The Basis of Covering Remedies for Breach of Contract under the New Saudi Civil Transactions Law

Abstract

This dissertation discuss the basis of covering remedies for breach of contract under the new Saudi Civil Transactions Law, with particular reference to how the Sharia concept of Gharar cover these remedies. Doctrinal legal research methodology has been employed. Evaluation of SCTL is provided in this research, enacted under Royal Decree No. M/191/1444, being a milestone of legal reform in KSA not only align the legal structure with Sharia principles but also to meet the requirements of current international standards. The dissertation aims to make a critical analysis of the principles of contract law to ascertain how the new law addresses the formation and enforcement of contracts, as well as the remedies which include specific performance, damages, and liquidated damages. In the comparative analysis between the SCT Law and former Saudi laws, therefore, improvements on the grounds of legal predictability and fairness are underlined to mitigate excessive Gharar. In this dissertation, the permissible limits of minor Gharar and its implications for modern Islamic finance are reviewed, stressing the need for a balance between ethical considerations and the practical needs of contemporary commerce. The paper concludes with recommendations for further legal refinements that should be made to clarify and make the SCTL more effective in governing complex commercial transactions.