THE LAW FIRM OF HAZIM AL MADANI ATTORNEYS AND LEGAL CONSULTANTS
Understanding Contract Expiration: A Comprehensive Guide
The expiration of contracts is a significant topic in civil law, concerning the termination of obligations arising from contracts due to the passage of a specified time or occurrence of a legal circumstance. Notably, contract expiration differs from contract termination, annulment, or cancelation. In these cases, there exists a cause leading to the contract’s termination before its due date, whereas in the case of contract expiration, it has been executed in full, partially, or its effect has naturally ended.
The Civil Transactions Law stipulates that civil rights expire after fifteen years from the date of their establishment, unless a specific duration is governed by a legal text. The law also indicates that the statute of limitations does not apply to rights that are not permitted by Sharia or those that conflict with public morals. Moreover, the statute of limitations applies to all rights of inheritance, but if the status of the heir and the bequeather converges in one person, the statute of limitations does not apply.
Hence, the expiration of contracts in the Kingdom depends on the nature, duration, and circumstances of the right, and the parties cannot act contrary to Sharia or ethics. In case of a dispute regarding contract expiration, the judicial authority is authorized to adjudicate according to the applicable provisions.
We would like to highlight the ways that lead to the expiration of a civil contract as stipulated by the law:
- The contract's duration ends or its purpose is achieved.
- The contract is executed by both parties or discharged by mutual consent.
- The contract is nullified due to a defect in its elements, conditions, or violation of public order or morals.
- The contract is terminated by the will of one or both parties in specific cases determined by law or the contract itself.
- The contract is transferred to someone other than the owner by disposition, death, bankruptcy, or other circumstances that render the transferee unable to execute the contract.
- The occurrence of a force majeure event makes the execution of the contract impossible or substantially harmful.
In essence, we aim to briefly highlight the critical differences between contract expiration, termination, and nullification:
Contract expiration, termination, and nullification are three legal terms used to denote the end of contracts, with the fundamental difference being the cause and effects of the contract’s end on the parties. Contract expiration occurs when the contract is fully executed, when its term arrives, or when its execution becomes impossible due to force majeure conditions. Termination occurs when the parties agree to end the contract before its execution, or when one party breaches its obligations and the other party requests the contract’s cancelation. Nullification happens when the contract is void from the start because it violates Sharia, law, or morals, or because it lacks the validity requirements.
Finally, we would like to point out the impacts of each, where the effect of expiration is to collect the rights of each party from the other and return the subject to its previous state. The effects of termination are to cancel the obligations of each party towards the other and return the subject to its pre-contractual state. As for the effects of nullification, it involves voiding all that arises from the contract and returning the subject to its pre-conceptual state.”