to a bank (the drawee) to pay, on the date
indicated therein as being the date of issue, a specific sum of money to the order of a third person, being the beneficiary, or the
bearer thereof.
Title 1 - Bill of Exchange

Chapter 1 - Making a Bill of Exchange
Article 515
The bill of exchange shall include the following data:
The bill of exchange shall include the following data:
1- The expression "Bill of Exchange" written in the text thereof and in the language in which the bill is written.
2- An unconditional order to pay a specific sum of money.
3- The date and place of making the bill.
4- Signature of the drawer.
5- First name and surname of the drawee.
6- Name of the person to whom or to whose order payment shall be made (the beneficiary).
7- Date of maturity and place of payment.
Article 516
An instrument which does not contain any one of the data mentioned in Article (515) hereof shall not be deemed a bill of
exchange except in the following instances:
1- If the bill does not indicate the maturity date, it shall be considered as being payable at sight.
2- If the place of payment of the bill is not stated therein, the place indicated next to the drawee's name shall be
considered as the place of payment and the drawee's residence at the same time. The bill shall be payable at the
drawee's place of residence if there is no condition of payment in another place.
3- If the place of making the bill is not stated therein, it shall be deemed made in the place mentioned next to the
drawer's name; and if such place is not expressly stated, the place of making the bill shall be considered as being the
place where the drawer has signed it.
Article 517
1- A bill of exchange shall be either signed or thumb-printed.
2- Two witnesses shall testify that the thumb printer has affixed the print before them fully aware of what he has signed.
Article 518
1- If the bill amount is written in letters and in figures at the same time, the sum indicated in letters shall prevail in case of
discrepancy.
2- If the amount is written several times either in letters or in figures, the lesser sum shall prevail in case of discrepancy.
Article 519
1- The bill of exchange may not contain more than one amount.
2- If a bill of exchange is drawn in a currency having a name which is common between the two countries of issuance and
payment, without specifying the intended currency, the currency of the country of payment shall prevail.
Article 520
1- The bill of exchange may be signed by more than one drawer.
2- The drawer may authorise a third party to sign the bill of exchange on his behalf, in which case the third party shall prove
his capacity upon signing the bill.
Article 521
1- The sum stated in the bill of exchange may not be conditioned upon payment of interest unless it is made payable at sight
or after a specific period from sight.
2- The interest rate shall be mentioned in the bill itself otherwise the condition is null and void.
3- The interest shall be valid as of the date of making the bill if no other date has been mentioned.
Article 522
1- Whoever signs without authority a bill of exchange on behalf of another person shall be held personally liable thereunder.
Once he pays it, he shall be entitled to the rights of the person on whose behalf he alleged to represent.
2- The same provision shall also apply to the proxy who acted ultra vires.
Article 523
If the bill of exchange bears forged signatures, signatures of fictitious persons, or of persons who have no capacity to bind
themselves; or where the signatures do not bind their signatories for other reasons, or do not bind those persons on whose
behalf the bill is signed, the obligations of other signatories on the bill shall nevertheless remain valid.
Article 524
The obligations of a person lacking full legal capacity, who has not been authorised to practice commerce, and those of a
person totally incapacitated, arising out of signing on a bill of exchange in any capacity whatsoever, shall be null and void in
regard to themselves only; and they may prevail themselves of such nullity against any bearer of such bill.
Article 525
1- The bill of exchange may be drawn to the order of the drawer himself.
2- It may also be drawn on its drawer.
3- It may as well be drawn for the account of another person.
Article 526
1- The form of a bill of exchange shall be governed by the law of the State where it is made.
2- The capacity of the obligor of a bill of exchange shall be determined according to his national law and where such law makes
a reference to the law of another country, the latter shall apply.
3- If the governing law considers the obligor as a person lacking legal capacity, his obligation under the bill shall nevertheless
remain valid if he signed the bill in a State under whose laws he is deemed to be of full legal capacity.
Article 527
The bill of exchange may be made payable at the place of residence of another person, whether at the place of the drawee's
residence or any other place.
Article 528
1- The drawer of a bill of exchange shall guarantee its acceptance and its payment.
2- He may put as a condition to be exonerated from the acceptance guarantee, however any condition of exoneration from
guaranteeing payment shall be deemed null and void.
Chapter 2 - Negotiation of the Bill of Exchange
Article 529
1- The bill of exchange shall be negotiable by endorsement even when it does not contain an express stipulation that it is
drawn "to order".
2- The bill of exchange shall not be negotiable when the drawer stipulates therein that it is not "to order", except in
accordance with the tranfer of rights provisions.
3- Endorsement may be made to the drawee regardless to whether he accepted the bill of exchange or not, endorsement may
also be made to the drawer or to any other obligor; all the foregoing persons may re-endorse the bill of exchange.
Article 530
1- Without prejudice to the provision of Article (534) hereof, the endorsement shall be unconditional and any condition
attached to the endorsement shall be deemed null and void.
2- Partial endorsement shall be null and void.
3- Endorsement to bearer shall be deemed a blank endorsement.
Article 531
1- Endorsement shall be written on the bill of exchange itself, or on an annex, and shall be signed by the endorser.
2- Endorsement may be restricted to the endorser's signature (blank endorsement), in which case the endorsement shall, in
order to be valid, be written on the back of the bill of exchange or on annex.
Article 532
Endorsement shall transfer all the rights resulting from the bill of exchange to the endorsee.
Article 533
In case of a blank endorsement, the bearer may:
1- Fill in the blank by writing his name or any other person's name.
2- Re-endorse the bill of exchange in blank or to another person.
2- Re-endorse the bill of exchange in blank or to another person.

3- Deliver the bill of exchange to another person without filling in the blank and without endorsing it.
Article 534
1- The endorser shall guarantee the acceptance and payment of the bill of exchange, unless otherwise agreed upon.
2- The endorser may prohibit its re-endorsement, in which case he shall not be liable towards any person upon whom the bill
of exchange shall pass on through a subsequent endorsement.
Article 535
The possessor of a bill of exchange shall be deemed to be its lawful bearer when he proves that he is entitled thereto by
successive endorsements even if the last one is in blank. Deleted endorsements shall in this regard be considered null and
void. If another endorsement succeed the one made in blank, the signatory of this last endorsement shall be deemed the
person to whom the right to the bill has passed on following the blank endorsement.
Article 536
If a person loses possession of a bill of exchange, the bearer shall not surrender it if he proves his right thereto in accordance
with the preceding Article, except where he has acquired it in bad faith or if he had committed a gross fault in order to acquire
it.
Article 537
Without prejudice to the provision of Article (524), the debtor who is sued for a bill of exchange may not invoke against its
bearer the pleas based on his personal relationships with the drawer or with one of its previous bearers, except where the
bearer's intent at the time of acquiring it was to prejudice the debtor.
Article 538
1- If the endorsement includes the expression (value for collection) or (value for receipt) or any other expression indicating a
delegation of power, the bearer may exercise all the rights arising from the bill of exchange, including the right to file an
action in his own name and may only endorse the bill as proxy.
2- The obligors may not in this case raise against the bearer the pleas which they may invoke against the endorser.
Article 539
1- If the endorsement includes the term (value for security) or contains any other expression indicating mortgage of the right
established by the bill of exchange to the endorsee, the bearer may exercise all the rights arising from the bill of exchange.
Nevertheless, if the bearer endorses the bill of exchange, such endorsement shall be deemed made for proxy.
2- The obligors of the bill of exchange may not in this case invoke against the bearer the pleas based on their personal
relationship with the endorser, except where the bearer's intent, at the time of acquiring the bill of exchange, was to cause
harm to the debtor.
Article 540
1- The endorsement made after the maturity date shall produce the same effects as an endorsement prior to such date;
however, an endorsement subsequent to a non-payment protest or after the expiry of the time limit set by law for making the
protest, shall only produce the same effects as for the assignment of right.
2- Unless otherwise established, an endorsement which does not bear a date shall be deemed to have been made before the
expiry of the time limit fixed for the objection, unless the contrary is proved.
Article 541
An endorsement may not be predated as a predated endorsement shall be considered a forgery.
Chapter 3 - Consideration for Payment of a Bill of Exchange
Article 542
The drawer of a bill of exchange or the person for whose account it was drawn shall make available with the drawee
consideration for its payment. Nevertheless, the drawer for the account of another shall be held personally liable towards the
endorsers and the bearer of the bill of exchange, exclusively, for providing the consideration for payment.
Article 543
Consideration for payment shall be available when, on the maturity date of the bill of exchange, the drawee is indebted to the
drawer, or to the person who ordered the drawing, for a specific sum of money due and at least equal to the amount of the bill
of exchange.
Article 544
1- The acceptance of a bill of exchange shall be considered a presumption that the consideration required for payment is
available with the acceptor; this presumption may only be rebutted as to the relation between drawee and bearer.
2- In case of denial, the drawer alone shall prove, irrespective whether the bill of exchange was accepted or not, that the
drawee had the consideration for payment on the maturity date. If he fails to do so, he shall guarantee the payment even if the
protest was made after the time limit prescribed by law. In case the drawer proves that consideration is available and continues
to be available until the date on which protest was supposed to be made, he shall be discharged to the extent of such
consideration, except where it had been used in his interest.
Article 545
1- The title to the consideration for payment shall pass ipso jure to the consecutive bearers of the bill of exchange.
2- If the consideration for payment is less than the amount of the bill of exchange, the bearer shall be vested in regard to such
deficit in the consideration with all the rights vested upon him for the entire consideration.
3- The provision stipulated in Clause (2) of this Article shall also apply in the event where the consideration for payment is
subject of dispute, is uncertain or not due on the maturity date of the bill of exchange.
Article 546
The drawer shall, even when the protest is made after the statutory time limit, deliver to the bearer of the bill of exchange the
documents required to obtain the consideration for payment. If the drawer is declared bankrupt, this duty shall be incumbent
upon the trustee. The bearer of the bill of exchange shall in all cases assume all the expenses incurred in this respect.
Article 547
The drawer’s bankruptcy shall result into the forfeiture of the delay given for payment and the maturity date of the bill of
exchange shall become due. The bearer, without the other drawer's creditors, shall be entitled to fulfil his right from the
consideration for payment available with the drawee.
Article 548
1- If the drawee is declared bankrupt and the consideration for payment is a debt due from him, such debt shall be included in
the assets of the bankruptcy.
2- If the drawer has, with the bankrupt drawee, goods, commercial papers, securities or any other funds that may be recovered
according to the Bankruptcy Law provisions, and if such funds are expressly or implicitly allocated for payment of the value of
the bill of exchange, the bearer shall have a priority to fulfil his right from the value thereof.
Article 549
1- If several due bills of exchange concur on a single consideration insufficient to pay them all, priority in recovering their
value shall be given in accordance with the order of their drawing dates.
2- If the said bills of exchange are drawn on the same date, the bill bearing the drawee's acceptance shall have priority,
otherwise, the bill for which consideration for payment has been allocated shall have priority over that containing a provision
of non-acceptance which shall rank last in the order of priorities.
Chapter 4 - Acceptance of the Bill of Exchange
Article 550
The bearer or any possessor of a bill of exchange may, during the period from its drawing up to the date of its maturity, present
it to the drawee at his place of residence for acceptance.
Article 551
1- The drawer of a bill of exchange may set a condition that it be presented for acceptance either on a specific date or without
fixing any date.
2- He may also set a condition that it be not presented for acceptance, unless it is due for payment with a person other than
the drawee, or in a place other than his domicile or due for payment on a specific period after sight.
3- He may as well stipulate that it be not presented for acceptance before a specified period.
4- Every endorser may set a condition that the bill of exchange be presented for acceptance on a specified date or without
4- Every endorser may set a condition that the bill of exchange be presented for acceptance on a specified date or without
specifying any date, unless the drawer had stipulated that it shall not be presented for acceptance.
Article 552
A bill of exchange that is due for payment after a specified period from sight shall be presented for acceptance within one year
of its date. The drawer may shorten or extend such time limit and every endorser may only shorten such time limit.
Article 553
1- The drawee may require that the bill of exchange be re-presented for acceptance on the next day following the first
presentment and any interested person may not allege that such request was rejected, unless it has been mentioned in the
protest.
2- The bearer of a bill of exchange presented for acceptance shall not assign it to the drawee.
Article 554
1- Acceptance shall be written on the face of the bill of exchange with the word (accepted) or with any other expression having
the same meaning and shall be signed by the drawee.
2- The mere signature of the drawee on the face of the bill of exchange shall be deemed as an acceptance.
3- The date of acceptance shall be stated on the same day on which it occurred if the bill of exchange is due for payment after a
specified period after sight, or if it is stipulated that it shall be presented for acceptance within a specified period pursuant to a
condition pertaining thereto, unless the bearer requires that the date of acceptance be stated on the same day of presenting
the bill of exchange.
4- If the acceptance is not dated, the bearer may in order to safeguard his rights have recourse to the endorsers, and the drawer
shall establish this fact by a protest made in due course.
Article 555
1- The acceptance shall be unconditional; however the drawee may restrict it to one part of the amount of the bill of exchange.
2- Any modification to the particulars of the bill of exchange relating to the wording of the acceptance shall be deemed as a
refusal of acceptance; nevertheless the acceptor shall remain bound by the contents of the acceptance text.
Article 556
1- If the drawer stipulates in the bill of exchange a place for payment other than the drawee's domicile without specifying the
name of the person to whom payment is to be made, the drawee may specify his name upon acceptance; if he fails to do so, the
accepting drawee shall make the payment at the place designated therefor.
2- If the bill of exchange is due for payment at the drawee's domicile, the drawer may specify in the acceptance wording an
address where the payment shall be made.
Article 557
1- If the drawee accepts the bill of exchange he shall pay its value on the maturity date.
2- In the event of non-payment the bearer may, even if he is the drawer himself, have direct recourse to the accepting drawee
by filing a lawsuit based on the bill of exchange claiming all what may legally be claimed.
Article 558
1- If the drawee crosses out his acceptance stated on the bill of exchange before returning it, the acceptance shall be deemed
as rejected and the crossing out as having occurred before the bill of exchange is returned; unless otherwise established.
2- In the event where the drawee notifies in writing his acceptance to the bearer or to any other signatory, he shall be bound
towards them by such acceptance.
Chapter 5 - Backing a Bill of Exchange
Article 559
1- Payment of a bill of exchange in whole or in part may be guaranteed by a backer.
2- Such backing may be given by any person even one of the signatories of the bill of exchange.
Article 560
1- Backing shall be written on the bill of exchange itself or on an extension annexed to it, in any wording indicating the
backing and signed by the backer.
2- Such backing shall be deduced from the mere signature of the backer on the face of the bill of exchange, unless such
2- Such backing shall be deduced from the mere signature of the backer on the face of the bill of exchange, unless such
signature is executed by the drawee or the drawer.
3- The wording of the guarantee shall include the name of the guaranteed person otherwise it shall be deemed as issued for the
drawer.
Article 561
1- The backer shall be liable in the same manner as the guaranteed person.
2- The liability of a backer shall remain valid even if the guaranteed liability is void for any reason whatsoever other than a
defect in form.
3- If the backer pays the bill of exchange, all the rights arising therefrom shall be vested on him towards the guaranteed party
and every obligor by virtue of the bill towards this latter.
Article 562
1- Backing may be given on a separate paper indicating the place where it was made.
2- A backer who has given his guarantee on a separate paper shall only be liable towards the person in whose favour the
backing was given.
Chapter 6 - Maturity of the Bill of Exchange
Article 563
1- The bill of exchange shall include one single date of maturity.
2- The drawer may specify the date of maturity of the bill of exchange in any of the following manners:
a- At sight.
b- After the lapse of a specified period from sight.
c- On a specific date.
d- After the lapse of a specified period from the date of its formation.
3- The bill of exchange which stipulates dates of maturity other than those mentioned in Clauses (1) and (2) of this Article
shall lose its characteristic as a commercial paper.
Article 564
1- The bill of exchange which is due for payment at sight shall be payable upon mere presentment, and it shall be presented
within one year from the date of its formation; the drawee may shorten or extend this time limit but the endorsers may only
shorten the same.
2- The drawer may stipulate that the bill of exchange which is due for payment at sight be not presented before the lapse of a
specified term; in which case the time for presentment is calculated as from the lapse of said term.
Article 565
1- The date of maturity of a bill of exchange, due for payment after a period from sight, shall be calculated as from the date of
acceptance or from the date of protest.
2- If no protest was made, the acceptance that does not bear any date shall be deemed as having occurred towards the acceptor
on the last day of the time limit set for presenting the bill of exchange for acceptance according to Article (552) hereof.
Article 566
1- The bill of exchange drawn one month or more after its date or after sight, shall be due on the corresponding date of the
month during which payment is to be made; in the absence of a corresponding date in the month during which the bill of
exchange shall be paid, it shall be due on the last day of such month.
2- If the bill of exchange is drawn for one month and a half or for several months and a half after its date or after the date of
sight, computation shall begin with the full months and the expression "half a month" shall mean fifteen (15) days.
Article 567
1- If the bill of exchange is due for payment on a specific date in a country where the calendar is different from that of the
country of issue, the date of maturity shall be determined according to the calendar of the country where payment is to be
made.
2- If the bill of exchange is drawn between two countries having different calendars and it is due for payment after a certain
period from its date, the date of drawing shall be adjusted to the corresponding day of the calendar of the country of payment
and the date of maturity shall be determined accordingly. The date of presentment of the bill shall be determined according to
and the date of maturity shall be determined accordingly. The date of presentment of the bill shall be determined according to
the same.
3- The above-mentioned rules shall not apply if a condition in the bill of exchange or in its wording states that different rules
shall be applied.
Chapter 7 - Payment of a Bill of Exchange
Article 568
1- The bearer of a bill of exchange shall present it for payment on the date of maturity.
2- Presenting a bill of exchange to any of the legally recognised clearing houses shall be considered as presenting it for
payment.
Article 569
1- If a drawee pays the bill of exchange, he shall be entitled to recover it from the bearer and it shall be stated on the bill of
exchange that it was paid.
2- The bearer may not refuse partial payment.
3- In the event of partial payment, the drawee may require that such payment be stated on the bill of exchange and a relative
discharge issued to him. The drawer, endorsers and any obligor under the bill of exchange shall be discharged up to the
amount paid and the bearer shall object to the outstanding amount.
Article 570
1- The bearer of a bill of exchange shall not be compelled to collect its amount before the maturity date.
2- If the drawee pays the amount of the bill of exchange before its maturity date, he shall bear any consequences resulting
therefrom.
Article 571
Whoever pays the value of a bill of exchange on the maturity date without valid objection shall be discharged, unless he had
committed fraud or gross fault. He shall ascertain the regularity of the endorsements sequence but he shall not be bound to
verify the authenticity of the signatures of the endorsers.
Article 572
1- If payment in the United Arab Emirates of the value of the bill of exchange is stipulated in a currency which is not officially
in circulation therein, payment shall be made in the national currency according to the rate of exchange prevailing on the
maturity date. If payment is not effected on the date of maturity, the bearer shall have an option to claim payment of the value
of the bill of exchange estimated in the national currency according to the rate of exchange prevailing either on the date of
maturity or on the date of payment. The current custom in the place of payment shall apply for the conversion rate of foreign
currency unless the drawer had fixed on the bill itself the rate on basis of which the payable sum shall be calculated.
2- The provisions of Clause (1) of this Article shall not apply in the event where the drawer had expressly stipulated that
payment of the bill of exchange shall be made in the foreign currency specified on the bill itself, subject to the special laws
concerning currencies and the control over foreign transfers.
3- If the value of a bill of exchange is specified in a currency having a common denomination but a different value in the
country of issue and the country of payment, it shall be assumed to mean the country of payment.
Article 573
1- If a bill of exchange is not presented for payment on the date of maturity, any debtor thereon may deposit its value with the
treasury of the court within whose jurisdiction the place of payment is located. Such deposit shall be at the bearer's account
and under his responsibility and against a receipt to be issued to the depositor stating the amount of the sum deposited, the
date of drawing of the bill of exchange, the date of maturity thereof and the name of the person in whose favour it was
originally drawn.
2- If the bearer claims payment from the debtor, the latter shall hand to the bearer the deposit receipt against the receipt of
the bill of exchange on which it is marked that payment was made by virtue of the said instrument. The bearer shall in this
case receive the sum deposited with the court against such instrument, and if the debtor fails to hand the receipt for the
deposit to the bearer, he shall pay the value of the bill of exchange.
Article 574
Objection against the payment of a bill of exchange or refrainment therefrom shall only be acceptable in case of loss of the bill
or in case of bankruptcy of its bearer.
Article 575
1- If a non-accepted bill of exchange drawn-up in several copies is lost, the person entitled to its value may claim payment by
virtue of one of its other copies.
2- If a bill of exchange is drawn in several copies and the copy which bears the acceptance is lost, payment thereof may not be
claimed on the strength of another copy except by order of the president of the competent court and against providing a
guarantor.
Article 576
A person who has lost a bill of exchange- whether accepted or not- and is unable to present one of the other copies, may apply
to the president of the competent court for an order to have its value paid, provided that he proves his title thereto, and
provides a guarantor.
Article 577
1- In the event of refusal to pay the value of a lost bill of exchange after claiming payment thereof pursuant to the provisions
of the two above-mentioned Articles, its owner must prove such refusal in a protest to be made the day following the date of
maturity, and notify the same to the drawer and endorsers in such manner and within the periods provided for in Article (591)
hereof.
2- The protest shall be made within the period mentioned in Clause (1) of this Article even though an order from the
competent court could not be obtained in due course.
Article 578
Payment of the value of a bill of exchange on the date of maturity following a court order in the cases referred to in Articles
(575) and (576) shall discharge the debtor from liability.
Article 579
The guarantor referred to in Articles (575), (576) and (580) shall be discharged from his obligation after the lapse of three (3)
years without raising a claim or filing a lawsuit.
Article 580
1- The owner of a lost bill of exchange may obtain a copy thereof through the person who has endorsed the bill to him and the
latter shall assist him and authorise him to use his name in order to claim from the previous endorser and so on from one
endorser to the other until it reaches the drawer.
2- Every endorser shall execute his endorsement on the copy of the bill of exchange handed over by the drawee after
annotating it as being in lieu of the missing original.
3- Payment may not be claimed by virtue of such copy except by order of the president of the competent court and after
submitting a guarantee.
4- All expenses incurred in this respect shall be borne by the owner of the bill of exchange.
Chapter 8 - Claim and Recourse against the Obligors of a Bill of Exchange
Article 581
The bearer of a bill of exchange, in case of non-payment on the date of maturity, shall have recourse against the endorsers,
drawer and other obligors thereof.
Article 582
1- The bearer may have recourse against the obligor of a bill of exchange prior to the date of maturity in the following cases:
a- Total or partial refrain from acceptance.

b- Bankruptcy of the drawee, whether he accepted the bill of exchange or not, or when he suspends payment even if he
has not been declared bankrupt or when an ineffective attachment is levied on his property.
c- Bankruptcy of the drawer of the bill of exchange which has been drawn under the condition of non-presentment for
acceptance.
2- The guarantor may request a respite for payment when recourse is exercised against him in the two cases provided for in
Clauses (b) and (c) of this Article, by requesting the court of first instance, in whose jurisdiction his domicile is located, within
three (3) days from the date of recourse. If the court considers the request justified to grant the respite, it shall determine in its
decision a time limit for payment provided it does not exceed the date set for maturity. The court decision in this respect shall
not be subject to challenge.
Article 583
1- If the maturity date of a bill of exchange falls on an official or banking holiday, payment thereof may only be claimed on the
following working day.
2- No action may be taken in relation to the commercial paper, such as presentment for acceptance or protest, except on a
working day.
3- If an action concerning a commercial paper shall be taken within a specified time limit, and the last day of such time limit
falls on an official or banking holiday, the time limit shall be extended till the next day.
4- The intervening holidays shall be calculated within the time limit.
5- The first day of the time limit shall not be taken into account when calculating statutory or contractual time limits related
to commercial papers.
Article 584
Evidence of non-acceptance or of payment of the bill of exchange shall be established by a protest for non-acceptance or a
protest for non-payment, which shall be made through the competent notary public, provided that one copy thereof is handed
over to the addressee of the protest.
Article 585
1- The protest shall include an exact literal transcript of the bill of exchange with all the particulars stated therein, as to its
acceptance, endorsement, guarantee, payment of its value if applicable and any other particulars. The protest shall also
contain the notice to pay the value of the bill of exchange, whether the person liable for acceptance or payment of such value
was present or absent, the reasons of non-acceptance or non-payment, the inability or refusal to sign and the amount paid
from the value of the bill of exchange, in case of partial payment.
2- The protest for non-acceptance or non-payment shall be served at the domicile of the obligor of the bill of exchange or at
his last known domicile.
Article 586
The competent notary public shall enter day by day all the papers related to the protest in chronological order in a special
register having numbered pages and duly annotated.
Article 587
The competent notary public shall, during the first ten (10) days of every month, send to the competent Commercial Register
Office a list of the protests for non-payment entered during the previous month and the said Office shall keep a special
register to enter such protests. Every person may have access to such Register and obtain a copy thereof against payment of
the prescribed fees. The said office shall publish a bulletin containing such protests.
Article 588
1- A protest for non-acceptance shall be made within the time-limits set for presentment of the bill of exchange for
acceptance. If the first presentment for acceptance according to Article (552) fall on the last day of such time limit the protest
may be made on the following day.
2- If the bill of exchange is payable at sight, the protest for non-payment shall be made according to the conditions stipulated
in Clause (1) of this Article on the protest for non-acceptance.
3- If the bill of exchange is due for payment on a specified date or after a certain period from the date of drawing or of sight,
the protest for non-payment shall be made on either of the two working days following the date of maturity.
4- The protest for non-acceptance shall waive the need for presenting the bill of exchange for payment and for making a
protest for non-payment.
Article 589
No other instrument shall replace a protest except in the instances where the Law so provides.
Article 590
1- If the drawee suspends payment, whether he has accepted the bill of exchange or not, or in case an ineffective attachment is
levied on his property, the bearer of the bill of exchange may not have recourse against the guarantors, except after presenting
the bill to the drawee for payment and making a protest for non-payment.
2- If the drawee be declared bankrupt, whether he has accepted the bill of exchange or not, or in case of bankruptcy of the
drawer of the bill of exchange who had stipulated its non-presentment for acceptance, submission of the bankruptcy
judgement shall be sufficient to enable the bearer to exercise his rights of recourse against the guarantors.
Article 591
1- The bearer of a bill of exchange shall notify its drawer, and the person who has endorsed it to him, of the non-acceptance or
non-payment thereof within the four (4) working days following the date of protest, or the date on which it is presented for
acceptance or payment if it contains the stipulation of recourse without expense. Every endorser shall, within the two working
days following his receipt of the notice, notify his endorser of the receipt of such notice, stating the names and addresses of
the previous notifiers, and so on from one endorser to the other until the drawer. The time limit shall, for each endorser, start
to run as from the date on which he received the notice from the preceding endorser.
2- When one of the signatories of the bill of exchange itself has been notified according to Clause (1) of this Article, it shall
also be necessary to notify his backer within the same period.
3- If one of the endorsers has failed to state his address or has stated it in an illegible manner, it shall be sufficient to notify his
previous endorser.
4- Any person who shall serve a notice, may do so in any manner whatsoever, even by returning the bill of exchange itself.
5- The person who shall send a notice, shall prove that he did so within the prescribed time limit prescribed. Such time limit
shall be deemed to be observed if he delivers the registered letter containing the notice to the Post Office within the said time
limit.
6- The person who shall serve notice shall not forfeit his rights if he fails to do so within the prescribed time limit, but he shall
be required-when relevant- to compensate the damage resulting from his negligence, provided that the compensation does
not exceed the amount of the bill of exchange.
Article 592
1- The drawer, every endorser or backer may exempt the bearer from the obligation of making the protest for non-acceptance
or non-payment upon recourse, if there is a stipulation in the bill of exchange of (recourse without expense) or (without
protest) or any other stipulation having the same meaning and signed by him.
2- However, this stipulation shall neither exempt the bearer from presenting the bill of exchange within the prescribed time
limits nor from serving the required notices. Any person opposing to the bearer the non-observance of such time limits shall
have to prove his allegation.
3- If the drawer has stipulated the condition of recourse without expense, the effects of such stipulation shall apply to all the
signatories; however if such stipulation is made by an endorser or backer, its effects shall apply to him alone.
4- If the drawer has himself made this stipulation and the bearer nevertheless protests, the latter shall bear alone the
expenses, but if the stipulation is made by an endorser or a backer, recourse may be exercised by all the signatories for the
expenses of protest, if made.
Article 593
1- Persons who have committed themselves under a bill of exchange shall be jointly liable towards its bearer.
2- The bearer may have recourse against the obligors, jointly or severally, without having to observe the order of their
obligations.
3- The right of recourse of each signatory on the bill of exchange shall, if he pays its value, be established against the obligors
towards him. Lawsuit filed against any of such obligors shall not prevent the right of recourse against the others even if they
are subsequent to the obligor against whom the lawsuit has been initially instituted.
Article 594
1- The bearer of a bill of exchange may claim, from the person having a right of recourse against him, the following:
a- The principal sum of a non-accepted or non-paid bill of exchange, along with the agreed interest, if stipulated.
b- The interest calculated according to the prevailing banking rate as of the maturity date.
c- The expenses of the protest, notices and any other expenses.
2- In case of recourse exercised before the maturity date of the bill of exchange, a sum equal to the official discount value on
the date of recourse at the place where the bearer's domicile is located, shall be deducted from the value of the bill of exchange.
Article 595
Whoever has paid the value of the bill of exchange may claim from the obligors committed towards him to reimburse him the
sum paid as well as the expenses incurred.
Article 596
The courts may not grant a respite to pay the value of the bill of exchange or to undertake any procedure related thereto,
except where provided for in the law.
Article 597
1- Any obligor who by way of recourse is requested or is likely to be requested to pay a bill of exchange, may, if he effects
payment, demand that the bill, together with the protest and a receipt for the amount paid, be delivered to him.
2- Any endorser having paid the bill of exchange may cross out his endorsement and all subsequent endorsements.
Article 598
In case of recourse exercised after a partial acceptance, the person who has paid the non-accepted part of the value of the bill
of exchange, may require its bearer to prove such payment of the bill itself and deliver him the respective discharge.
Furthermore, the bearer shall hand him a certified true copy of the original bill of exchange together with the protest, in order
to enable him to exercise his right of recourse against others for the amount paid by him.
Article 599
1- The bearer of a bill of exchange shall forfeit his right, under the rules of the Exchange Law, to have recourse against the
drawer, endorsers and other obligors, except the acceptor, on the expiry of the time limits set for the following:
a- Present the bills of exchange payable at sight or at a certain specified period after sight.
b- Make a protest for non-acceptance or for non-payment.
c- Present the bill of exchange for payment in case it contains a stipulation of recourse without expense.
2- Nevertheless, the drawer shall not benefit from such forfeiture, except where he proves that he made available the
consideration for payment on the maturity date; in which case the bearer may only have recourse against the drawee.
3- If a bill of exchange is not presented for acceptance within the time limit set by the drawer, the bearer shall forfeit his right
of recourse based on both the non-acceptance and non-payment, unless it is revealed from the wording of the stipulation that
the intention of the drawer thereby was to relieve himself from guaranteeing the acceptance.
4- If the endorser stipulates in his endorsement a date for presentment of the bill of exchange for acceptance, he may alone
take advantage of such stipulation.
Article 600
1- If due to a force majeure a bill of exchange is not presented or protested within the prescribed time limits, such time limit
shall be extended.
2- The bearer shall, without delay, notify his endorser of the force majeure; such notice dated and signed by the bearer shall be
transcribed on the bill itself or its extension; such notices to be served by each endorser to his previous endorser up to the
drawer according to Article (591) of this Law.
3- Upon removal of the force majeure, the bearer shall without delay present the bill of exchange for acceptance or payment,
then make the protest when necessary.
4- If the force majeure continues for more than thirty (30) days calculated as of the maturity date, recourse may be exercised
against the obligors without the need to present the bill of exchange or make a protest.
5- If the bill of exchange is payable at sight or at a certain specified period after sight, the time limit of thirty (30) days shall
run from the date the bearer notifies his endorser of the force majeure, even if such date is prior to the expiry of the time limits
set for presentment of the bill of exchange. The sight period shall be added to the thirty day time limit, if the bill of exchange
is payable at a certain specified period after sight.
6- Matters related to the person of the bearer or any person delegated by him to present or protest the bill of exchange shall
not be deemed to be a force majeure.
Article 601
The bearer of a bill of exchange protested for non payment may impose a provisional seizure, without the need to submit a
guarantee, on the properties of the drawer, acceptor, endorser, backer or any other obligors under the bill of exchange, subject
to the provisions stipulated for such seizure in the Civil Procedure Law, except the production of a guarantee.
Article 602
1- Any person having a right of recourse against the other obligors under the bill of exchange, may recover his right by drawing
a new bill of exchange on one of his guarantors, to be payable at sight at the place of residence of the guarantor, unless
otherwise provided.
2- A recourse bill of exchange shall cover the amounts mentioned in Articles (594) and (595) of this Law, in addition to any
commissions and other fees prescribed by law.
3- If the drawer of a recourse bill of exchange is himself the bearer, its amount shall be determined on the same basis as that
adopted to fix the value of a bill of exchange payable at sight, drawn from the place where the original bill of exchange was
payable to the place of the guarantor's domicile.
4- If the drawer of a recourse bill of exchange is an endorser, its amount shall be determined on the same basis as that adopted
4- If the drawer of a recourse bill of exchange is an endorser, its amount shall be determined on the same basis as that adopted
to fix the value of a bill of exchange payable at sight, drawn from the place of the drawer's domicile to the place of the
guarantor's domicile.
5- In case there are several recourse bills of exchange, the drawer of the original bill or any endorser of such bill, may not be
asked to pay more than the value of one recourse bill of exchange.
Chapter 9 - Intervention of the Bill of Exchange
Section 1 - General Provisions
Article 603
1- The drawer, endorser or backer of a bill of exchange may name the person who shall accept or pay the bill, when necessary.
2- Taking into consideration the conditions set forth in the following Articles of this Chapter, a bill of exchange may be
accepted or paid by any person intervening for the interest of any debtor thereof who may be subject of a recourse.
3- The intervening person may be a third party as he may also be the drawee who refused acceptance or any obligor under the
bill of exchange; however he may not be the drawee who accepted.
4- The intervening person shall, within the two working days following the intervention, notify the party in whose favour the
intervention took place; otherwise he shall be held liable when relevant, for compensating any damages sustained as a result
of negligence, provided that such compensation does not exceed the amount of the bill of exchange.
Section 2 - Acceptance of Intervention
Article 604
1- Acceptance of intervention shall occur in all cases where the bearer of an acceptable bill of exchange has a right of recourse
prior to the date of maturity.
2- If the bill of exchange names an acceptor or a payor where necessary of the value at its place of payment; the bearer may
not in this case, prior to the date of maturity, have recourse neither against the person who made such nomination nor against
his subsequent signatories; except if he presents the bill of exchange to its nominated acceptor or payor where necessary and
such nominee refrains from accepting it and the bearer proves such refrainment with a protest.
3- The bearer may, in other cases, refuse to accept intervention, and if he accepts it he loses his right of recourse prior to the
maturity date against the party in whose interest the intervention was made and against his subsequent signatories.
Article 605
Acceptance of intervention shall be done by writing it on the bill of exchange itself and shall be signed by the intervener. The
name of the person in whose interest the intervention was made shall also be mentioned thereon, otherwise, it shall be
deemed to be effected in favour of the drawer.
Article 606
1- The acceptor of intervention shall have the same liability, towards the bearer of a bill of exchange and the endorsers
subsequent to the person in whose interest the intervention was made, as that incumbent on the latter.
2- The party in whose interest the intervention was made and his guarantors may in spite of the acceptance of the
intervention, require the bearer to submit to them the bill, the protest and the quittance, if any, against payment of the
amount stated in Article (594) of this Law.
Section 3 - Payment by Intervention
Article 607
1- A bill of exchange may be paid by intervention in all cases if, upon or prior to maturity date, the bearer thereof has a right of
recourse against those liable thereunder.
2- Such payment shall be effected by paying the entire sum which was supposed to have been paid by the person in whose
interest the intervention was made.
3- Payment shall take place at the latest on the next day following the last day on which the protest for non-payment may be
made.
Article 608
1- If the acceptors of a bill of exchange by intervention or those designated for payment thereof, where necessary, have a
domicile at the place of payment, the bearer shall present the bill of exchange for payment to all such persons and if relevant
he shall serve them a protest for non-payment at the latest on the day following the last day on which such protest may be
made.
2- If the protest is not made on that date, the person designated for payment of the bill of exchange, where necessary, or the
person in whose interest the intervention was made as well as the subsequent endorsers shall be discharged from their liability.
Article 609
If the bearer of a bill of exchange refuses payment by intervention, he shall forfeit his right of recourse against the person who
would have been discharged by such payment.
Article 610
1- Payment by intervention shall be established by writing a quittance on the bill of exchange, stating the name of the party in
whose interest payment was done; otherwise the payment by intervention shall be deemed to be made in favour of the drawer.
2- The bill of exchange and the protest - if made- shall be handed over to the person who paid by intervention.
Article 611
1- The party having paid by intervention shall acquire all the rights arising therefrom against the person in whose interest
payment was made and against those persons liable under the bill of exchange towards such party. However, the person who
paid by intervention may not re-endorse the bill of exchange.
2- The subsequent endorsers to the person in whose interest payment was made shall be discharged from liability.
3- If several persons offer to pay a bill of exchange by intervention, the person whose payment shall discharge the biggest
number of those liable on the bill shall have preference. If this rule is knowingly violated, the intervener for payment shall
forfeit his right of recourse against any person who has been discharged had this rule been observed.
Chapter 10 - Bill Drawn in Several Copies
Article 612
1- A bill of exchange may be drawn in several copies conform to each other. In such case, each copy shall be numbered and
shall state the total number of copies issued, otherwise, each copy shall be deemed to be a separate bill of exchange.
2- The bearer of a bill of exchange which does not stipulate that it is the only copy, may require copies thereof at his own
expense. He shall to that effect refer to his endorser who shall assist him to refer to the previous endorser, and so on up to the
drawer.
3- Every endorser shall enter his endorsement on the new copies.
Article 613
1- Payment of a bill of exchange by virtue of one of its copies shall be a discharge of liability even when it is not stipulated
therein that the payment shall nullify the effect of the other copies. Nevertheless, the drawee shall remain liable for payment
by virtue of each copy signed by him for acceptance and which he failed to recover.
2- An endorser who has endorsed the copies of a bill of exchange to different persons, as well as his subsequent endorsers,
shall be liable by virtue of all the copies bearing their signatures and which have not been recovered by them.
Article 614
The person who sends a copy of the bill of exchange for acceptance, shall state on the other copies the name of the person who
has possession of such copy, and the latter shall submit it to the lawful bearer of any other copy. If he refuses to submit it, the
bearer shall have no right of recourse unless he makes a protest stating:
1- That the copy sent for acceptance has not been submitted to him despite the fact that he requested it.
2- That the acceptance or payment was not effected by virtue of another copy.
Chapter 11 - Photocopies and Alterations of the Bill of Exchange
Section 1 - Photocopies
Article 615
1- The bearer of a bill of exchange may make photocopies thereof.
2- The photocopies shall fully conform to the original of the bill of exchange, along with any endorsements or any other
particulars entered therein. It shall also be indicated on the copy the limit where the duplication from the original ends.
3- The copy may be endorsed and have an alternate backer in the same manner as on the original and the copy shall have the
same effects as the original.
Article 616
1- The name of the person having possession of the original shall be mentioned on the copy of the bill of exchange, and such
holder shall submit the original to the lawful bearer of the copy.
2- If the holder of the original refrains from submitting it, the bearer of the copy shall have no right of recourse against the
endorsers or alternative backers of the bill, unless he makes a protest where he states that the original has not been submitted
to him although he has requested it.
3- If after the last endorsement and before making the copy, a phrase is written on the original that the bill of exchange may
not be endorsed after that date except on the copy, in such case each endorsement subscribed on the original shall be null and
void.
Section 2 - Alterations
Article 617
If an alteration is made to the text of the bill of exchange, the persons who sign after such alteration shall be liable according
to the altered text, but the persons who signed prior to such alteration shall only be liable in accordance with the original text.
Chapter 12 - Expiry of the Limitation Period Barring
Article 618
1- The lawsuit resulting from the bill of exchange and lodged against the acceptor after the lapse of three (3) years
from the maturity date.
2- The lawsuit lodged by the bearer against the endorsers or the drawer after the lapse of one year from the date of the
protest made within the prescribed time limit or from the maturity date, if the bill contains a stipulation of recourse
without expense.
3- The lawsuits lodged by the endorsers against each other or against the drawer after the lapse of six (6) months from
the day on which the endorser has paid the bill of exchange or from the day on which the action was lodged against
him.
Article 619
If a lawsuit is filed, the limitation period provided for in Article (618) hereof shall be valid only from the date of the last
procedure taken on the lawsuit.
Article 620
Limitation periods stipulated in Article (618) hereof shall not apply if a judgement is rendered on the debt or if the debtor
acknowledges the debt in a separate deed, which entails novation of debt.
Article 621
The interruption of the limitation period barring from hearing the lawsuit shall have no effect except with regard to the person
against whom the procedure interrupting the said period was taken.
Title 2 - Promissory Note (Order Note)
Article 622
The promissory note shall contain the following particulars:
1- The order condition or the expression (promissory or order note) written in the body of the note in the same
language as that in which it was written.
2- An unconditional undertaking to pay a specified sum of money written in figures and in letters.
3- Maturity date.
4- Place of payment.
5- Name of the person to whom or to whose order payment shall be made.
5- Name of the person to whom or to whose order payment shall be made.

6- Date and place of making the note.
7- Signature of the maker of the note (the person who wrote it).
Article 623
An instrument which does not contain any one of the data mentioned in Article (622) hereof shall not be deemed a promissory
note except in the following instances:
1- If the maturity date is not stated, the promissory note shall be deemed payable at sight.
2- If the place of payment or the maker's domicile is not stated, the place of making the note shall be considered the
place of payment and the domicile of the maker.
3- If the place of making the note is not stated, it shall be deemed to have been made at the place indicated next to the
maker's name or at the place where he effectively signed the note.
Article 624
1- The maker of a promissory note shall be liable in the same manner as the acceptor of a bill of exchange.
2- The promissory note which is due after a certain specified period at sight shall be presented to the maker within the time
limit stipulated in Article (564) hereof, to be annotated with an entry that it has been sighted; such entry shall be dated and
signed by the maker.
3- The period of sight shall begin only from the date of such entry.
4- If the maker refrains from effecting such entry, his refusal shall be established by virtue of a protest of non-acceptance and
the date of the protest shall be deemed to be the starting date of the sight period.
Article 625
1- The provisions concerning the bill of exchange in regard to capacity, the number of photocopies, endorsement, maturity
and payment thereof, recourse for non-payment, cases where respite for payment may not be granted, provisional seizure,
protest, calculation of time-limits and working days, recourse by drawing a recourse bill of exchange, payment by intervention,
prescription of lawsuits, shall apply to promissory notes, provided that they are not inconsistent with the nature of a
promissory note.
2- Furthermore, the rules concerning bills of exchange which are made payable at the domicile of any third party or at a place
other than the drawee's domicile, stipulations of interest, discrepancies in the particulars pertaining to the sum due for
payment, the effects of signatures by persons having no capacity to contract, forged signatures, signatures of fictitious
persons, signatures which are not binding or those subscribed by persons having no authority or acting beyond the authority
granted to them, shall also apply to promissory notes.
3- In addition, the provisions pertaining to alternative backers shall apply to promissory notes, provided that if the name of
the guaranteed is not mentioned in the text of the guarantee the latter shall be deemed to be made in favour of the maker of
the promissory note.
Title 3 - Cheque
Article 626
Subject to the provisions stipulated in this Title, the provisions concerning bills of exchange shall apply to cheques, provided
that they are not inconsistent with the nature of a cheque.
Chapter 1 - Issuance of a Cheque
Article 627
The cheque shall contain the following particulars:
1- The expression "Cheque" written in the text thereof and in the language in which it is written.
2- An unconditional undertaking to pay a specified sum of money.
3- The name of the person who is under obligation to pay (the drawee).
4- The person to whom or to whose order payment shall be made.
5- Place of payment.
6- Date and place of issuing the cheque.
7- The signature of the person who issued the cheque (the drawer).
Article 628
An instrument which does not contain any one of the data mentioned in Article (627) hereof shall not be deemed a cheque
except in the following instances:
1- If the place of payment is not stated in the cheque, the place indicated next to the drawee's name shall be deemed to
be the place of payment; if several places are mentioned next to the drawee's name, the cheque shall be deemed due for
payment at the first place indicated. If the cheque is void of any such particulars, it shall be deemed to be due for
payment at the place of the drawee's head office.
2- If the place of drawing is not stated in the cheque, the latter shall be deemed to be drawn at the place indicated next
to the drawer's signature; and if no such place is stated, it shall be deemed to be drawn at the place where it was
effectively signed.
Article 629
1- Cheques issued and due for payment in the State shall be drawn on a bank.
2- Each bank delivering a chequebook containing blank cheques payable from its treasury, shall write on each cheque the
name of the account owner who received the chequebook as well as his account number.
3- Drawing may be done by way of applications in writing set by the bank for this purpose and acceptable by it as to form.
4- The signatures on cheques and on the special written application forms shall conform to the specimen and approved
signatures registered at the bank; and the account owner shall be liable towards the bank whether such account is creditor or
debtor.
Article 630
1- A cheque may not be issued unless the drawer has with the drawee, at the time of drawing the cheque, funds which he can
dispose of by cheque pursuant to an express or implicit agreement.
2- Whoever draws a cheque in person, or through a person receiving an order to draw it for his account, shall deposit sufficient
consideration for its payment. Nevertheless, the drawer for the account of others shall be personally liable towards the
endorsers and the bearer, excluding others, to provide the required consideration for payment.
3- The drawer alone shall prove, in case of denial, that the drawee of the cheque had at the time of its drawing sufficient
consideration for payment; if he fails to do so he shall be liable to pay the cheque even when he protests for non-payment after
the period prescribed by law.
Article 631
1- A cheque shall not be susceptible to acceptance and acceptance written on the cheque shall be null and void.
2- The drawee may annotate its confirmation on the cheque thus indicating the availability of the consideration for payment
with the drawee on the date of making such confirmation. The drawee's signature on the face of the cheque shall be deemed as
a confirmation.
3- If the drawee has sufficient consideration to pay the value of the cheque in full or in part, it may not refuse to confirm the
cheque if the drawer or the bearer requests the same.
4- The consideration for payment of a cheque that is confirmed in full or for its outstanding balance after partial payment
thereof shall remain blocked with the drawee and under its responsibility in favour of the bearer until the lapse of the time
limits set for presenting the cheque for payment.
Article 632
A cheque may be made payable to:
1- A named person with an express provision "to order" or without it.
2- A named person with the provision (not to order) or any other provision having the same meaning.
3- To bearer of the cheque.
Article 633
A cheque made payable in favour of a named person and containing the provision (or to bearer) or any other expression having
the same meaning, shall be deemed to be a cheque to bearer. If the name of the beneficiary is not stated, the cheque shall be
deemed to be "to bearer".
Article 634
A cheque due for payment in the State and containing a provision (not negotiable), shall not be paid except to the person who
received it marked as such.
Article 635
1- The cheque may be drawn to the order of the drawer himself.
2- It may as well be drawn for the account of another person.
3- It may not be drawn on the drawer himself except in the event where it is drawn between branches of the same bank or
between such branches and the bank’s head office, provided that the cheque drawn is not made payable "to bearer".
Article 636A stipulation in the cheque for the payment of interest shall be deemed null and void.
Article 637
The drawer shall guarantee the payment of the cheque and any condition exonerating the drawer from such guarantee shall be
deemed null and void.
Article 638
A debt shall not be renewed by the creditor's acceptance to receive a cheque in payment of his debt, but the principal debt
shall remain outstanding together with all its securities until the value of the cheque has been paid.
Chapter 2 - Negotiation of the Cheque
Article 639
1- The cheque made payable to a named person shall, regardless of whether it is expressly made "to order" or not, be
negotiable by endorsement even to the drawer or another obligor, who may in their turn re-endorse it.
2- The cheque made payable to a named person may not be negotiated if marked (not to order) or with any other expression
having the same meaning, except according to the transfer of rights provisions.
3- The cheque made payable to bearer shall be negotiated by hand.
Article 640
1- The endorser shall guarantee the payment of the cheque, unless otherwise agreed upon.
2- He may prohibit its re-endorsement, in which case he shall not be liable towards any person upon whom the cheque shall
pass on through a subsequent endorsement.
Article 641
Endorsement to the drawee shall be considered a quittance, unless the drawee bank has several branches and the endorsement
was made to a branch other than that on which the cheque was drawn.
Article 642
An endorsement written on a cheque to bearer shall render the endorser liable in accordance with the provisions governing
recourse but such endorsement shall not result in making the instrument a cheque to order.
Article 643
1- The holder of a cheque negotiable by endorsement shall be deemed to be its lawful holder whenever he proves that he is
rightful party thereof by virtue of consecutive endorsements, even though the last one is a blank endorsement.
2- Deleted endorsements shall in this respect be considered null and void and if another endorsement is made subsequently to
the blank endorsement, the person who signed such endorsement shall be deemed to be the person who has acquired title to
the cheque by virtue of the blank endorsement.
Article 644
If a person loses possession of a cheque, regardless of whether it is a cheque to bearer or endorsable, the person on whom such
cheque has devolved shall not be bound to waive it if he proves his right in the manner stipulated in Article (643) hereof,
except in the cases where he acquires it in bad faith or if he perpetrates gross fault in order to obtain such cheque.
Article 645
1- Endorsement made subsequent to protest or after the expiry of the time limit set for presenting the cheque shall only
produce the effects of a assignment of right.
2- If an endorsement is not dated, it shall be deemed to have been made prior to the protest or before the expiry of the time
limit set for presenting the cheque, unless it is otherwise established.
3- An endorsement may not be predated as a predated endorsement shall be considered a forgery.
Article 646
1- A backer may guarantee the payment of a cheque, in whole or in part.
2- This guarantee shall be from a third party other than the drawee and may also be one of the signatories of the cheque.
Article 647
1- Partial endorsement, as well as the endorsement made by the drawee, shall be void.
2- An endorsement to bearer shall be deemed a blank endorsement.
Chapter 3 - Payment of a Cheque
Article 648
1- A cheque shall be payable on the date stated thereon as being its date of issue and may not be presented for payment before
such date.
2- If the consideration for payment is less than the value of the cheque, the drawee shall make partial payment up to the
amount available therewith unless the bearer refuses the same. In case of partial payment, the drawee shall write the amount
of every partial payment on the back of the cheque and the bearer shall receive the original cheque and a certificate of such
payment. The bearer’s right of recourse for the outstanding balance shall be established by the original cheque on the back of
which the amounts of the partial payments are written in accordance with Article (667) of this Law, or by means of a protest
after the time limits set out in Article (663) of this Law have lapsed.
3- The drawee shall notify the Central Bank of the account holder data, in accordance with the rules and regulations issued by
the Central Bank to this effect, in any of the following cases:
a- In the absence of sufficient consideration for payment of the cheque that may be withdrawn on its due date.
b- If after issuing the cheque, the drawer recovers all the consideration for payment such that the cheque cannot be
paid.
c- If the drawee pays part of the cheque in accordance with Clause (2) of this Article.
Article 649
1- The cheque drawn and made payable in the State or abroad shall be presented for payment within six (6) months.
2- The time limit mentioned in Clause (1) of this Article shall run from the date stated on the check as being the date of issue.
3- Presenting a cheque to a bank or reserving its value by telephone or any other legally prescribed method including modern
technological means from such bank with the drawee bank, as well as presentment thereof to a legally recognised clearing
house shall be considered as presentment for payment.
Article 650
If a cheque is drawn between two countries using different calendars, the date of its issue shall be adjusted to the
corresponding date in the calendar of the country of payment.
Article 651
1- The drawee may pay the value of the cheque even after expiry of the time-limit set for presentment.
2- Objection against the payment of a cheque or refrainment therefrom shall only be acceptable in case of loss of the cheque or
in case of bankruptcy of its bearer.
3- The bank shall pay the cheque in spite of the drawer's objection in cases other than those stipulated in Clause (2) of this
Article. The court shall refrain from issuing an order to stop payment even where a lawsuit is filed to examine the merits of the
case.
Article 652
Death, incapacity or bankruptcy of the drawee, after giving a cheque, shall not affect the application of the provisions relating
thereto.
Article 653
1- If several cheques are presented at the same time and the consideration for payment is insufficient to pay their entire value,
the dates of their issue shall be taken into consideration.
2- If all cheques presented originate from the same chequebook and have the same date, the cheque bearing the first serial
number shall be deemed to have been issued before the others, unless otherwise established.
Article 654
1- If a cheque is payable in the State in other than its currency, its value shall be paid on the date of presentment in the
currency of the United Arab Emirates converted at the rate of exchange prevailing on the date of payment. If payment is not
made on the date of presentment, the bearer shall have the option to require payment of the value of the cheque converted
into the currency of the State at the rate prevailing either on the date of presentment or of payment.
2- If the cheque is presented for the first time after expiry of the time limit set for presentment, the rate of conversion shall be
that prevailing on the expiry of the said time limit.
3- The rate prevailing in the market shall be applied for the conversion of the foreign currency; however, the drawer may
specify on the cheque itself the rate that shall be applied to the amount that has to be paid.
4- If the value of a cheque is specified in a currency having a common denomination but a different value in the country of
issue and the country of payment, it shall be assumed to mean the country of payment.
Article 655
A surety who has committed himself in case of loss of the cheque made to order, shall be discharged of his liability after six (6)
months if no claim is made nor a lawsuit is lodged within the said time limit.
Article 656
1- If a cheque "to bearer" is lost or destroyed, its owner may file with the drawee an objection to payment of its value, stating
in such objection the cheque number, its sum, the name of the drawer and such other particulars which may help to identify
the cheque, as well as the circumstances of the loss or destruction. If it is impossible to provide some of these particulars, the
reasons for the same shall be stated. If the objector has no domicile in the State, he shall designate an elected domicile therein.
2- When the drawee receives the objection, he shall refrain from paying the value of the cheque to whomever having
possession thereof and shall set aside the consideration for payment until the matter is decided.
3- The drawee shall, at the objector's expense, publish the number and sum of the cheque which was lost or destroyed,
together with the name of the drawer, the name of the objector and his address, in one Arabic daily paper issued in the State.
Any disposal related to the cheque after the date of publication shall be null and void.
Article 657
1- The possessor of the cheque mentioned in Article (656) of this Law may contest the objection with the drawee who shall
receive the cheque from him against receipt and notify thereafter to the objector the name of the possessor of the cheque and
his address.
2- The objector must file a lawsuit claiming title to the cheque within thirty (30) days of the date of his receipt of the notice.
3- If the objector does not file the lawsuit claiming title to the cheque within the time limit mentioned in Clause (2) of this
Article, the possessor of the cheque shall obtain a judgement from the magistrate of summary justice ordering that the
objection be disregarded, in which event the possessor of the cheque shall be deemed to be the owner in regard to the drawee.
4- If the objector files a lawsuit claiming title to the cheque, the drawee may not pay the value of the cheque, except to the
party to the litigation who produces a final judgement establishing his title to the cheque or an amicable settlement approved
by both parties acknowledging him as the title holder.
Article 658
1- If the possessor of a cheque fails, within six (6) months from the date of filing the objection stipulated in Article (656)
hereof, to claim payment of the cheque, the objector may within the following month lodge a lawsuit before the competent
court against the drawee, in order to obtain a judgement granting him title to the cheque and an authorisation to cash its value.
2- If the objector fails to file the lawsuit stipulated in Clause (1) of this Article or where a judgement is rendered dismissing
said action, the drawee shall re-credit the consideration for payment to the drawer's account.
Chapter 4 - Crossed Cheque and Cheque Credited to Account
Article 659
1- The drawer or bearer of a cheque may cross it, and the crossing shall have the effects stated in Article (660) of this Law.
2- Crossing shall be by drawing two parallel lines on the face of the cheque.
3- Crossing may be general or special.
4- When no writing is made between the two lines or the word (bank) or any other word indicating the same meaning is
inserted therein, the crossing is general; whereas, if the name of a specified bank is inserted within the two lines, the crossing
is special.
5- A general crossing may be transformed into a special one, but a special crossing cannot be changed to a general crossing.
6- Striking off the crossing or the name of the bank inserted between the two lines, shall be deemed null and void.
Article 660
1- A drawee may not pay a cheque bearing a general crossing except to one of his customers or to a bank.
2- A drawee may not pay a cheque bearing a special crossing except to the bank whose name is written between the two lines
or to the customer of such bank if the latter is the drawee; however, the said bank may entrust another bank to cash the
amount of the cheque.
3- A bank may not receive a crossed cheque except from one of its customers or from another bank; nor may it cash the value
of such cheque for the account of other than such persons.
4- If the drawee fails to observe the above-mentioned provisions, he shall be liable for compensating the damages without
exceeding the value of the cheque.
5- The expression (customer) in this Article shall mean every person having an account with the drawee and having obtained
from him a chequebook or having the right to obtain such book.
Article 661
1- The drawer or bearer of a cheque may stipulate that it be not paid in cash, by writing on the face of the cheque (to be
credited to the account) or any other expression indicating the same meaning; in which case the drawee may only discharge
the value of the cheque by making entries in his books, in lieu of payment.
2- The striking off the statement (to be credited to the account) shall be disregarded.
3- If the drawee fails to observe the above-mentioned provisions, he shall be liable for compensating the damages without
exceeding the value of the cheque.
Article 662
Taking into consideration the provisions of Articles (659), (660) and (661) of this Law, the cheque shall remain negotiable and
enjoying all the characteristics of other cheques.
Chapter 5 - Refraining from Payment
Article 663
1- The bearer of a cheque may have recourse against the drawer, endorsers and other obligors liable thereby if he presents it
within the prescribed time limit but remained unpaid and this fact is established by protest. Instead of the protest, failure to
pay may be established by a statement from the drawee mentioning the date of presentment of the cheque, provided that such
statement is dated and written on the cheque itself.
2- The inscription of the statement mentioned in Clause (1) of this Article may not be refused when requested by the bearer,
even if the cheque stipulates recourse without expenses. However, the drawee may request a grace period not exceeding three
(3) working days following the presentment of the cheque, even if the cheque is submitted on the last day of the presentment
period.
Article 664
Refraining from paying a cheque shall be established, in the manner provided for in Clause (1) of Article (663) of this Law,
before the expiry of the time limit prescribed for presentment. If the cheque is presented on the last day of such time limit,
refraining from paying may be proved on the next working day.
Article 665
The bearer shall reserve his right to have recourse against the drawer, even when he fails to present the cheque to the drawee,
make a protest or take a similar action within the prescribed time limit, unless the drawer has provided the consideration for
payment and such consideration has remained available with the drawee until expiry of the time limit for presentment of the
cheque, then such consideration ceased to exist due to an act not attributed to the drawer.
Article 666
1- If due to a force majeure a cheque is not presented or a protest made or an alternative action taken within the prescribed
time limits, such time limit shall be extended.
2- The bearer shall, without delay, notify his endorser of the force majeure; such notice dated and signed by the bearer shall be
transcribed on the cheque itself or its extension; such notices to be served by each endorser to his previous endorser up to the
drawer according to Article (591) of this Law.
3- Upon removal of the force majeure, the bearer shall without delay present the cheque for payment, then make the protest or
alternative action when necessary.
4- If the force majeure continues to exist for more than fifteen (15) days calculated from the day on which the bearer served
notice on his endorser of the force majeure; even when such date happens to be before the expiry of the time limit prescribed
for presentment of the cheque, recourse may be exercised against the obligors thereof, without the need to present the cheque,
or make a protest or take an alternative action.
5- Matters related to the person of the bearer or any person delegated by him to present or protest the cheque or take an
alternative action shall not be deemed to be a force majeure.
Article 667
1- The cheque whereto a notice of unavailability or insufficiency of funds is affixed by the drawee shall constitute a writ of
execution, and its bearer may request its full or partial compulsory execution.
2- The provisions, procedures and rules set out in the Civil Procedure Law shall govern the execution thereof and the challenge
thereto.
Chapter 6 - Alterations and Plurality of Copies
Article 668
1- The drawee shall alone be liable for the damages resulting from the payment of a cheque bearing a forged signature of the
drawer or where the particulars stated in its text have been altered, unless he proves that a gross fault was committed by the
drawer whose name appears on the cheque resulting in such forgery or alteration. Any stipulation to the contrary shall be
deemed null and void.
2- The drawer shall be particularly deemed to be at fault, if he fails to exercise due care to keep the chequebook delivered to
him.
Article 669
1- A cheque, other than one to bearer, may be drawn in several copies conform to each other, if drawn in the United Arab
Emirates and due for payment in a foreign country or vice versa.
2- If a cheque is made in several copies, each copy shall be numbered on the face thereof otherwise it shall be considered as an
independent cheque.
Article 670
1- Lawsuit of recourse by the bearer of a cheque against the drawer, endorsers and other obligors for the payment of its
value, after two years from the expiry of the time limit set for presentment thereof.
2- Lawsuit of recourse by the obligors against each other after the lapse of one year from the day on which one of them
has paid the value of the cheque or from the date of the judicial claim lodged against him for payment thereof.
3- Lawsuit of the bearer against the drawee after three (3) years from the expiry of the time limit set for presentment of
the cheque.
4- The above-mentioned time limitations shall neither apply to a drawer who has not provided a consideration for
payment or has provided it then withdrew it in whole or in part, nor to the lawsuits against all obligors who have
earned an illicit gain.
Article 671
1- Despite the expiry of the time set for hearing the lawsuit, the defendants shall, when required to do so, certify under oath
that they are discharged from the debt.
2- Their heirs or other successors shall certify under oath that they are not aware that their legator was still liable for the debt
when he died.
Article 672
1- If a lawsuit is filed, the limitation period provided for in Article (670) hereof shall be valid only from the day of the last
procedure taken on the lawsuit.
2- The said periods shall not apply if a judgement is rendered on the debt or if the debtor acknowledges the debt in a separate
deed, which entails novation of debt.
3- The interruption of the limitation period barring from hearing the lawsuit shall have no effect except with regard to the
person against whom the procedure interrupting the said period was taken.
Chapter 7 - Penalties
Article 673
Shall be punished by a fine of not less than (10%) of the value of the cheque and of a minimum of AED 5,000 (five thousand
Dirhams) and not more than double the value of the cheque whoever commits any of the following acts:
1- Declaring deliberately and contrarily to the truth that the consideration for payment of the cheque is unavailable or
less than the value of the cheque.
2- Refusing in bad faith to pay a cheque drawn on the bank and having consideration for payment to a bearer against
whom no valid objection was made.
3- Refraining from inscribing the statement referred to in Article (663) of this Law.
4- Refraining from paying a cheque partially, issuing a certificate to this effect or delivering the original cheque in
accordance with the provisions of Clause (2) of Article (648) of this Law.
Article 674
1- Shall be punished by a fine of not less than (10%) of the value of the cheque and of a minimum of AED 1,000 (one thousand
Dirhams) and not more than double the value of the cheque whoever endorses or delivers a bearer cheque to a third party
while being aware that such cheque is unfunded or non-withdrawable.
2- The penalty shall be doubled in case of recidivism.
Article 675
1- Shall be punished by imprisonment for a period of not less than six (6) months and not exceeding two (2) years, and a fine of
not less than 10% of the value of the cheque and of a minimum of AED 5,000 (five thousand Dirhams) and not more than
double the value of the cheque, or by either of these penalties, whoever commits any of the following acts:
a- Ordering or requesting the drawee prior to the date of drawing a cheque, to refrain from cashing the cheque he has
issued in cases other than those set out in Articles (651) and (656) of this Law.
b- Closing the account or withdrawing all the funds therein prior to issuing a cheque or prior to presenting it to the
drawee for payment, or having a frozen account.
c- Deliberately writing or signing a cheque such as to prevent its payment.
2- The penalty shall be doubled in case of recidivism.
Article 676
Shall be punished by imprisonment for a period of not less than one year and a fine of not less than AED 20,000 (twenty
thousand Dirhams) and not exceeding AED 100,000 (one hundred thousand Dirhams) whoever commits any of the following
acts:
1- Forging or faking a cheque, or imputing it to a third party through the alteration of its data by addition, by deletion
or by the other means set out in Article (251) of the said Crimes and Penalties Law, with the intent of causing harm to a
third party and for the purpose of using it in respect of what it was forged for.
2- Knowingly using a forged or fake cheque.
3- Knowingly accepting amounts paid by a forged or fake cheque.
4- Wrongfully using or benefiting from a cheque that is duly drawn in the name of a third party, or whose use is
associated with a fraud.
5- Knowingly importing, manufacturing, acquiring, possessing, selling, offering or presenting equipment, tools,
technological programmes, information or data used in committing forgery as provided for in this Article.
Article 677
Without prejudice to any more severe penalty prescribed by any other law, shall be punished by imprisonment for life and a
fine of not less than AED 500,000 (five hundred thousand Dirhams) and not exceeding AED 1,000,000 (one million Dirhams)
whoever commits the crimes set out in Article (676) of this Law for a terrorist purpose.
Article 678
1- If the court has condemned a person for any of the crimes set out in Article (674) through Article (676) of this Law, it may
order that an abstract of judgement be published at the expense of the convicted person in two widely circulated daily papers,
one in Arabic and the other in English, issued in the State, or in two electronic means of publication, one in Arabic and the
one in Arabic and the other in English, issued in the State, or in two electronic means of publication, one in Arabic and the
other in English, as specified by decision of the Minister of Justice, provided that the publication includes – in any case- the
name, domicile and occupation of the convicted person and the penalty imposed thereupon.
2- Publication shall be required in case of recidivism, and in case of judgement of conviction for the crimes set out in Article
(676) of this Law.
Article 679
1- If the court condemns a person for any of the crimes set out in Article (674) and Article (675) of this Law, it may order the
withdrawal of the chequebook from the convicted person and prohibit the delivery of new chequebooks to him for a period not
exceeding five (5) years.
2- The convicted person shall be punished by a fine of not less than AED 50,000 (fifty thousand Dirhams) and not exceeding
AED 100,000 (one hundred thousand Dirhams) if he fails to hand over his chequebooks that are in his possession to the
concerned banks within fifteen (15) days from the date of being notified to do so.
3- In the event where any bank violates the order provided for in Clauses (1) and (2) of this Article, it shall be punished by a
fine not less than AED 100,000 (one hundred thousand Dirhams) and not exceeding AED 200,000 (two hundred thousand
Dirhams).
Article 680
1- If the court condemns a person for any of the crimes set out in Article (676) of this Law, it shall order the confiscation of the
seized objects acquired as a result of the crime or used in committing it, without prejudice to the rights of bona fide third
parties.
2- In all cases, confiscation shall be ordered if the manufacturing, acquisition, possession, sale or offer for sale of the seized
objects constitutes a crime per se, even if these objects do not belong to the accused.
3- If it is impossible to seize any of the objects provided for in this Article, or where it is impossible to order their confiscation
on account of their relation to the rights of bona fide third parties, the court shall impose a fine equivalent to their value at the
time of the crime.
Article 681
1- If the court condemns a person for any of the crimes set out in Article (673) through Article (677) of this Law, it may
prohibit the convicted person from practising a commercial or professional activity for a period not exceeding three (3) years if
the crime was committed on account of or in connection with this activity.
2- Shall be punished by imprisonment for a period of not less than one year and a fine of not less than AED 50,000 (fifty
thousand Dirhams) and not exceeding AED 100,000 (one hundred thousand Dirhams), or by either of these penalties, whoever
commits the same crime again after the issuance of the prohibition order set out in Clause (1) of this Article.
Article 682
If a criminal action is brought against the drawer for one of the crimes related to cheques as provided for in this Law, this shall
not affect the ability to take compulsory execution measures with respect to the cheque or to take judicial measures in
accordance with the provisions, procedures and rules set out in Article (667) of this Law, nor shall it affect the right of the
beneficiary or the bearer of the cheque to claim damages pursuant to the procedures prescribed by the Law.
Article 683
1- In the cases of committing any of the crimes set out in this Chapter, in the name or for the account of a legal person, the
person in charge of the actual management shall only be punished if he is proven to be aware of the crime, or has committed
same in his interest or in the interest of a third party.
2- If no responsibility on the part of the physical person is proven as specified in Clause (1) of this Article, the legal person
shall be punished by a fine of not less than that prescribed by the law for the crime and not exceeding five (5) times the said
fine. A judgement may be issued to suspend the legal person’s licence to practice the activity for a period not exceeding six (6)
months. In case of recidivism, a judgement shall be issued to revoke the licence or dissolve the legal person, as the case may
be, and the judgement shall be published at the expense of the legal person in two widely circulated newspapers, one in Arabic
and the other in English, issued in the State, or in two electronic means of publication, one in Arabic and the other in English,
as specified by decision of the Minister of Justice.
3- The penalties set out in Clause (2) of this Article shall not preclude the imposition of any additional penalties prescribed by
the law.
4- The provisions of Clause (2) of this Article shall not apply to the licensed financial institutions that are governed by
aforementioned Federal Law No. 14/2018 or any other replacing Law.
Article 684
The criminal lawsuit shall be ceased in the crimes set out in Article (674) and Article (675) of this Law if the full or outstanding
value of the cheque is paid prior to the commencement of the compulsory execution procedures prescribed in Article (667) of
this Law, or reconciliation is reached or the full or outstanding value of the cheque is paid prior to the issuance of a final
judgement. In the event where reconciliation is reached after the judgement becomes final, execution shall be stayed.

Federal Decree-Law No. 50 of 2022 On Commercial Transactions Law

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Federal Decree-Law No. 50 of 2022 On Commercial Transactions Law

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Lexis Middle East

Federal Decree-Law No. 50/2022

Issued on 3 Oct 2022 (corresponding to 7 Rabi Al-Awwal 1444 H)

Jurisdiction United Arab Emirates

Document link: https://www.lexismiddleeast.com/law/UnitedArabEmirates/DecreeLaw_50_2022

Commercial Transactions Law

Section 1 - Commerce in General

Chapter 1 - Acts of Commerce

Chapter 2 - The Merchant

a- Ministries, federal and local government entities.

a- Every merchant who is declared bankrupt unless he has been rehabilitated.

Chapter 3 - Commercial Books

3- The merchant carrying out virtual trade shall:

Chapter 1 - Business Concern, Trade Name and Unfair Competition

Section 1 - Business Concern

1- Names of the contracting parties, their nationalities and places of residence.

Section 2 - Trade Name

Section 3 - Unfair Competition

Chapter 2 - Trademarks and Descriptions

Section 2 - Commercial Obligations and Contracts

Title 2 - Commercial Sale

Chapter 1 - General Provisions

a- Description of the sale in a specific and thorough manner.

Chapter 2 - Certain Types of Commercial Sales

Section 1 - Sale by Instalment

Section 2 - Optional Public Auction Sale of Movables

a- Final clearance of the commercial store.

Section 4 - Certain Types of International Sales

Title 3 - Commercial Mortgage

Title 4 - Deposit in Public Warehouses

a- Taxes and duties due on the goods.

Title 5 - Securities Market and Commodity Contracts

Title 6 - Commercial Agency

Chapter 1 - General Provisions

a- If the principal authorises him to do so.

Chapter 2 - Certain Types of Commercial Agencies

a- Where the agent has in fact received the goods or items.

Chapter 1 - General Provisions

Chapter 2 - Contract of Personal Property Transport

a- Date of the bill and the place of its issuance.

Chapter 3 - Passenger Transport Contract

Chapter 4 - Transport Commission Agency

Chapter 5 - Special Provisions of Air Transport

1- The court within whose jurisdiction the carrier's domicile is situated.

Section 3 - Banking Operations

Chapter 1 - Bank Deposits

Chapter 2 - Bank Transfer

Title 2 - Current Account

Title 3 - Bank Credits

Chapter 1 - Bank Loan

Chapter 2 - Bank Guarantee

Chapter 3 - Opening of a Credit

Chapter 4 - Documentary Credit

Title 4 - Operations on Commercial Papers

Chapter 2 - Credit by Acceptance

Chapter 3 - Collection of Commercial Papers

Title 5 - Operations on Financial Securities

Chapter 1 - Lending Secured by Financial Securities

Chapter 2 - Deposit of Financial Securities

Title 6 - Commercial Transactions of Islamic Financial Institutions

Chapter 1 - General Provisions

Section 1 - Contract Promise

Section 2 - Sale by Instalment