UNIDROIT Principles and the Islamic-Based Saudi Commercial Law

Subject: Law
Pages: 6
Words: 1389
Reading time:
6 min
Study level: College

Introduction to Saudi Contract Law and the UNIDROIT Principle

This chapter will offer a historical background to commercial law as well as the legal system and system of government in Saudi Arabia. This will include the establishments that govern laws and hierarchy of laws in Saudi Arabia. Also, this chapter will discuss the sources of commercial laws in Saudi Arabia and the history of Saudi commercial law. Moreover, this chapter will discuss government bodies that are responsible for regulation of commercial laws in Saudi Arabia and the Saudi Arabia Contract law, in particular. A discussion on reasons as to why Saudi Arabia’s statutory laws are silent on some issues will as well fall under this part.

This chapter will also give a concise definition of Saudi Arabian Contract law and categorize different aspects of the Saudi Arabia Contract Law. A discussion on international conventions and other Arab nations that have signed conventions with the Saudi Contract laws will follow.

Again, this chapter will offer background of the UNIDROIT principle and explore the relevance and application of this principle to member countries of the convention. Besides, this chapter will contain an assessment of sources of laws that govern the UNIDROIT Principles of International Commercial Contracts. Issues surrounding interpretations of the UNIDROIT principle by judges will also be discussed in this chapter. Lastly, this chapter will examine differences between UNIDROIT, Contracts for the International Sale of Goods (CISG) and other international commercial laws.

Interpretation of the UNIDROIT in the light of Shari’a

This chapter will start by explaining the concepts of Sharia law. Also, this chapter will explain how the UNIDROIT principle gets interpreted by the Islamic law. This will entail a discussion of the ideals of Shari’a, which are vital in interpretation of UNIDROIT. The Islamic law follows the Quran, which has broad principles that are in line with any decent system of laws (Oser 2008). Also, the stance of UNIDROIT principle on the formation of domestic laws and contracts by entity states will follow. This will entail reviewing the perspective of UNIDROIT principles in relation to governing business practices among different trade sectors based on the socio-economic surrounding wherein the business operates (Jansen 2010). Also, the requirement of UNIDROIT on when domestic standards of business practices may be considered will follow.

Comparison between last five Chapters under the UNIDROIT and Saudi Contract Law. Could there be a Common Ground between applying Contracts?

This chapter will first review the last five chapters of the UNIDROIT principle. The section will also review Saudi contract law and try to establish consistencies and differences between the two laws. The paper will examine cases of contract suspension and termination as evident in the two pieces of law (Redfern 2004). Aspects of time allowed before a contract expires or becomes invalid will obtain consideration from both perspectives (Iqbal 2005). The fate of the defective party and allocation of more time, in both cases, will also be discussed. Prospects of contract termination and guaranteed rights will as well be discussed in both situations (Iqbal 2009; Meyer 2010).

Also, this chapter will discuss contract completion under circumstances of unpredictable events or in cases of substandard service delivery, as seen in both Saudi Arabian Contract laws and the UNIDROIT principles (Coulson 1980). The stance of the Islamic law and the rule of gharar, when it comes to uncertainties, will obtain a reviewal.

Distinction between International Restatement and Globalization of Contract Law in Saudi Arabia

This part will begin by defining the meaning of international restatement and globalization in the context of contract law. Aspects that differentiate international restatement and globalization of contract law in Saudi Arabia will obtain discussion (DiMatteo 2009). This part will also provide a background of how the UNIDROIT Principle became established and their uses. Besides, the chapter will explore the prospect of the UNIDROIT Principles, in collaboration with other private, global trade law tools, obtaining global support from the World Trade Organization, which is the main global body that deals with trade. Also, this part will explore the connection between the United Nations Convention on CISG and UNIDROIT principles (Campbell 2010). Merits of both the international reinstatements and globalization of contracts will follow. Further, UNIDROIT principles will obtain an evaluation against CSG. The application of UNIDROIT and CIG principles in nations with underdeveloped legal framework and their capacity to contain the progressive international business environment will also be discussed.

Is the UNIDROIT the Perfect Tool to manage Cross Border Legal Risks faced by Saudi’s Court?

This chapter will begin by explaining the nature of cross border legal risks faced by Saudi Arabian courts. An explanation on what constitutes a perfect tool to manage cross border legal risks will follow. Aspects of the UNIDROIT principle that can be effective in managing cross border legal risks will obtain discussion. Aspects of other international commercial laws such as the CISG, which can be effective in managing cross border legal risks, will also be discussed. These aspects will obtain an evaluation against their capacity to solve Saudi Arabia’s cross border risks, in order to establish the most relevant commercial law in handling the problem. The most ideal tool, when it comes to managing cross border legal risks faced by Saudi’s courts, should have an excellent capacity to serve international transactions and disputes in commercial business (Bishop 2005). The tool must also offer ways of handling persons from different backgrounds. Lastly, this part will discuss the significance of establishing the most perfect tool that can manage Cross Border Legal Risks faced by Saudi’s Court.

The UNIDROIT and the problem with law jurisdiction in Saudi Arabia: Is the UNIDROIT Compatible with Judges in Saudi Arabia?

This part will start by describing the nature of law jurisdiction in Saudi Arabia. Characteristics of judges in Saudi Arabia legal systems and their values will obtain an analysis in order to develop the chapter. Factors such as strict adherence to Shari’a law and ignorance of jurisdictions that do not conform to the Shari’a law will follow (Oxford Business Group 2009). Besides, the aspect of how Shari’a supports conformance to due process during conflict reduction and fair dealings will follow. Another dimension that will obtain discussion in this part is the difference between UNIDROIT Judges and Saudi Arabia’s judges regarding commercial law. Perspectives of these different judges when it comes to judging issues regarding insurance, possible profits and interests will also be considered (Baamir 2010; Hafeez 2012). Lastly, the aspect of non-consideration of damages that occur due to tarnished business reputation or loss of anticipated profits will obtain discussion in this part.

Suggesting some direction for future work to UNIDROIT with Saudi contract law under Shari’a? Is there room for UNIDROIT inclusion into Saudi contract law? Will the UNIDROIT override Saudi contract law under the Shari’a law?

This chapter will provide possible recommendations that can enhance full adoption of the UNIDROIT principle in Saudi Arabia. Aspects such as full inclusion of UNIDROIT into Saudi contract law will obtain discussion. Besides, circumstances under which Shari’a, which acts as a blue print of Saudi law of contract, accommodates foreign laws will follow (Oxford Business Group 2009). Further, aspect of how Shari’a supports conformance to due process during conflict reduction and fair dealings will obtain assessment (Oser 2008; Saeed 1999). Circumstances that may lead the Shari’a law not to recognize any UNIDROIT principle will as well be discussed. These will include aspects that are not certain such as potential profits and interest rates (Eisenberg 2012).

Suggestions on how the UNIDROIT can facilitate inclusion into the Saudi contract laws considering that Sharia does not allow payment of interests will follow. Factors such as adjusting some clauses in regard to Saudi Arabia commercial laws must thus be considered in this part (Hinkelman 2004).

This part will also answer the question on whether the UNIDROIT will override Saudi contract law under the Shari’a law. Principles contained in the Shari’a will obtain comparison against those contained in the UNIDROIT. Existence of any inconsistencies and differences in these laws will follow. Aspects such as restrictions by Quran and spheres of applicability will obtain a discussion (Oxford Business Group 2009). The chapter will end with a conclusion on whether the UNIDROIT will override Saudi contract law under the Shari’a law.


Baamir, A 2010, Sharia law in commercial and banking arbitration law and practice in Saudi Arabia, Ashgate, Burlington.

Bishop, R 2005, Foreign investment disputes : cases, materials, and commentary, Aspen Publishers, New York.

Bonell, MJ 2009, An international restatement of contract law: the UNIDROIT principles of international commercial contracts, 3rd ed., Transnational Publishers, Ardsley, NY, USA.

Campbell, B 2010, International dispute resolution, Kluwer Law International, New York.

Coulson, N J1980, Contract law in Saudi Arabia and the Gulf States, Graham & Trotman Limited, Sydney.

DiMatteo, L 2009, Law of international contracting, Aspen Publishers, Netherlands.

Eisenberg, D 2012, Islamic finance :law and practice, Oxford University Press, New York.

Hafeez, ZJ 2012, Islamic commercial law and economic development. Heliographica, San Francisco, CA..

Hinkelman, E. 2004, Importers manual USA the single source reference encyclopedia for importing to the United States, World Trade Press, San Rafael, CA.

Iqbal, J 2009, Islamic financial management, Global Vision Publishers, New Delhi.

Iqbal, M 2005, General takaful practice: Technical approach to eliminate Gharar (uncertainty), Maisir (gambling), and Riba'(usury), Gema Insani, Jakarta.

Jansen, N 2010, The making of legal authority : nonlegislative codifications in historical and comparative perspective, Oxford University Press, New York.

Meyer, L 2010, Non-performance and remedies under international contract law principles and Indian contract law : a comparative survey of the UNIDROIT principles of international commercial contracts, the principles of European contract law, and Indian statutory contract law, Lang Publishers, New York.

Oser, D 2008, The UNIDROIT principles of international commercial contracts : A governing law, Martinus Nijhoff Publishers, Leiden.

Oxford Business Group 2009, The report: Saudi Arabia, Oxford Business Group, New York.

Redfern, A 2004, Law and practice of international commercial arbitration, Maxwell, New York.

Saeed, A 1999, Islamic banking and interest: A study of the prohibition of riba and its contemporary interpretation, Brill, Boston.