How to file a breach of contract claim in Saudi Arabia is a crucial question for individuals and businesses navigating the realm of business transactions. Contracts serve as the foundation for ensuring rights and obligations, but when breaches occur, legal recourse becomes necessary.
This comprehensive guide aims to provide expert insights and practical steps for successfully filing a breach of contract claim in Saudi Arabia. From understanding the legal framework to prove breach of contract in Saudi Arabia, this guide equips you with the necessary knowledge to Protect Your Rights in a Breach of Contract Case in Saudi Arabia.
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How to file a breach of contract claim in Saudi Arabia.
Contracts are legally binding agreements that establish an agreement between two parties. This is why knowing How to file a breach of contract claim in Saudi Arabia is crucial when one party fails to fulfill their obligations as specified in the contract.
How do you bring a claim for breach of contract?
To file a breach of contract lawsuit in Saudi Arabia, it’s recommended to appoint a specialized lawyer who will assist you in completing the necessary procedures. It is also possible to file a breach of contract lawsuit electronically through the Najiz electronic portal, by accurately filling out the required information and submitting the request.
It is advisable to appoint the best lawyers in Saudi Arabia from the Al-Dossary jeddah law firm. who will guide you through the following procedures:
- Drafting the lawsuit statement which should include details such as:
- The names and personal information of both parties.
- The court where the lawsuit will be filed, and the subject matter.
- Evidence of the breach and resulting financial harm should be provided.
- The court will examine the lawsuit and schedule a hearing.
- Based on the facts and documents presented, the court will issue a final judgment either in favor of the plaintiff, awarding compensation, or dismissing the lawsuit if the evidence is insufficient.
Another way to know How to file a breach of contract claim in Saudi Arabia is electronically through Najiz, as follows:
- Access the Najiz electronic portal.
- Select the judiciary system and click on the lawsuit statement icon.
- Choose (new request) and select (contract dissolution or annulment) under general category.
- Fill out the accurate lawsuit statement with required information and submit.
- The competent authority will review the request and respond with a message containing the session date and request number for case follow-up.
Saudi Arabia contract Law.
Contract law in the Kingdom of Saudi Arabia follows the conservative Hanbali school of Islamic law, which adheres to a literal and traditional interpretation of the Quran. Any contract that is not prohibited by Sharia law is legally binding, without discrimination against non-Muslims or foreigners.
According to Article 104, a contract in Saudi law is formed based on three elements:
- Mutual consent through offer and acceptance.
- The subject matter of the contract.
- The cause of the contract.
Parties to a contract in Saudi Arabia have the freedom to negotiate its terms, except for those that are prohibited by Shariah law. Contracts must be free from deception and uncertainty.
If there is uncertainty regarding fundamental terms like the subject matter or price, the contract may be considered void. Contracts involving speculation, resembling gambling rather than productive efforts, are not permissible and therefore void under Shariah law.
Articles 105-114 of the Contract Law (CTL) in Saudi Arabia cover the termination and annulment of contracts. These articles outline four circumstances in which a contract may be terminated:
- Mutual consent (Article 105): Parties can terminate a contract by mutual agreement.
- Option to cancel (Article 106): Contracts may be terminated if the parties agree to include an option for termination.
- Termination for breach (Article 107): If one party breaches the contract, the other party, after notifying the breaching party, may request specific performance or termination with compensation if necessary.
- Impossibility of performance (Article 110): Contracts may be terminated if performance becomes impossible.
Regarding termination for breach, Article 108 allows the obligee to agree that termination can occur without a judicial ruling.
Penalty for breaking employment contract in Saudi Arabia.
The new amendments to the labor law have addressed the loopholes that were previously present. Now, employment contracts must include a compensation clause in the event that either party terminates the contract for an unlawful reason.
Breach of contract can have serious repercussions, especially if you have entered into agreements for the purchase or sale of goods or services that include a condition to complete the transaction on a specific date.
Typically, violations of agreements involve penalties for non-compliance, which may include additional compensation to the other party, known as (liquidated damages). The amount of liquidated damages generally depends on the profit you would have gained from performing your part of the deal and the impact of your failure to perform on the other party.
Breach of contract always forms the need for asking a Saudi Arabia labor lawyer about How to file a breach of contract claim in Saudi Arabia.
The damaged party, whether an individual or a company, can seek justice in court by filing a lawsuit to obtain compensation for damages resulting from the breach or to enforce the contractual terms.
If you are claiming damages, you must prove the amount you have lost due to the violation. A penalty for breach of contract can involve the demand for the agreed-upon amount of the penalty clause specified within the contract as compensation for the violation and resulting losses.
Whether or not compensation is warranted may depend on whether there are any financial consequences associated with the breach.
In such cases, it may be possible to claim compensation for incurred damages. Additionally, if there is no direct cost associated with a specific performance, financial compensation may be awarded to compensate for the losses.
Breaking the employment contract by the employee
Article 81 of the Labor Law enumerates legitimate grounds that entitle an employee to unilaterally terminate their employment contract prior to its expiry, without being subject to any compensation obligation or requirement to notify the employer. Moreover, the employee retains full entitlement to their labor dues.
The following circumstances illustrate situations where the employer is precluded from seeking compensation or asking How to file a breach of contract claim in Saudi Arabia:
- Failure on the part of the employer to comply with the mutually agreed-upon terms stipulated in the employment contract.
- Discovery by the employee that the employer or their authorized representatives are engaging in deceptive practices towards employees, such as imposing excessive working hours beyond the agreed limits or effecting changes in work conditions without proper notification.
- The employee being assigned to a work location that differs from the one specified in the contract, with the assigned place being unsuitable for the employee.
- Instances where the employer engages in verbal or physical abuse, humiliation, or derogatory treatment towards the employee or their relatives.
- Occupational hazards that pose a threat to the employee’s safety, health, and life, despite the employee notifying the employer, who fails to take necessary preventive measures or provide adequate protection.
- Non-payment of the employee’s financial entitlements by the employer.
- Situations where the conduct of the employer or their representative, particularly through unjust treatment or violation of contractual terms, compels the employee to ostensibly terminate the contract.
Compensation for breaking the contract.
According to the Saudi Labor Law, in the event of an unjustified and arbitrary termination of an employment contract by either the employee or the employer, the party responsible for the termination is obligated to compensate the other party for any resulting damages. this is why they should know How to file a breach of contract claim in Saudi Arabia.
The calculation and determination of compensation for an abrupt termination of an employment contract depend on factors such as the nature of the work and the payment method, as follows:
- If the employment contract is of a fixed-term nature, the terminating party must provide financial compensation equivalent to the remaining duration of the contract.
- In the case of an indefinite-term contract, the terminating party is required to grant compensation assessed as follows:
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- an amount equal to fifteen days’ salary for each year of the employee’s or worker’s service.
- The compensation amount may not be lower than the employee’s wages for a period of two months.
- If the employment contract includes a provision specifying a designated amount to be paid upon contract termination, the terminating party must honour the agreed-upon sum.
- In the instance where the employer is the party initiating the termination, the employee has the right to abstain from work for one full day per week following notification of the termination.
- This provision enables the employee to seek alternative employment opportunities. The employer must be duly informed of the non-working day, and withholding the employee’s wages for that day is not permissible.
Can you claim compensation for breach of contract?
Compensation for contract breach can be pursued from the other party, provided tangible financial losses or damages resulting from the breach are proven. Furthermore, It is essential to demonstrate that the breach was not due to force majeure, because negligence or harm resulting from force majeure does not constitute a breach of the contractual agreement.
As we come to the end of our article.
How to file a breach of contract claim in Saudi Arabia 2023.
Navigating the intricacies of How to file a breach of contract claim in Saudi Arabia requires a deep understanding of the legal landscape and a strategic approach. Seeking the assistance of a skilled and experienced lawyer in Jeddah Saudi Arabia specializing in Saudi Arabian contract law can significantly enhance the chances of a successful outcome.
With the help of the best legal advisor in saudi arabia, individuals and businesses can effectively know How to file a breach of contract claim in Saudi Arabia, assert their rights and pursue the appropriate legal remedies to address contract breaches and protect their interests.
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