Can a Saudi power of attorney be drafted in general terms?

Article 482 of the Civil Transactions Law provides that a power of attorney is not valid if it is worded using general terms without specifying the type of legal disposition that is its subject. Article 484 goes further for anything beyond acts of management, requiring a special power of attorney that specifies the type of act and the dispositions the agent is authorised to perform.

Can the agent appoint a substitute?

Article 489 of the Civil Transactions Law prohibits the agent from delegating all or part of his powers unless the principal authorises it. A sub-agent appointed with authorisation is treated as an agent of the original principal, both the principal and the agent may dismiss him, and dismissal of the original agent automatically dismisses the sub-agent.

When does a Saudi power of attorney end?

Article 502 of the Civil Transactions Law ends it on completion of the work, expiry of its term, or the death or loss of competence of either the principal or the agent. Article 503 also lets the principal dismiss the agent or restrict his powers at any time, unless the power of attorney was issued for the benefit of the agent or a third party, in which case the beneficiary's consent is needed; the principal must notify the agent in all cases.

Power of Attorney in Saudi Arabia

Agency is codified in Articles 480 to 505 of the Civil Transactions Law, and the rule that most often invalidates a Saudi power of attorney is Article 482: one worded in general terms without specifying the type of legal disposition is not valid. Anything beyond acts of management needs a special power of attorney naming the act and the dispositions authorised.

Download the Saudi Arabia drafting checklist (.docx)Where to read Saudi Arabia law

Governing law

Powers of attorney are governed by the Power of Attorney Contract provisions in Articles 480 to 505 of the Civil Transactions Law, Royal Decree No. M/191 of 18 June 2023.

Civil Transactions Law, Royal Decree No. M/191 of 18 June 2023, Arts. 480 to 505 (Bureau of Experts official translation, Ministry of Investment)

What a power of attorney has to contain in Saudi Arabia

Article 480 defines a power of attorney as a contract appointing an agent to act on the principal's behalf in legal dispositions, and Article 481 allows it to be absolute, restricted, conditional or deferred to a future term.
Civil Transactions Law, Royal Decree No. M/191 of 18 June 2023, Arts. 480 and 481 (Bureau of Experts official translation, Ministry of Investment)
Article 482 provides that a power of attorney is not valid if it is worded using general terms without specifying the type of legal disposition that is its subject.
Civil Transactions Law, Royal Decree No. M/191 of 18 June 2023, Art. 482 (Bureau of Experts official translation, Ministry of Investment)
Article 483 validates a special power of attorney for a specific type of disposition even where the subject is unspecified, except for donations. Article 484 requires anything other than an act of management to be covered by a special power of attorney specifying the act and the dispositions authorised.
Civil Transactions Law, Royal Decree No. M/191 of 18 June 2023, Arts. 483 and 484 (Bureau of Experts official translation, Ministry of Investment)
Article 489 bars delegation without the principal's authorisation, treats a permitted sub-agent as the original principal's agent, lets both principal and agent dismiss him, and dismisses him automatically when the original agent is dismissed.
Civil Transactions Law, Royal Decree No. M/191 of 18 June 2023, Art. 489 (Bureau of Experts official translation, Ministry of Investment)
Articles 491 and 495 restrict self-dealing: the agent may not buy for his own account the thing he was appointed to buy or sell, nor deal with his ascendants, descendants or spouse, without the principal's authorisation.
Civil Transactions Law, Royal Decree No. M/191 of 18 June 2023, Arts. 491 and 495 (Bureau of Experts official translation, Ministry of Investment)
Article 502 ends the power of attorney on completion of the work, expiry of its term, or the death or loss of competence of either party. Article 503 lets the principal dismiss the agent at any time unless it was issued for the benefit of the agent or a third party, and requires notice in all cases.
Civil Transactions Law, Royal Decree No. M/191 of 18 June 2023, Arts. 502 and 503 (Bureau of Experts official translation, Ministry of Investment)

What catches drafters out

Article 504 makes a principal who dismisses a paid agent at an inappropriate time or without acceptable justification liable to compensate him, and Article 505(4) imposes the mirror obligation on an agent who withdraws, even before commencing any act.
Civil Transactions Law, Royal Decree No. M/191 of 18 June 2023, Arts. 504 and 505 (Bureau of Experts official translation, Ministry of Investment)
Article 486(3) provides that the agent does not exceed his authority where the disposition brings the principal greater benefit, unless the limits were intended by the principal, so an absolute limit has to be expressed as such.
Civil Transactions Law, Royal Decree No. M/191 of 18 June 2023, Art. 486(3) (Bureau of Experts official translation, Ministry of Investment)
Article 2 calculates all periods and deadlines under the Civil Transactions Law by the Hijri calendar, which affects any power of attorney granted for a fixed term.
Civil Transactions Law, Royal Decree No. M/191 of 18 June 2023, Art. 2 (Bureau of Experts official translation, Ministry of Investment)