The Cabinet Approves the Commercial Transactions Law: What We Know So Far and What to Do With Your Business Contracts

What has been officially announced so far

One thing is confirmed by the official source: the Council of Ministers approved the Commercial Transactions Law at the session mentioned, and this appeared as a separate item among the session's decisions alongside other approvals of agreements, memoranda of understanding and appointments. The official news did not set out the content of the law, the number of its articles or its chapters.

• Name of the law: the Commercial Transactions Law.
• The body that approved it: the Council of Ministers.
• Date of the session: Tuesday 16 Jumada al-Awwal 1448H, corresponding to 27 October 2026.
• Source of the news: the official Umm Al-Qura newspaper citing the Saudi Press Agency.

Some news sites have circulated additional details about the law, including the number of its articles and some of the subjects it is said to regulate. We have not verified these details against a published official text, so we do not rely on them in this guide, and we advise business owners not to base any change to their contracts on them before the text appears in the official gazette.

What we do not know yet

The gap between the news of the approval and the text of the law is wide, and it is what determines the law's real effect on your contracts. No one has a verified answer to these questions today, and all of them will be settled by the publication of the official text.

• The text of the law itself: not published, so its provisions and definitions cannot be known.
• The effective date: not announced, and the text will set it when published.
• What it repeals or replaces: not announced, so its effect on the existing commercial laws is unknown.
• Transitional provisions: it is not known whether it applies to contracts concluded before it takes effect or only to those concluded afterwards, or how it treats contracts already running.
• Supplementary regulations and rules: it is not known whether implementing regulations or rules will be issued, or when.

These five questions are what actually determine whether your contracts need amending, and when. The answer comes from the official text alone, not from predictions, not from comparisons with other countries' laws, and not from summaries circulating on social media.

From approval to entry into force: what the business is waiting for

Laws in the Kingdom are published in the official gazette Umm Al-Qura, and each law takes effect as it itself provides: it may provide for entry into force a certain time after publication or from another date it sets. So the date that matters to your business is not the date of the session but the effective date that will appear in the published text.

The period between approval and entry into force is an opportunity, not a burden. A business that knows its contracts and where the sensitive clauses sit in them can read the text as soon as it is published and identify in a short time what needs changing. A business that does not know where its contracts are, who signed them or when they end will start from zero at the moment everyone else is busy with the same task.

1. Follow the official gazette Umm Al-Qura and the official website of the Bureau of Experts at the Council of Ministers until the text is published.
2. On publication, identify the effective date and the transitional provisions first, before anything else.
3. Review whatever laws or provisions the law may repeal or replace, and compare them with the laws your contracts refer to by name.
4. Take the results of the review to your legal adviser before amending any contract or sending any notice to another party.

Checklist one: governing law and dispute resolution

Start with these two clauses because they determine which law governs the contract and who decides a dispute about it. Any change in the legal framework for commercial transactions will be read through them first, as they are the door through which the new law enters your contract.

• Does the contract state expressly that the laws in force in the Kingdom of Saudi Arabia govern it? A contract that is silent on this opens a dispute over a matter one line could have settled.
• Does the contract refer to a specific law by name? If so, note the name of that law, because a reference to a law that may be repealed or amended will need review once the text is published.
• Does the contract include wording that extends the reference to the laws as amended and to whatever replaces them? Such wording reduces the need to amend the contract every time the laws change.
• Who decides a dispute: the competent court in the Kingdom or arbitration? If arbitration, have its seat, language, number of arbitrators and method of appointment been set?
• Does the contract require a stage of amicable negotiation before going to court or arbitration, and is its length set clearly in the contract itself?
• If the contract is bilingual, does it state which text prevails when the two versions differ?

Do not amend these clauses now on the basis of predictions. The goal at this stage is to know what is actually written in each contract, and to separate the contracts that refer to laws by name from those that make only a general reference to the laws in force.

Checklist two: breach, termination and the term

These two clauses determine when and how the contract ends, and what happens if one party falls short. They have the greatest effect on a small business's cash flow, because a contract that cannot be ended clearly, or one that renews automatically without anyone noticing, can cost the business more than it is worth.

• Does the contract define what counts as a material breach, or does it leave the matter general and open to dispute?
• Does the contract require written notice of the breach and a cure period before termination, and is that period set as a clear number of days in the contract itself?
• Has the method of notice been set, such as email or the national address, and are the addresses written in the contract still correct today?
• Does the contract allow termination without cause, with what prior notice, and what each party is owed when that happens?
• What are the start and end dates of the contract? Does it renew automatically, and what notice of non-renewal does it state?
• Which obligations survive the end of the contract, such as confidentiality, amounts owed and the return of documents and materials?

The term in particular deserves special attention. Contracts that will renew, end or be signed after the text is published are the first to review, because that is the natural moment to update the wording by agreement of both parties without reopening the contract in the middle of its term. One practical form some parties agree on is a clause that deals with new laws issued while the contract is running, such as the illustrative example below.

Action plan: prepare your contracts file before the text is published

In its first stage, this review needs little more than order and discipline. These are practical steps that the business owner or the finance or administration manager can carry out in a few days, then hand the result to their legal adviser when the text is published.

1. Gather all running commercial contracts in one place: contracts with customers, suppliers, service providers and distributors, and confidentiality agreements.
2. Build a simple table for each contract: the other party, the start date, the end date, automatic renewal, the governing law, the forum for disputes and the termination terms.
3. Rank the contracts by priority: the highest value, the longest term, and those closest to renewal or expiry.
4. Flag every contract that refers to a specific law by name, or that lacks a governing law clause or a dispute resolution clause.
5. Hold off on any substantive amendment based on predictions about the new law until the official text is published.
6. When the text is published, take the table and the flagged contracts to your legal adviser to decide what needs an annex or a redraft.

If the review shows that some of your contracts are copied, outdated or missing the essential clauses, there is no need to wait for the new law to fix them. Template C-01, the Services Agreement, suits a clear two-party relationship, and template C-02, the MSA with Statement of Work, suits an ongoing relationship with repeated orders, where the general terms stay fixed and each project is set out in its own statement of work. Both templates are certified by a licensed Saudi lawyer and kept current as the laws change.

Note: this guide is general awareness and not legal advice on any specific contract or dispute. The templates are certified drafts that make a strong starting point and do not replace advice in particular cases, and the Arabic text prevails in case of difference.

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