Decree-Law No. 68 of 1980 Promulgating the Commercial Code

Unofficial English translation prepared by Al-Itqan Legal Group for reference purposes. In the event of any discrepancy, the official Arabic text prevails. The text reflects the amendment of Article 24 by Law No. 1 of 2024 and the repeal of Articles 555 to 800 by Law No. 71 of 2020 Promulgating the Bankruptcy Law.

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Article One

The Commercial Code issued by Law No. 2 of 1961 is hereby repealed and replaced by the attached Commercial Code. Any provision that conflicts with the provisions thereof is likewise repealed.

Article Two

The Ministers, each within their respective competence, shall implement this Law, which shall come into force as of 25 February 1981.

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Article 1

The provisions of this Code shall apply to traders and to all commercial activities carried out by any person, even if that person is not a trader.

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Article 2

Subject to the provisions of Article 96, the rules of commercial custom shall apply to commercial matters in respect of which there is no provision in this Code or in other laws relating to commercial matters. Special custom or local custom shall take precedence over general custom. Where no commercial custom exists, the provisions of the Civil Code shall apply.

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Article 3

Commercial activities are those activities carried out by a person with the intention of speculation, even if that person is not a trader.

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Article 4

The following activities in particular shall be deemed commercial activities:
1- The purchase of goods and other tangible and intangible movables with the intention of selling them at a profit, whether they are intended to be sold in their original condition or after being processed or manufactured.
2- The purchase of goods and other tangible and intangible movables with the intention of leasing them, or the leasing thereof with the intention of subleasing them.
3- The sale or sublease of items purchased or leased in the manner set out above.
4- The hiring by a person of a worker with the intention of hiring out that worker’s labour, and the hiring out of the labour of a worker hired for that purpose.
5- Supply contracts.
6- The purchase by a person of land or real property with the intention of making a profit from its sale, whether in its original condition or after subdivision, and the sale of land or real property purchased for that purpose.
7- Activities that may be regarded as analogous to the foregoing activities by reason of the similarity of their characteristics and purposes.

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Article 5

Activities relating to the following matters shall be deemed commercial activities, regardless of the capacity or intention of the person carrying them out:

1- Banking transactions.

2- Current accounts.

3- Currency exchange and financial exchanges.

4- Commercial agency and brokerage.

5- Bills of exchange, promissory notes and cheques.

6- The incorporation of companies and the sale or purchase of their shares and bonds.

7- Public warehouses and pledges created over property deposited therein.

8- The extraction of minerals and oils, the quarrying of stone and other natural resources.

9- Insurance of all kinds.

10- Establishments open to the public, such as public playgrounds, cinemas, hotels, restaurants and auction houses.

11- The distribution of water, electricity and gas, and the provision of postal, telegraphic and telephone communications.

12- Transport by land, sea and air.

13- Business agencies, travel offices, and export and import offices.

14- Printing, publishing, the press, radio and television, the transmission of news, images and advertisements, and the sale of books.

15- Factories, even where associated with agricultural exploitation, and undertakings for construction and manufacture.

16- Contracting for the construction, alteration, restoration and demolition of real property, where the contractor undertakes to provide the raw materials or to supply the labour.

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Article 6

All activities relating to maritime navigation shall be deemed commercial activities, in particular:

1- The construction, sale, purchase, chartering out, chartering in and repair of ships.

2- Contracts relating to the wages and salaries of the master of the ship, its crew and all other persons employed on board.

3- Maritime carriage and consignments, and every operation relating thereto, such as the purchase or sale of the supplies required therefor, including equipment, tools, stores, fuel, ropes, sails and provisions.

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Article 7

All activities relating to air navigation shall be deemed commercial activities, in particular:

1- The construction, sale, purchase, leasing out, leasing in and repair of aircraft.

2- Contracts relating to the wages and salaries of aircrew and all other employees.

3- Air carriage and consignments, and every operation relating thereto, such as the purchase or sale of aircraft equipment and supplies.

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Article 8

Activities connected with or facilitating the commercial transactions referred to in the preceding Articles, and all activities carried out by a trader for the purposes of their trade, shall also be deemed commercial activities.

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Article 9

The contracts and obligations of a trader are presumed to be commercial, unless it is proven that such contracts and obligations relate to civil transactions.

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Article 10

1- The creation by an artist of a work of art, whether personally or by employing workers, and the sale thereof by the artist, shall not be deemed a commercial activity.

2- Likewise, the printing by an author of their own work and the sale thereof by the author shall not be deemed a commercial activity.

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Article 11

1- The sale by a farmer of produce from land owned or cultivated by the farmer, even after such produce has been processed by the means the farmer uses in their agricultural industry, shall not be deemed a commercial activity.
2- However, if the farmer establishes a shop or a factory on a permanent basis for the sale of their produce, whether in its original condition or after processing, the sale in such case shall be deemed a commercial activity.

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Article 12

Where a contract is commercial in respect of one of the contracting parties but not the other, the provisions of the Commercial Code shall apply to the obligations of the other contracting party arising from that contract, unless a provision provides otherwise.

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Article 13

1- Every person who, having the requisite legal capacity, engages in commercial transactions in their own name and adopts such transactions as their profession shall be a trader.

2- Every company shall likewise be deemed a trader, even if it carries on non-commercial activities.

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Article 14

1- The status of trader shall be presumed in respect of any person who assumes it by advertising it in newspapers, bulletins or other media. This presumption may be rebutted by proving that the person assuming such status has not actually engaged in trade.
2- The status of trader shall be established for every person who engages in trade as a profession under an assumed name or concealed behind another person, in addition to its being established for the ostensible person.
3- If a person prohibited from trading under special laws or regulations engages in trade, that person shall be deemed a trader and the provisions of this Code shall apply to them.

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Article 15

A person who carries out an occasional commercial transaction without adopting trade as a profession shall not be deemed a trader. Nevertheless, the commercial transaction carried out by such person shall be subject to the provisions of the Commercial Code.

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Article 16

1- Government ministries, the Municipality, associations and clubs shall not be deemed traders, but the commercial transactions carried out by such bodies shall be subject to the provisions of the Commercial Code.

2- The status of trader shall be established for companies established or owned by the State and other public bodies, for public institutions that principally carry on commercial activity, and for establishments belonging to a foreign state that carry on commercial activity in Kuwait. The provisions arising from the status of trader shall apply to all such bodies, unless the law provides otherwise.

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Article 17

Individuals who practise a simple craft or small trade in which they rely on their own labour to earn small profits to secure their livelihood more than on monetary capital, such as itinerant vendors and owners of small shops, shall not be subject to the obligations of traders relating to commercial books, registration in the Commercial Register, and the provisions on bankruptcy and preventive composition.

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Article 18

Every Kuwaiti who has attained the age of twenty-one years, and who is not subject to any legal impediment relating to their person or to the type of commercial transaction they undertake, shall have the capacity to engage in trade.

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Article 19

1- If a minor has property invested in a trade, the court may order the liquidation of such property and its withdrawal from that trade, or its continuation therein, as the interests of the minor require, having regard, where necessary, to the provisions of the minor’s national law.

2- If the court orders the continuation of the trade, it may grant the minor’s representative a general or limited authorisation to carry out all acts necessary for that purpose. The authorisation shall be entered in the Commercial Register and published in the Register’s gazette.

3- The minor shall be liable only to the extent of their property invested in such trade. The minor may be declared bankrupt, but the bankruptcy shall not extend to property not invested in the trade and shall have no effect on the person of the minor.

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Article 20

1- If serious grounds arise giving reason to fear mismanagement by the minor’s representative, the court may withdraw the authorisation provided for in the preceding Article, without prejudice to the rights acquired by third parties.

2- The court registry shall, within the twenty-four hours following the issuance of the order withdrawing the authorisation, notify it to the Commercial Register office for entry therein and publication in the Register’s gazette.

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Article 21

1- The capacity of women to engage in trade shall be governed by the law of the state of which they are nationals.
2- A foreign wife who engages in trade as a profession shall be presumed to do so with her husband’s permission. If the applicable law permits the husband to object to his wife engaging in trade or to withdraw his prior permission, the objection or withdrawal of permission must be entered in the Commercial Register and published in a gazette. The objection or withdrawal of permission shall have no effect except from the date of its publication in the Commercial Register gazette, and shall not prejudice the rights acquired by third parties.

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Article 22

1- A foreign wife who is a trader shall be presumed to have married under the regime of separation of property, unless the marriage settlement between the spouses provides otherwise and such settlement has been publicised.

2- Publicity shall be effected by entry in the Commercial Register and publication of the settlement in the Register’s gazette.

3- Where publicity in the Commercial Register has been neglected, third parties may prove that the marriage was concluded under a property regime more favourable to their interests.

4- A foreign judgment ordering the separation of the spouses’ property shall not be enforceable against third parties except from the date of its entry in the Commercial Register within whose jurisdiction lies the place where the spouses, or either of them, engage in trade.

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Article 23

1- A non-Kuwaiti may not engage in trade in Kuwait unless they have a Kuwaiti partner or partners, provided that the capital of the Kuwaitis in the joint business is not less than 51% of the total capital of the business.
2- The following are exempt from the foregoing provisions:
(a) Non-Kuwaiti persons who practise a simple craft or simple trade, as referred to in Article 17; such persons may engage in trade without having a Kuwaiti partner.
(b) Non-Kuwaiti persons, in respect of funds they deposit with banks or companies, or agreements they conclude with them for the investment of such funds for their own account, and dealings in foreign currency and precious metals, where this falls within the objects of such companies.

Amended by Law No. 45 of 1989.

Article 24

By way of exception from the provisions of Article 23, paragraph (1), a foreign company may establish a branch in Kuwait and carry on its business there without the need for a local agent.

*Amended by Law No. 1 of 2024 amending Article 24 of Decree-Law No. 68 of 1980 Promulgating the Commercial Code and Article 31 of Law No. 49 of 2016 regarding Public Tenders.

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Article 25

The following persons may not engage in trade:
First: Every trader declared bankrupt within the first year of engaging in trade, unless rehabilitated.
Second: Every person convicted of fraudulent bankruptcy, commercial fraud, theft, swindling, breach of trust, forgery or the use of forged documents, unless rehabilitated.
Any person who contravenes this prohibition shall be punished by imprisonment for a term not exceeding one year and a fine not exceeding two hundred and fifty dinars, or by either of these penalties, and the closure of the commercial establishment shall be ordered in all cases.

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Article 26

A trader shall keep the commercial books required by the nature and size of their trade in a manner that accurately shows their financial position and the debts owed to and by them in connection with their trade.

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Article 27

A trader shall keep at least the following two books:

1- The original journal.

2- The inventory book. Traders whose capital does not exceed five thousand dinars shall be exempt from this obligation, in addition to the individuals practising a simple craft or small trade provided for in Article 17.

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Article 28

All financial operations carried out by the trader, as well as the expenses incurred by the trader on themselves and their family, shall be entered in the original journal. Such entries shall be made on a daily basis.

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Article 29

1- The details of the goods held by the trader at the end of their financial year shall be entered in the inventory book, or a summary statement thereof if their details are set out in separate books and lists, in which case such books and lists shall be deemed an integral part of the said book.

2- A copy of the trader’s annual balance sheet shall also be entered in the inventory book each year, if it is not entered in any other book.

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Article 30

1- Commercial books must be free of any blank spaces, marginal notes, erasures or interlineations in the entries made therein.

2- Before the journal and the inventory book are used, each of their pages must be numbered and each of their leaves must be stamped by the Notary Public.

3- Within two months of the end of each financial year, the trader shall present these two books to the Notary Public to be endorsed as closed, in the presence of the trader and without the books being retained by the Notary Public. If the pages of these two books are used up before the end of the financial year, the trader must present them to the Notary Public to be endorsed to that effect after the last entry.

4- If the activity of the commercial establishment ceases, the trader or their heirs shall present the two said books to the Notary Public to be endorsed to that effect.

5- Stamping and endorsement in the foregoing cases shall be free of charge.

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Article 31

A trader shall keep a true copy of all correspondence and telegrams sent by them for the purposes of their trade, and shall likewise keep all correspondence, telegrams, invoices and other documents received by them in connection with their trade.

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Article 32

The trader or their heirs shall keep the original journal and the inventory book for ten years from the date of their closure, and shall also keep the correspondence, documents and copies referred to in the preceding Article for five years.

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Article 33

When hearing a case, the court may, of its own motion or at the request of either party, order the production of commercial books and papers in order to examine the entries relating solely to the matter in dispute and to draw from them such conclusions as it deems fit.

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Article 34

1- A business (commercial establishment) consists of the trader’s premises and the rights attached to those premises.

2- A business comprises a set of tangible and intangible elements that vary according to circumstances, and which include in particular goods, commercial furniture, industrial machinery, clientele, the trade name, the leasehold right, trademarks and trade descriptions, patents, licences, designs and models.

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Article 35

The rights of the owner of a business over the various elements comprised in it shall be determined by the special provisions relating thereto. In the absence of a special provision, the general rules shall apply.

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Article 36

1- The sale of a business may only be effected by an official instrument.

2- The contract of sale shall specify separately the price of the goods, the tangible equipment and the intangible elements. Payments made against the price shall be applied first to the price of the goods, then to the price of the tangible equipment, and then to the price of the intangible elements, notwithstanding any agreement to the contrary.

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Article 37

1- The contract of sale of a business shall be publicised by entry in the Commercial Register.
2- Such entry shall preserve the seller’s privilege for a period of five years from its date. The entry shall be deemed cancelled if it is not renewed within that period.
3- The entry shall be struck off by consent of the parties concerned or pursuant to a final judgment.

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Article 38

1- A seller who brings an action for rescission must notify the creditors holding registered charges over the business at the addresses for service stated in their entries.
2- If the seller stipulated at the time of sale that the sale would be rescinded by operation of law if the price is not paid on the specified date, or if the seller and the buyer agree to rescind the sale, the seller must notify the registered creditors, at their addresses for service, of the rescission or of the agreement thereto.

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Article 39

If the sale of a business by public auction is requested, the applicant must notify the previous sellers at the addresses for service stated in their entries, informing them that if they do not bring an action for rescission within one month of the date of notification, their right thereto shall lapse as against the successful bidder.

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Article 40

A business may be pledged. If the scope of the pledge is not precisely specified, it shall extend only to the trade name, the leasehold right, the clientele and the goodwill.

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Article 41

1- A pledge may only be created by an official instrument.

2- The pledge contract must include a declaration by the debtor as to whether the seller holds a privilege over the business, and must also include the name of the insurance company that has insured the business against fire, if any.

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Article 42

1- The contract pledging a business shall be publicised by entry in the Commercial Register.

2- Such entry shall preserve the privilege for a period of five years from its date. The entry shall be deemed cancelled if it is not renewed within that period.

3- The entry shall be struck off by consent of the parties concerned or pursuant to a final judgment.

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Article 43

The pledgor shall be responsible for keeping the pledged business in good condition.

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Article 44

1- If the owner of the business fails to pay the price or the balance thereof to the seller, or the debt on its due date to the pledgee creditor, the seller or the pledgee creditor may, eight days after serving formal notice on their debtor and on the holder of the business, submit a petition to the Judge of Urgent Matters requesting permission to sell by public auction all or some of the components of the business covered by the privilege of the seller or the pledgee creditor.
2- The sale shall take place at the place, on the day and at the hour, and in the manner, determined by the judge, and shall be advertised at least ten days before it takes place.

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Article 45

The seller and the pledgee creditors shall have, over the sums arising from insurance where they become payable, the same rights and privileges as they had over the insured items.

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Article 46

The lessor of the premises in which the pledged furniture and machinery used in operating the business are located may not exercise their privilege for more than two years.

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Article 47

1- The trade name shall consist of the name and surname of the trader. It must be clearly distinguishable from previously registered trade names.

2- The trade name may include particulars relating to the persons named therein concerning the type of trade to which it is dedicated. It may also include an original designation. In all cases, the trade name must correspond to the truth, must not be misleading and must not prejudice the public interest.

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Article 48

1- The trade name shall be entered in the Commercial Register in accordance with the provisions of the law.
2- After registration, no other trader may use that name in the type of trade they carry on.
3- If the name and surname of a trader resemble a trade name entered in the Register, the trader must add to their name a particular that distinguishes it from the previously registered name.

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Article 49

A trader shall conduct their commercial transactions, and sign their papers relating to such transactions, under their trade name, and shall display that name at the entrance of their business.

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Article 50

A trade name may not be disposed of independently of the disposal of the business. However, if the owner of a business disposes of the business, the disposal shall not include the trade name unless this is expressly or impliedly provided.

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Article 51

1- A person to whom the ownership of a business has been transferred may not use the trade name of their predecessor unless that name has passed to them or the predecessor has authorised its use. In all cases, they must add to that name a particular indicating the transfer of ownership.
2- If the predecessor consents to the use of the original trade name without any addition, the predecessor shall be liable for the obligations of the successor contracted under that name if the successor is unable to perform such obligations.

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Article 52

1- A person who acquires a trade name together with a business succeeds their predecessor in the obligations and rights arising under that name. Any agreement to the contrary shall not be effective against third parties unless it is entered in the Commercial Register or notified to the persons concerned.
2- Liability for the obligations of the predecessor shall lapse on the expiry of five years from the date of transfer of the business.

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Article 53

A person to whom a business is transferred without its trade name shall not be liable for the obligations of their predecessor, unless there is an agreement to the contrary entered in the Commercial Register.

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Article 54

1- The names of companies shall be governed by the legal provisions applicable to them.

2- A company may retain its original name without amendment if a new partner joins it, or if a partner whose name is included in the company name withdraws from it, provided that such partner or their heirs have consented to the retention of the name.

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Article 55

1- If a trade name is used by a person other than its owner, or is used by its owner in a manner contrary to the law, the persons concerned may request that its use be prohibited and, if it is entered in the Commercial Register, that it be struck off, and may claim compensation where appropriate.

2- These provisions shall apply to the use of trademarks and trade descriptions in the manner set out in this Code.

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Article 56

A trader may not resort to deceit or fraud in marketing their goods, nor may they publish false statements liable to harm the interests of a competing trader; otherwise, they shall be liable for compensation.

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Article 57

A trader may not disseminate untrue information concerning the origin or description of their goods or the importance of their trade, nor falsely claim to hold a rank, certificate or award, nor resort to any other misleading method, with the intention of diverting the clientele of a competing trader; otherwise, they shall be liable for compensation.

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Article 58

A trader may not induce the workers or employees of another trader to assist them in diverting that trader’s clientele, or to leave that trader’s service and enter their own service and disclose to them the secrets of their competitor. Such acts shall be deemed unlawful competition giving rise to compensation.

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Article 59

If a trader gives a former employee or worker an untrue certificate of good conduct, and such certificate misleads another trader acting in good faith and causes them harm, the other trader may, depending on the case and the circumstances, have recourse against the first trader for appropriate compensation.

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Article 60

A person whose profession is to supply commercial houses with information on the affairs of traders and who gives untrue information about the conduct or financial position of a trader, whether intentionally or through gross negligence, shall be liable to compensate the damage resulting from their fault.

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Article 60 bis, Article 60 bis (a), Article 60 bis (b), Article 60 bis (c), Article 60 bis (d) and Article 60 bis (e)

Repealed

*Repealed by Law No. 10 of 2007 regarding the Protection of Competition.

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Articles 61 to 85

Repealed

*Repealed by Law No. 13 of 2015.

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Article 86

A trade description is any statement relating directly or indirectly to the following:
1- The number, quantity, size, measure, weight or capacity of goods.
2- The place or country in which the goods were manufactured or produced.
3- The method of their manufacture or production.
4- The elements of which they are composed.
5- The name or attributes of the producer or manufacturer.
6- The existence of patents or other industrial property rights, or any commercial or industrial privileges, awards or distinctions.
7- The name or form by which certain goods are known or customarily presented.

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Article 87

A trade description must correspond to the truth in every respect, whether it is placed on the products themselves, on shops or warehouses or their signs, on wrappings, lists, letters or advertising media, or on any other means used in presenting the goods to the public.

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Article 88

1- The name or address of the seller may not be placed on products originating from a country other than that in which the sale takes place, unless accompanied by an accurate statement, written in conspicuous characters, of the country or place in which they were manufactured or produced.

2- Persons residing in a place renowned for the production or manufacture of certain products, who trade in similar products originating from other places, may not place their marks on such products if those marks are liable to mislead the public as to the origin of those products, even if the marks do not include the names or addresses of such persons, unless measures are taken to prevent any confusion.

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Article 89

A manufacturer may not use the name of the place in which they have a principal factory on products manufactured on their behalf in another place, unless that name is accompanied by a statement of the latter place in a manner that precludes any confusion.

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Article 90

1- Awards, medals, diplomas or honorary distinctions of any kind may not be mentioned except in respect of the products to which such distinctions apply, and in respect of the persons and trade names to which they were granted or to those to whom the rights thereto have passed, provided that such mention includes an accurate statement of their date and type and of the exhibitions or competitions at which they were awarded.

2- A person who has participated with others in exhibiting products may not use, for their own products, the distinctions awarded to the joint exhibits, unless they clearly state the source and type of such distinctions.

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Article 91

1- Where the quantity, size, measure, capacity, weight, origin or constituent elements of products are factors that bear on the assessment of their value, the competent Minister may, by decision, prohibit the import, sale or offering for sale of such products unless they bear one or more of these particulars.
2- The competent Minister shall determine, by decision, the manner in which such particulars are to be placed on products and the procedures to be substituted where this is not possible, provided that such particulars are written in the Arabic language.

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Article 92

The following shall be punished by imprisonment and a fine not exceeding six hundred dinars, or by either of these penalties:
1- Repealed.
2- Repealed.
3- Repealed.
4- Any person who, in bad faith, contravenes the provisions of Articles 87 to 91 relating to trade descriptions.

Paragraphs 1, 2 and 3 of Article 92 were repealed by Law No. 13 of 2015. Text of the Article before amendment:

The following shall be punished by imprisonment and a fine not exceeding six hundred dinars, or by either of these penalties:

1- Any person who counterfeits a mark registered in accordance with the law, or imitates it in a manner liable to mislead the public, and any person who in bad faith uses a counterfeit or imitated mark.

2- Any person who in bad faith places on their products a mark owned by another.

3- Any person who knowingly sells, offers for sale or circulation, or possesses for the purpose of sale, products bearing a counterfeit or imitated mark or a mark placed thereon without right.

4- Any person who, in bad faith, contravenes the provisions of Articles 87 to 91 relating to trade descriptions.

*The phrase “shall be punished by imprisonment for a term not exceeding three years” was replaced by the phrase “shall be punished by imprisonment” pursuant to Law No. 10 of 1987.

Articles 93 to 95

Repealed

*Repealed by Law No. 13 of 2015.

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Article 96

Except as provided in this Book, the provisions of the Civil Code shall apply to commercial obligations and contracts.

Article 97

Persons jointly bound by a commercial debt shall be jointly and severally liable for that debt, unless the law or an agreement provides otherwise.

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Article 98

A guarantee (suretyship) shall be commercial if the guarantor guarantees a debt that is deemed commercial in respect of the debtor.

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Article 99

In a commercial guarantee, the guarantors shall be jointly and severally liable among themselves and jointly and severally liable with the debtor. The creditor may choose whom to claim against: the creditor may claim against the debtor or against the guarantor. A claim against one of them shall not extinguish the right to claim against the other; after claiming against one of them, the creditor may claim against the other, and may claim against both together.

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Article 100

If a trader performs work or services for the account of another in connection with their commercial activity, they shall be deemed to have done so for consideration, unless the contrary is proven. The consideration shall be determined in accordance with custom. Where there is no custom, the judge shall assess the consideration.

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Article 101

A loan shall be commercial if it is intended that the borrowed sums be spent on commercial activities.

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Article 102

1- The creditor shall be entitled to interest on a commercial loan unless otherwise agreed. If the rate of interest is not specified in the contract, the interest due shall be the legal interest rate of 7%.
2- If the contract includes an agreement on the rate of interest and the debtor delays payment, default interest shall be calculated on the basis of the agreed rate.

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Article 103

Interest shall be paid at the end of each year if the term of the loan is one year or more, and on the due date of the debt if the term is less than one year, unless the parties agree otherwise.

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Article 104

If the term of the loan is fixed, the creditor may not be compelled to accept repayment of the debt before its maturity unless the debtor pays the interest accruing for the remaining period.

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Article 105

If a specified time is fixed for the performance of a contract and it expires without the debtor having performed, the creditor may not thereafter be compelled to accept performance.

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Article 106

If one of the contracting parties has reserved the right to rescind the contract in return for payment of a specified sum, their performance of the obligations imposed on them by the contract, or their acceptance of the other contracting party’s performance of its obligations, shall extinguish the right of rescission so reserved.

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Article 107

Performance of commercial obligations may only be demanded during customary business hours.

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Article 108

In commercial matters, the debtor shall be put on notice or notified by official notice or by registered letter with acknowledgement of receipt. In cases of urgency, notice or notification may be given by telegram.

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Article 109

The judge may not grant a debtor under a commercial obligation a period of grace for its performance or allow payment by instalments, except in the cases provided for in this Code or where absolutely necessary.

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Article 110

If the subject matter of a commercial obligation is a sum of money whose amount was known at the time the obligation arose, and the debtor delays its payment, the debtor shall be bound to pay the creditor, as compensation for the delay, legal interest at the rate of seven per cent.

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Article 111

1- The contracting parties may agree on a different rate of interest, provided that such rate does not exceed the rates announced by the Central Bank, which are determined by the Bank’s Board of Directors with the approval of the Minister of Finance. If they agree on interest exceeding such rates, it must be reduced to the rates announced on the date of conclusion of the agreement, and any amount paid in excess must be refunded.
2- Any commission or benefit of whatever kind stipulated by the creditor shall, if together with the agreed interest it exceeds the aforementioned maximum, be deemed disguised interest and shall be subject to reduction if it is proven that such commission or benefit does not correspond to any actual service rendered by the creditor or to any legitimate expense.

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Article 112

Entitlement to default interest, whether legal or contractual, shall not be conditional upon the creditor proving that they have suffered damage as a result of the delay.

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Article 113

Interest for delay in the payment of commercial debts shall accrue as soon as they fall due, unless the law or an agreement provides otherwise.

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Article 114

1- The creditor may claim supplementary compensation in addition to default interest without having to prove that the damage exceeding such interest was caused by the debtor’s fraud or gross negligence.
2- However, if the creditor, in pursuing their right, has in bad faith caused the dispute to be prolonged, the court may reduce the interest, whether legal or contractual, or may decline to award it altogether for the period during which the dispute was prolonged without justification.

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Article 115

Interest may not be charged on accumulated interest, and the total interest received by the creditor may in no case exceed the principal, all in the cases provided for in this Code and without prejudice to commercial rules and customs and to any rules laid down for long-term loans.

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Article 116

A person holding a receipt shall be qualified to receive payment, provided that the payer is unaware of any grounds preventing payment to the holder.

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Article 117

Possession by the debtor of the instrument of debt shall constitute a presumption that the debtor has been discharged of the debt until the contrary is proven.

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Article 118

In commercial matters, the obligations of traders towards one another relating to their commercial activities shall be time-barred on the expiry of ten years from the date on which performance of the obligation fell due, unless the law provides for a shorter period. Final judgments issued in disputes arising from the obligations referred to in the preceding paragraph shall likewise lapse on the expiry of ten years.

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Article 119

Communicating current prices to a number of persons, or offering property for sale by sending a schedule of the items, their prices and pictures, shall not be deemed an offer.

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Article 120

The sale of commercial property that does not exist at the time of the contract, but which can be made ready and delivered at the time of delivery, shall be valid.

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Article 121

An item may be sold where the parties contemplated at the time of the contract the possibility of its destruction. If such destruction occurs, the buyer shall not recover the price. However, if the seller was certain at the time of the contract that the item sold had been destroyed, the sale shall be invalid.

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Article 122

1- If it is agreed that the buyer shall specify the form, size or other detailed characteristics of the item sold, the buyer must make such specification within a reasonable period; otherwise, the seller may claim rescission and compensation.

2- After the expiry of that period, the seller may specify such characteristics, and such specification shall be final if the buyer does not object to it within a reasonable period of being notified of it.

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Article 123

If it is agreed that the price shall be the market price, in case of doubt the price shall be the market price at the place and time at which the item sold must be delivered to the buyer. If there is no market at the place of delivery, reference shall be made to the market price at the place whose prices custom requires to be applied.

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Article 124

If the contracting parties have not fixed a price for the sale, the sale shall not be void where it is apparent from the circumstances that the parties intended to adopt the price current in the trade or the price customarily applied in dealings between them.

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Article 125

The determination of the price may be entrusted to a third party. If that party does not determine the price for any reason, the buyer shall be bound by the market price on the day of sale. If the market price cannot be ascertained, the judge shall determine the price.

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Article 126

1- If the price is fixed on the basis of weight, net weight shall be taken into account unless the parties have agreed or custom has established otherwise.

2- Custom shall determine the tolerated shortfall in goods due to carriage or otherwise, or where it is agreed to deliver an approximately specified quantity.

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Article 127

1- Compulsory pricing laws and decisions shall not apply to sales concluded before their entry into force, even if the price falls due at a later date.
2- In sales concluded while such laws and decisions are in force, the fixed price may not be exceeded; otherwise, the buyer may refuse to pay the excess or may recover it, notwithstanding any agreement to the contrary.

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Article 128

If it is agreed that delivery shall be effected as soon as the item sold reaches the carrier, the risk of loss shall lie with the seller until the item sold is delivered to the carrier and shall thereafter pass to the buyer.

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Article 129

1- If, at the buyer’s request, the seller dispatches the item sold to a place other than the place specified for its delivery, the risk of loss shall lie with the buyer from the time the item sold is delivered to the person undertaking its carriage.

2- If the seller departs from the buyer’s instructions regarding the method of dispatch without justified necessity, the seller shall be liable for any damage to the item sold resulting from such departure.

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Article 130

1- If no time is specified for delivery, delivery must take place as soon as the contract is concluded, unless the nature of the item sold or custom requires a different time.

2- If the goods have a particular season, delivery must take place before the end of that season.

3- If the buyer is entitled to specify a time for delivery, the seller shall be bound to deliver at the time specified by the buyer, having regard to custom and to the requirements of the nature of the item sold.

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Article 131

1- If the seller fails to deliver at the specified time, the contract shall be deemed rescinded without the need for notice, unless the buyer notifies the seller within three days of that time that the buyer insists on the performance of the contract.

2- The buyer may claim from the seller, by way of compensation, the difference between the agreed price and the amount the buyer paid in good faith to obtain a similar item.

3- If the item sold consists of goods with a known market price, the buyer may, even without having purchased similar goods, claim from the seller the difference between the agreed price and the market price on the day fixed for delivery.

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Article 132

1- If the goods delivered differ from the agreed goods in quantity or kind, the buyer may not claim rescission unless the difference is so serious as to render the goods delivered unfit for the purpose for which the buyer intended them. In other cases, the price shall merely be reduced or supplemented according to the shortfall or excess in quantity or kind. The foregoing applies unless there is an agreement or custom to the contrary.

2- The buyer’s right to claim rescission or a reduction in price, and the seller’s right to claim a supplement to the price, shall be time-barred on the expiry of one year from the date of actual delivery.

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Article 133

1- If the price is not paid at the agreed time, the seller may, after giving notice to the buyer, claim from the buyer the difference between the agreed price and the price obtained on the resale of the item in good faith.

2- If the item sold consists of goods with a known market price, the seller may claim from the buyer the difference between the agreed price and the price on the day fixed for performance.

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Article 134

The buyer may pay the price before its due date unless otherwise agreed. The agreement or custom shall determine the discount from the price in return for payment before the due date.

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Article 135

1- If the buyer refuses to take delivery of the item sold, the seller may deposit it with a custodian and sell it by public auction after the expiry of a reasonable period, which the seller shall determine and notify to the buyer without delay. Perishable items may be sold by public auction without the need for such notice.
2- If the item sold has a known market price, it may be sold by private treaty at that price through a broker.
3- The seller must deposit the proceeds of the sale with the court treasury, without prejudice to the seller’s right to deduct the price and the costs of deposit and sale.

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Article 136

In a sale by instalments, if the buyer fails to pay one of the agreed instalments of the price, rescission of the sale may not be ordered if it is established that the buyer has performed the greater part of their obligations.

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Article 137

1- If the seller retains ownership of the movable sold until all instalments of the price have been paid, the buyer shall acquire such ownership upon payment of the final instalment. The buyer shall bear the risk of loss of the item sold from the time of its delivery to the buyer.

2- Without prejudice to the provisions set out in the Chapter on bankruptcy, a retention of title clause shall not be enforceable against third parties unless it is recorded in a document bearing a fixed date that precedes the third party’s right or the enforcement measures taken by creditors against the item sold.

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Article 138

The buyer may not dispose of the item sold before paying all the instalments unless the seller consents thereto in writing. Any disposal made by the buyer to a third party in breach of this provision shall not be enforceable against the seller if it is proven that the third party knew, at the time of the disposal, that the price had not been paid in full.

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Article 139

If the buyer disposes of the item sold before paying all the instalments of the price and without the seller’s consent, the seller may require the buyer to pay the remaining instalments immediately.

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Article 140

The provisions on sale by instalments set out in the preceding Articles shall apply even if the contracting parties describe the sale as a lease.

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Article 141

A CIF sale is the sale of goods shipped by sea to a specified destination for a lump-sum price covering the price of the goods, their insurance and the freight.

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Article 142

1- The seller shall, at the seller’s own expense, conclude a contract of carriage on the usual terms for the carriage of the goods to the agreed port of destination by the customary route.

2- The seller shall pay the freight and any other costs of discharging the goods as determined at the time and place of shipment.

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Article 143

1- The seller shall load the goods, at the seller’s own expense, on board the ship at the port of shipment on the date agreed in the contract of sale, or within a reasonable time if the parties have not fixed a time for shipment.

2- The seller shall, at the seller’s own expense, obtain the licences required for the export of the goods from the place of shipment. The seller shall also bear the costs of packing and the costs of measuring, weighing, counting or checking the quality of the goods where such operations are necessary for shipment. The seller shall likewise bear the taxes and duties payable on the goods by reason of their export or shipment.

3- The seller shall notify the buyer without delay of the date of shipment of the goods and the name of the ship.

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Article 144

The seller shall bear any damage to the goods until the moment they pass the ship’s rail during loading, after which such risk shall pass to the buyer.

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Article 145

1- The seller shall, at the seller’s own expense, conclude with a reputable insurer a contract of marine insurance on the goods covering the risks of the voyage. If the goods sold are shipped in instalments, each instalment must be insured separately. The seller may not act as insurer vis-à-vis the buyer.

2- The insurance must be concluded by a negotiable policy on the terms customary at the port of shipment, provided that the sum insured is not less than the price stated in the contract of sale plus ten per cent.

3- The seller shall only be bound to insure against ordinary transport risks. The seller shall not be bound to insure against risks specific to a particular trade unless so agreed with the buyer. Nor shall the seller be bound to insure the goods sold against war risks, unless the contract provides otherwise.

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Article 146

1- The seller shall send the buyer without delay a clean, negotiable bill of lading relating to the goods sold. It must include evidence that the goods were loaded on board the ship on the date or within the period specified for shipment, and must entitle the buyer or the buyer’s representative to take delivery of the goods by endorsement to them or by transfer of that right to them by the appropriate legal means. If the bill of lading is a “received for shipment” bill, it must be endorsed by the carrier on the date of shipment to the effect that the goods have been loaded on board the ship.
2- A bill of lading shall be deemed clean if it does not contain express additional clauses confirming defects in the goods sold or in their packing. Such clauses shall not include a reference in the bill of lading to the previous use of containers or wrappings, to non-liability for damage caused by the nature of the goods sold, or to the carrier’s lack of knowledge of the contents or weight of the packages.
3- The bill of lading shall be accompanied by an invoice for the goods sold and the insurance policy, or a certificate in lieu thereof containing its essential terms and conferring on its holder the same rights as those established by the policy, as well as any other documents that the buyer may require to prove the conformity of the goods with the contract. If the bill of lading refers in certain respects to a charterparty, a copy of the charterparty must be attached.

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Article 147

1- The buyer shall not be bound to accept the documents sent by the seller if they do not conform to the conditions set out in the contract of sale. The buyer shall be deemed to have accepted such documents if the buyer does not object to them within seven days of the date of receipt. Objection shall be made by notifying the seller to send documents conforming to the conditions within an appropriate period. After the expiry of that period, the buyer may claim rescission of the sale together with compensation where appropriate.
2- If the buyer returns the documents for specific reasons or accepts them with reservations, the buyer may not thereafter raise any objection other than the reasons and reservations previously stated.
3- If the buyer returns the documents without justification, the buyer shall be liable to compensate the seller for any resulting damage.

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Article 148

If the ship on which the goods sold were loaded arrives before the documents, or if the documents arrive incomplete, the seller must, immediately upon being notified thereof, do everything necessary to enable the buyer to obtain a copy of the documents that have not arrived or to complete the missing documents. The seller shall bear the expenses required therefor, together with compensation where appropriate.

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Article 149

When the ship arrives, the buyer shall be bound to take delivery of the goods after inspecting them and verifying their conformity with the documents. The buyer shall bear the expenses incurred on the goods during the sea voyage until their arrival at the port of destination, unless it was agreed that such expenses are included in the freight. The buyer shall also bear any import duties or customs duties payable on the goods sold.

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Article 150

If the goods are found not to conform to the documents, and the non-conformity does not exceed the tolerance permitted by custom, the buyer shall be bound to accept them with a reduction in price assessed by experts in accordance with the custom prevailing at the port of destination.

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Article 151

An FOB sale is a sale in which the goods are delivered at the port of shipment on board the ship designated by the buyer for their carriage.

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Article 152

The buyer shall conclude the contract of carriage of the goods, pay the freight, and notify the seller in good time of the name of the ship chosen for the carriage, the place and date of loading, or the period specified for loading.

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Article 153

1- The seller shall be bound to pack the goods and load them on board the ship designated by the buyer on the date or within the period specified for shipment.

2- The seller shall bear the costs of packing and the costs of inspection, measuring, weighing or counting required for the shipment of the goods.

3- The seller shall notify the buyer without delay of the shipment of the goods and send the buyer the documents evidencing it, provided that the buyer bears the costs of the notification and of sending the documents.

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Article 154

The seller shall, at the seller’s own expense, obtain the export permit and complete all procedures relating to the shipment of the goods.

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Article 155

If the buyer requests a certificate of origin of the goods, the seller shall be bound to obtain it and provide it to the buyer.

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Article 156

The seller shall provide every assistance to enable the buyer to obtain the bill of lading and other documents issued in the country of shipment that the buyer may require in order to import the goods into the country of destination or, where necessary, to pass them in transit through another state. The buyer shall bear the expenses required to obtain such documents.

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Article 157

The seller shall bear all expenses required for loading the goods, and shall bear the risk of any damage to the goods until the moment they pass the ship’s rail during loading. Any subsequent damage to the goods and any expenses incurred on them thereafter shall be borne by the buyer.

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Article 158

If the buyer fails to notify the seller of the name of the ship in good time, or reserves the right to fix a period for taking delivery of the goods or to determine the port of shipment and fails to give specific instructions within that period, the buyer shall bear the resulting additional expenses and shall bear the risk of any damage to the goods from the date of expiry of the period agreed for delivery, provided that the goods have been specifically identified.

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Article 159

If the ship arrives after the expiry of the period specified for shipment, or is unable to load the goods within that period, the buyer shall bear the resulting additional expenses and shall bear the risk of any damage to the goods from the date of expiry of the period specified for shipment, provided that the goods sold have been specifically identified.

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Article 160

A contract containing terms that place on the seller the risk of loss after the goods have been loaded, or that make the performance of the contract conditional upon the safe arrival of the ship, or that give the buyer the option of accepting the goods at the buyer’s discretion or according to the sample delivered to the buyer, shall cease to be a CIF or FOB sale and shall be deemed a sale with delivery at the place of arrival.

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Article 161

1- A contract of carriage is an agreement under which the carrier undertakes to carry an item or a person to a specified destination in return for a specified fare or freight.
2- A contract of carriage is concluded by mere agreement, unless the parties expressly or impliedly agree to defer it until the time of delivery.
3- The contract may be proven by all means.

Article 162

1- Every action arising from a contract for the carriage of goods, a contract for the carriage of persons or a contract of commission agency for carriage shall be time-barred after one year. In respect of an action for liability for the total loss of goods, this limitation period shall run from the day on which delivery should have taken place, and in respect of delay, damage or partial loss of goods, from the day of delivery or from the day on which the goods were placed at the disposal of the consignee.
2- A person who has committed an intentional fault or gross negligence may not rely on the limitation period.
3- Any agreement contrary to the foregoing provisions shall be null and void.

Article 163

1- The consignment note shall be drawn up in two copies, one of which shall be signed by the carrier and delivered to the consignor, and the other signed by the consignor and delivered to the carrier.

2- The consignment note shall include in particular:

a- The date on which it was drawn up.

b- The names and domiciles of the consignor, the consignee, the carrier and the forwarding (commission) agent, if any.

c- The place of departure and the place of destination.

d- The nature of the item carried, its weight, volume and method of packing, the number of packages, and any other particular required to identify the item and assess its value.

e- The time specified for carriage.

f- The freight, together with a statement of the person liable to pay it.

g- Any special agreements relating to the means and route of carriage and the compensation payable for loss of, damage to or delay in the arrival of the item.

3- Evidence contrary to the contents of the consignment note may be adduced by all means.

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Article 164

1- The consignment note may be issued in the name of a specified person, to order, or to bearer.
2- The consignment note shall be transferred in accordance with the rules on assignment if it is a named document, by endorsement if it is to order, and by delivery if it is to bearer.

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Article 165

If no consignment note is drawn up, the carrier must, at the consignor’s request, deliver to the consignor a receipt signed by the carrier acknowledging receipt of the item to be carried. The receipt must be dated and must contain particulars sufficient to identify the item carried and the freight.

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Article 166

1- The consignor shall be bound to deliver the item to the carrier at the carrier’s domicile, unless it is agreed that it be delivered at another place. If the carriage requires special preparations on the part of the carrier, the consignor must notify the carrier thereof sufficiently in advance of delivery.

2- The carrier may request that packages be opened before taking delivery of them in order to verify the accuracy of the particulars stated by the consignor.

3- If the nature of the item requires special preparation for carriage, the consignor must take care to pack it in a manner that protects it from loss or damage and does not expose persons or other items carried with it to harm.

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Article 167

1- The consignor shall be bound to pay the freight and other expenses due to the carrier, unless it is agreed that they be borne by the consignee, in which case the consignor and the consignee shall be jointly and severally liable for payment of the freight and expenses.

2- The carrier shall not be entitled to freight for items lost by force majeure.

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Article 168

1- While the item is in the carrier’s possession, the consignor may instruct the carrier to return it or to redirect it to a person other than the consignee, provided that the consignor pays the carrier the freight for the carriage already performed and compensates the carrier for expenses and damage.
2- However, the consignor may not exercise this right:
a- If the consignor is unable to produce the consignment note received from the carrier.
b- If the item has arrived and the consignee has requested delivery of it. This right shall pass to the consignee from the time the consignee receives the consignment note.

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Article 169

1- The owner of an item may dispose of it by sale or otherwise while it is in the carrier’s possession under the consignment note.

2- The owner shall bear the risk of loss of the item during carriage and shall have recourse against the carrier where there are grounds for recourse.

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Article 170

The consignee shall assume the obligations arising from the contract of carriage if the consignee accepts them expressly or impliedly. In particular, a request by the consignee for delivery of the item under the consignment note, or the issuance by the consignee of instructions concerning the item after receiving the consignment note, shall be deemed implied acceptance.

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Article 171

1- The carrier shall be bound to load and stow the item in the means of transport, unless otherwise agreed.

2- If it is agreed that the consignor shall load or stow the goods, the carrier must refuse to carry them if the loading or stowage is affected by a defect that would not escape the notice of an ordinary carrier.

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Article 172

1- The carrier shall follow the agreed route. If no particular route has been agreed, the carrier must follow the shortest route.

2- Nevertheless, the carrier may change the agreed route or depart from the shortest route if necessity so requires.

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Article 173

1- The carrier shall guarantee the safety of the item during the performance of the contract of carriage and shall be liable for its total or partial loss, for damage to it, or for delay in its delivery. The expiry of a reasonable period after the end of the time specified, or required by custom, for the arrival of the item without the item being found shall be treated as total loss.

2- The carrier shall not be liable for any shortfall in weight or volume ordinarily suffered by the item during carriage by reason of its nature, unless it is proven that the shortfall arose from other causes.

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Article 174

The carrier shall not be liable for the loss of money, securities, jewellery or other valuables entrusted to it for carriage, except to the extent of the written particulars provided by the consignor concerning them at the time of delivery.

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Article 175

The carrier shall be liable for the acts of the persons it employs in performing its obligations under the contract of carriage.

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Article 176

1- If the item is lost or damaged and its value is not stated in the consignment note, compensation shall be assessed on the basis of the actual value of what was lost or damaged at the place of destination and on the day specified for arrival, according to the prevailing market price. If the item has no specific price, its value shall be determined by an expert appointed by the Judge of Urgent Matters.

2- If the value of the item is stated in the consignment note, the carrier may dispute such value and may prove the actual value of the item by all means.

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Article 177

If, as a result of damage to the item, its partial loss or delay in its arrival, the item is no longer fit for its intended purpose, and the carrier’s liability is established, the person claiming compensation may abandon the item to the carrier in return for full compensation.

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Article 178

1- Taking delivery of the item without reservation shall extinguish the right of recourse against the carrier for damage, partial loss or delay in arrival, unless the consignee establishes the condition of the goods and brings an action against the carrier within thirty days of the date of delivery.

2- The condition of the goods shall be established by administrative officials or by an expert appointed by the Judge of Urgent Matters.

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Article 179

1- If several carriers successively perform a single contract of carriage, the first carrier shall be liable to the consignor and the consignee for the entire carriage, and any clause to the contrary shall be null and void.
2- Each of the carriers succeeding the first carrier shall be liable to the first carrier, the consignor or the consignee only for damage occurring during that carrier’s portion of the carriage. If it is impossible to determine the portion during which the damage occurred, the compensation shall be apportioned among all the carriers in proportion to the freight due to each of them. If any of them is insolvent, that carrier’s share shall be apportioned among the others in the same proportion.

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Article 180

1- The carrier may only disclaim liability for loss of or damage to the item, or for delay in its delivery, by proving force majeure, an inherent defect in the item, or the fault of the consignor or the consignee.
2- If the carrier has made a reservation stipulating non-liability for damage resulting from a defect in the packing of the goods, the consignor or the consignee must prove that the damage did not result from that defect.

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Article 181

1- Any clause exempting the carrier from liability for the total or partial loss of, or damage to, the item shall be null and void. Any clause exempting the carrier from such liability where it arises from the acts of its agents shall likewise be null and void.

2- Any clause that would oblige the consignor or the consignee, in any capacity whatsoever, to pay all or part of the cost of insurance against the carrier’s liability shall be treated as an exemption from liability.

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Article 182

1- Except in cases of intentional fault or gross negligence on the part of the carrier or its agents, the carrier may:

a- Limit its liability for loss or damage, provided that the stipulated compensation is not nominal.

b- Stipulate exemption from liability for delay.

2- A clause exempting or limiting liability must be in writing, and the carrier must have informed the consignor of it.

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Article 183

If the item is carried in the custody of the consignor or the consignee, the carrier shall not be liable for its loss or damage unless fault on the part of the carrier or its agents is proven.

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Article 184

1- The carrier shall be bound to unload the item upon its arrival, unless otherwise agreed.
2- The consignee may have direct recourse against the carrier to claim delivery or, where appropriate, compensation.

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Article 185

1- If delivery is not required to be made at the consignee’s premises, the carrier must notify the consignee of the arrival of the item and of the time at which the consignee may take delivery of it.

2- The consignee must take delivery of the item within the time specified by the carrier and shall bear the storage costs. After the expiry of the time specified for taking delivery, the carrier may transport the item to the consignee’s premises for an additional charge.

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Article 186

1- If carriage is interrupted during its performance, or the consignee does not appear to take delivery of the item within the time specified by the carrier, or appears but refuses to take delivery of it or to pay the freight and expenses, the carrier must notify the consignor thereof and request the consignor’s instructions.
2- If the consignor delays in communicating instructions to the carrier in good time, the carrier may request the Judge of Urgent Matters to appoint an expert to establish the condition of the item and to authorise the carrier to deposit it with a custodian for the account and at the risk of the consignor.
3- If the item is liable to perish, deteriorate or lose value, or if its preservation requires excessive expense, the judge shall order its sale in the manner the judge determines and the deposit of the price with the court treasury for the account of the persons concerned. Where necessary, the judge may order the sale of all or part of the item sufficient to satisfy the sums due to the carrier.

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Article 187

1- The carrier may retain the item to secure payment of the freight, expenses and other sums due to it by reason of the carriage.

2- The carrier shall have a privilege over the price resulting from the sale of the item to secure payment of the sums due to it by reason of the carriage. In this regard, the procedures for enforcement against items subject to a commercial pledge shall be followed.

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Article 188

The carrier shall be bound to carry the passenger and the luggage the passenger is permitted to keep to the destination within the time agreed, stated in the carriage regulations, or required by custom.

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Article 189

1- The carrier shall guarantee the safety of passengers during the performance of the contract of carriage and shall be liable for any bodily or material harm suffered by the passenger and for delay. The carrier may only disclaim liability by proving force majeure or the fault of the passenger.

2- The heirs shall have the right to claim compensation from the carrier for the harm suffered by the deceased, whether death occurred immediately after the accident or after a lapse of time.

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Article 190

The carrier shall be liable for the acts of the persons it employs in performing its obligations under the contract of carriage.

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Article 191

1- Any clause exempting the carrier, wholly or partly, from liability for bodily harm suffered by the passenger shall be null and void.

2- Any clause that would oblige the passenger in any way to pay all or part of the cost of insurance against the carrier’s liability shall be treated as an exemption from liability.

3- Except in cases of intentional fault or gross negligence on the part of the carrier or its agents, the carrier may stipulate total or partial exemption from liability for non-bodily harm or harm due to delay suffered by the passenger.

4- A clause exempting from liability must be in writing, and the carrier must have informed the passenger of it.

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Article 192

1- The carrier shall not be liable for the loss of or damage to luggage kept by the passenger unless the passenger proves fault on the part of the carrier or its agents.

2- The carriage of registered luggage shall be subject to the provisions on the carriage of goods.

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Article 193

1- If the passenger dies during the performance of the contract of carriage, the carrier shall be bound to take the necessary measures to safeguard the passenger’s luggage until it is delivered to the persons concerned.

2- If one of the persons concerned is present at the place of death, that person may intervene to supervise such measures and may request the carrier to provide an acknowledgement that the deceased’s luggage is in its possession.

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Article 194

The passenger shall be bound to pay the fare at the time agreed, stated in the carriage regulations, or required by custom. The passenger shall be liable for the full fare even if the passenger decides not to travel. However, if travel becomes impossible by reason of the passenger’s death, illness or other compelling impediment, the contract of carriage shall be rescinded and the fare shall not be payable.

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Article 195

1- The carrier may retain the passenger’s luggage as security for the fare and for food or other items provided to the passenger during the performance of the contract of carriage.

2- The carrier shall have a privilege over the price of the luggage to secure payment of the sums due to it by reason of the carriage. In this regard, the procedures for enforcement against items subject to a commercial pledge shall be followed.

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Article 196

The passenger must follow the carrier’s instructions relating to the carriage.

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Article 197

1- Commission agency for carriage (freight forwarding) is a contract under which the agent undertakes to contract, in the agent’s own name or in the name of the principal, with a carrier for the carriage of an item or a person to a specified destination and, where necessary, to carry out the operations connected with such carriage, in return for a commission received from the principal.

2- If the commission agent carries out the carriage by its own means, the provisions of the contract of carriage shall apply to it unless otherwise agreed.

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Article 198

1- The commission agent for carriage shall be bound to safeguard the interests of the principal and to carry out the principal’s instructions, in particular those relating to the choice of carrier.
2- The agent may not charge to the principal’s account freight higher than that agreed with the carrier.

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Article 199

1- The commission agent for carriage shall guarantee the safety of the item or the passenger.
2- In the carriage of goods, the agent shall be liable, from the time of taking charge of the item, for its total or partial loss, damage to it, or delay in its delivery. The agent may only disclaim liability by proving force majeure, an inherent defect in the item, or the fault of the principal or of the consignee.
3- In the carriage of persons, the agent shall be liable for delay in arrival and for bodily or material harm suffered by the passenger during the performance of the contract of carriage. The agent may only disclaim liability by proving force majeure or the fault of the passenger.
4- In all cases, the agent shall have recourse against the carrier where there are grounds for such recourse.

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Article 200

1- Any clause exempting the commission agent for carriage, wholly or partly, from liability for bodily harm suffered by the passenger shall be null and void.
2- Any clause that would oblige the passenger in any way to pay all or part of the cost of insurance against the commission agent’s liability shall be treated as an exemption from liability.
3- Except in cases of intentional fault or gross negligence on the part of the commission agent for carriage or any of its agents, or of the carrier or any of its agents, the commission agent may stipulate total or partial exemption from liability arising from the loss of or damage to the item or delay in its delivery, and from liability arising from delay in the passenger’s arrival or from non-bodily harm suffered by the passenger.
4- A clause exempting from liability must be in writing, and the agent must have informed the principal or the passenger of it.

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Article 201

1- The principal or the passenger shall have a direct right of recourse against the carrier to claim compensation for damage arising from the non-performance of the contract of carriage, its defective performance or delay. In such case, the commission agent for carriage must be joined in the action.

2- The carrier shall have a direct right of recourse against the principal or the passenger to claim compensation for damage suffered by the carrier in performing the carriage.

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Article 202

The principal commission agent shall be guarantor for the intermediate commission agent it engages, unless the consignor designated the intermediate agent in its agreement with the principal agent.

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Article 203

If the commission agent pays the freight to the carrier, it shall be subrogated to the carrier’s rights.

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Article 204

Save as provided above, the provisions relating to the contract of commission agency shall apply to the commission agent for carriage.

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Article 205

1- Air carriage means the carriage of persons, luggage or goods by aircraft for remuneration.

2- The term “luggage” means the items that the passenger is permitted to take on the aircraft and that are delivered to the carrier to be in its custody during carriage. This term does not include small personal items that remain in the passenger’s custody during the journey.

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Article 206

The provisions of this Chapter shall apply to air carriage, subject to the special provisions set out in the following Articles.

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Article 207

The air consignment note must include a statement that the carriage is subject to the rules on limited liability provided for in Article 214; otherwise, the carrier may not rely on such rules.

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Article 208

The air carrier shall be liable for damage sustained in the event of the death of, wounding of, or any other bodily injury to a passenger, if the accident that caused the damage took place on board the aircraft or in the course of any of the operations of embarking or disembarking.

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Article 209

1- The air carrier shall be liable for damage sustained in the event of the destruction or loss of, or damage to, luggage or goods, if the occurrence that caused the damage took place during the air carriage.
2- Air carriage comprises the period during which the luggage and goods are in the custody of the carrier, whether at an airport or in any other place where the aircraft has landed.
3- Air carriage does not include the period during which the luggage or goods are the subject of carriage by land, sea or river performed outside an airport. However, if such carriage takes place in the performance of the air carriage for the purpose of loading, delivery or transhipment, any damage shall be presumed, until the contrary is proven, to have resulted from an occurrence that took place during the period of air carriage.

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Article 210

The air carrier shall be liable for damage resulting from delay in the arrival of the passenger, luggage or goods.

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Article 211

The air carrier shall be exempt from liability if it proves that it and its agents took all necessary measures to avoid the damage, or that it was impossible for them to take such measures.

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Article 212

The air carrier shall be exempt from liability if it proves that the damage was caused entirely by the fault of the injured person. The court may reduce the carrier’s liability if the carrier proves that the fault of the injured person contributed to causing the damage.

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Article 213

The air carrier shall not be liable for small personal items that remain in the passenger’s custody during the journey unless the passenger proves fault on the part of the carrier or its agents.

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Article 214

1- In the carriage of persons, the compensation awarded against the air carrier may not exceed six thousand dinars for each passenger, unless it is expressly agreed to exceed that amount.
2- In the carriage of luggage or goods, compensation shall not exceed six dinars per kilogram. However, if the consignor, upon delivering the luggage or goods to the carrier, made a special declaration of the interest attached to their delivery at the place of destination and paid such additional charge as the carrier may have required for that purpose, the carrier shall be bound to pay compensation up to the value stated in the declaration, unless the carrier proves that such value exceeds the actual interest attached by the consignor to delivery.
3- In the event of loss, destruction or damage of part of a package or some of its contents, the maximum compensation shall be calculated on the basis of the total weight of the entire package, unless this affects the value of other packages covered by the same consignment, in which case the weight of those packages shall also be taken into account.
4- In respect of small personal items that remain in the passenger’s custody during the journey, the compensation awarded to each passenger for such items may not exceed one hundred and twenty dinars.

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Article 215

The air carrier may not rely on the limitation of liability provided for in the preceding Article if it is proven that the damage resulted from an act or omission of the carrier or its agents done either with intent to cause damage or recklessly and with knowledge that damage would probably result. Where the act or omission is that of the agents, it must also be proven that they were acting within the scope of their employment at the time.

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Article 216

1- If an action for compensation is brought against one of the carrier’s agents, that agent may rely on the limitation of liability provided for in Article 214 if it is proven that the act causing the damage was committed by the agent in the course of their employment.
2- The aggregate of the compensation recoverable from the carrier and its agents together shall not exceed those limits.
3- Nevertheless, an agent of the carrier may not rely on the limitation of liability if it is proven that the damage resulted from an act or omission of the agent done either with intent to cause damage or recklessly and with knowledge that damage would probably result.

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Article 217

1- Any clause exempting the air carrier from liability or limiting it to less than the limits provided for in Article 214 shall be null and void.

2- However, such nullity shall not extend to a clause exempting the carrier from liability, or limiting it, in the event of loss of or damage to the item carried by reason of its nature or an inherent defect in it.

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Article 218

Receipt by the consignee of luggage or goods without reservation shall constitute a presumption that they were received in good condition and in accordance with the consignment note, unless there is evidence to the contrary.

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Article 219

1- In the event of damage to luggage or goods, the consignee must address a complaint to the carrier immediately upon discovery of the damage and, at the latest, within seven days in the case of luggage and fourteen days in the case of goods from the date of receipt. In the case of delay, the complaint must be made at the latest within twenty-one days from the day on which the luggage or goods were placed at the consignee’s disposal.

2- The complaint must be made in the form of a reservation entered on the consignment note upon delivery of the luggage or goods, or in the form of a registered letter sent to the carrier within the legal time limit.

3- An action for liability against the carrier shall not be admissible if the complaint is not made within the time limits provided for in this Article, unless the claimant proves fraud on the part of the carrier or its agents intended to cause those time limits to be missed or to conceal the true extent of the damage to the luggage or goods.

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Article 220

The right to bring an action for liability against the air carrier shall lapse on the expiry of two years from the date of arrival of the aircraft at the destination, or from the date on which it ought to have arrived, or from the date on which the carriage stopped.

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Article 221

1- In the case of gratuitous carriage, the air carrier shall not be liable unless fault on its part or on the part of one of its agents is proven. In such case, the carrier shall be liable within the limits provided for in Article 214.
2- Carriage shall be deemed gratuitous if it is without consideration and the carrier is not a professional carrier. If the carrier is a professional carrier, the carriage shall be deemed non-gratuitous.

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Article 222

The air carrier shall be liable within the limits provided for in Article 214, whatever the capacity of the parties to the action for liability, their number or the amount of compensation due.

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Article 223

A pledge shall be commercial in respect of all parties concerned if it is created over movable property as security for a debt that is deemed commercial in respect of the debtor.

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Article 224

1- A pledge shall not be enforceable against third parties unless possession of the pledged item has been transferred to the pledgee creditor or to another person designated by the contracting parties, and has remained in the possession of whichever of them received it until the pledge is extinguished.
2- The pledgee creditor or the person designated by the contracting parties shall be deemed to possess the pledged item:
a- If it has been placed at their disposal in a manner that leads third parties to believe that the item has come into their custody.
b- If they have received an instrument representing the pledged item that gives its holder alone the right to take delivery of that item.

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Article 225

1- Rights may be pledged. Rights evidenced in registered instruments shall be pledged by a written transfer stating that it is made by way of security, which shall be entered in the books of the entity that issued the instrument and annotated on the instrument itself.

2- Rights evidenced in instruments to order shall be pledged by an endorsement stating that value is given in security.

3- Other rights not evidenced in registered instruments or instruments to order shall be pledged by following the procedures and formalities applicable to the assignment of rights.

4- Possession of rights shall be transferred by delivery of the instruments evidencing them. If the instrument is deposited with a third party, delivery of the deposit receipt shall be deemed delivery of the instrument itself, provided that the instrument is sufficiently identified in the receipt and that the depositary agrees to hold it for the account of the pledgee creditor.

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Article 226

A pledge may be proven, as between the contracting parties and as against third parties, by all means of proof.

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Article 227

1- If a pledge is created over fungible property, it shall subsist even if the pledged item is replaced by another item of the same kind.
2- If the pledged item is non-fungible property, the pledgor debtor may recover it and substitute another item for it, provided that this is stipulated in the pledge contract and the creditor accepts the substitute, without prejudice to the rights of third parties acting in good faith.

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Article 228

The pledgee creditor shall, at the debtor’s request, deliver to the debtor a receipt stating the nature, type, quantity and weight of the pledged item and its other distinguishing characteristics.

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Article 229

1- The pledgee creditor shall be bound to take the necessary measures to preserve the pledged item. If the item is a commercial paper, the creditor must, upon its maturity, take the necessary steps to collect its value.

2- The pledgor shall be liable for all expenses incurred by the pledgee creditor for that purpose.

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Article 230

The pledgee creditor shall be bound to exercise, for the account of the pledgor, all rights relating to the pledged item and to collect its value, profits, interest and other sums arising from it when they fall due, provided that the sums so collected are applied first to the expenses incurred in preserving and repairing the item, then to costs and interest, and then to the principal of the debt secured by the pledge, unless the agreement or the law provides otherwise.

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Article 231

If the debtor fails to pay the debt secured by the pledge on its due date, the pledgee creditor may, after the expiry of three days from the date of giving the debtor notice to pay, request, by petition submitted to the President of the Court of First Instance, an order for the sale of all or part of the pledged item.

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Article 232

1- The order issued by the President of the Court for the sale of the pledged item may not be executed until five days have elapsed from the date of its notification to the debtor and to the third-party pledgor, if any, specifying the place, date and hour of the sale.
2- If the pledge is created over several items of property, the pledgee creditor shall have the right to designate the property to be sold, unless otherwise agreed. In all cases, the sale may only extend to what is sufficient to satisfy the creditor’s right.

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Article 233

1- The sale shall take place at the time and place determined by the President of the Court of First Instance, by public auction, unless the President orders another method. If the pledged item is an instrument traded on the stock exchange, the President shall order its sale on that exchange through a broker.

2- The pledgee creditor shall, by way of privilege, recover its debt, including principal, interest and costs, from the proceeds of the sale.

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Article 234

If the pledged item is liable to perish or deteriorate, or if its possession requires excessive expense, and the pledgor does not wish to provide another item in its place, either the creditor or the pledgor may request the President of the Court of First Instance to authorise its immediate sale by any method the President determines, and the pledge shall attach to the proceeds of the sale.

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Article 235

If the market price of the pledged item falls so that it is no longer sufficient to secure the debt, the creditor may fix an appropriate time limit for the pledgor to top up the security. If the pledgor refuses to do so, or the time limit expires without the pledgor topping up the security, the creditor may enforce against the pledged item by following the procedures provided for in Articles 231 to 233.

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Article 236

If the pledged item is an instrument whose value has not been paid in full, the pledgor must, when called upon to pay the unpaid portion, provide the pledgee creditor with the funds required for that portion at least one day before its due date; otherwise, the pledgee creditor may sell the instrument by following the procedures provided for in Articles 131 to 233.

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Article 237

1- Any agreement concluded at the time the pledge is created, or thereafter, which gives the pledgee creditor, in the event of non-payment of the debt at maturity, the right to take ownership of the pledged item or to sell it without observing the provisions of Articles 231 to 233, shall be null and void.

2- Nevertheless, after the debt or an instalment thereof has fallen due, it may be agreed that the debtor shall transfer the pledged item or part of it to the creditor in satisfaction of the debt. The judge may also order that ownership of the pledged item or part of it be vested in the pledgee creditor in satisfaction of the debt, provided that it is credited at its value as assessed by experts.

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Article 238

Deposit in public warehouses is a contract under which the warehouse keeper undertakes to receive and keep goods for the account of the depositor or of the person to whom ownership or possession thereof passes under the instruments representing them.

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Article 239

A public warehouse entitled to issue negotiable instruments representing the goods deposited may not be established or operated except under a licence from the competent Minister and in accordance with the conditions and procedures prescribed by the Minister’s decision.

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Article 240

1- The competent Minister shall issue regulations governing public warehouses.

2- Each public warehouse shall lay down its own regulations governing its activity in a manner consistent with the type of its business, the nature of the goods it stores and the place in which it operates. Such regulations must in particular include the method of determining storage charges.

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Article 241

1- The warehouse keeper may not, in any capacity, whether for its own account or for the account of others, carry on commercial activity relating to goods of the same kind as those it is licensed to keep in its warehouse and for which it is licensed to issue representative instruments.

2- This provision shall apply where the operator of the warehouse is a company in which a partner holding at least 10% of its capital carries on a commercial activity covered by the foregoing prohibition.

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Article 242

Public warehouses may grant loans secured by a pledge over the goods kept with them and may deal in the pledge instruments (warrants) representing them.

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Article 243

1- The depositor shall be bound to provide the public warehouse with accurate information on the nature, type and value of the goods.

2- The depositor shall have the right to inspect the goods delivered to the public warehouse for the depositor’s account and to take samples of them.

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Article 244

1- The warehouse keeper shall be liable for keeping and maintaining the goods deposited, up to a limit not exceeding their declared value.
2- The warehouse keeper shall not be liable for damage to or shortage of the goods arising from force majeure, the nature of the goods or the manner of their preparation.
3- The warehouse keeper may request the President of the Court of First Instance for permission to sell the goods if they are threatened with rapid deterioration. The President shall determine the method of sale.

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Article 245

1- The depositor shall receive a warehouse receipt stating the depositor’s name, occupation and domicile, the type, nature and quantity of the goods and other particulars necessary to identify them and their value, the name of the warehouse with which they are deposited, the name of the company insuring the goods, if any, and a statement as to whether the duties and taxes payable on them have been paid.
2- Each warehouse receipt shall be accompanied by a pledge instrument (warrant) containing all the particulars stated in the warehouse receipt.
3- The public warehouse shall keep a true copy of the warehouse receipt and the warrant.

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Article 246

1- If the goods in respect of which a warehouse receipt and warrant have been issued are fungible items, they may be replaced by goods of the same nature, type and quality if this is stipulated in the warehouse receipt and warrant. In such case, all the rights and privileges of the holder of the receipt or warrant shall transfer to the new goods.

2- A warehouse receipt and warrant may be issued in respect of a quantity of fungible goods held in bulk within a larger quantity.

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Article 247

1- The warehouse receipt and warrant may be issued in the name of the depositor or to the depositor’s order.

2- If the warehouse receipt and warrant are to the depositor’s order, the depositor may transfer them, together or separately, by endorsement.

3- The endorsee of the warehouse receipt or warrant may request that the endorsement, together with a statement of the endorsee’s domicile, be entered on the copy kept by the warehouse.

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Article 248

1- The endorsement of the warrant separately from the warehouse receipt shall create a pledge over the goods in favour of the endorsee.

2- The endorsement of the warehouse receipt shall transfer to the endorsee the right to dispose of the goods. If the warrant is not endorsed together with the warehouse receipt, the endorsee of the receipt shall be bound to pay the debt secured by the warrant or to enable the pledgee creditor to recover its right from the price of the goods.

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Article 249

1- The endorsement of the warehouse receipt and the warrant must be dated.
2- If the warrant is endorsed separately from the warehouse receipt, the endorsement must include, in addition to its date, a statement of the amount of the secured debt, including principal and interest, its due date, the name and occupation of the creditor, and the signature of the endorser.
3- The endorsee must request that the endorsement of the warrant and the particulars relating to the endorsement be entered in the books of the warehouse and that the warrant be annotated accordingly.

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Article 250

The holder of the warehouse receipt separately from the warrant may pay the debt secured by the warrant even before maturity. If the holder of the warrant is unknown, or is known but disagrees with the debtor on the terms of payment before maturity, the debt, including principal and interest up to the due date, must be deposited with the management of the warehouse, which shall be responsible for it. Such deposit shall result in the release of the goods.

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Article 251

If the secured debt is not paid at maturity, the holder of the warrant separately from the warehouse receipt may request the sale of the pledged goods by following the procedures provided for in Articles 231 to 233 relating to commercial pledges.

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Article 252

1- The pledgee creditor shall recover its right from the price of the goods with priority over all creditors, after deduction of the following sums:

a- Taxes and duties payable on the goods.

b- The costs of sale and storage of the goods and other costs of preservation.

2- If the holder of the warehouse receipt is not present at the time of the sale of the goods, the amount exceeding what is due to the holder of the warrant shall be deposited with the court treasury.

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Article 253

1- The holder of the warrant may not have recourse against the debtor or the endorsers until after enforcement against the pledged goods and establishment that they are insufficient to satisfy the debt.

2- Recourse against the endorsers must be exercised within ten days of the date of sale of the goods; otherwise, the holder’s right of recourse shall lapse.

3- In all cases, the right of the holder of the warrant to have recourse against the endorsers shall lapse if the holder does not commence enforcement proceedings against the pledged goods within thirty days of the due date of the debt.

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Article 254

If an accident befalls the goods, the holder of the warehouse receipt or warrant shall have, over the insurance proceeds payable upon the occurrence of that accident, the same rights and privilege as they had over the goods.

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Article 255

1- A person who has lost a warehouse receipt may request, by petition to the President of the Court of First Instance, an order for the delivery to them of a copy of the lost instrument, provided that they prove their ownership of it and provide a guarantor.
2- On the same conditions, a person who has lost a warrant may obtain an order from the President of the Court of First Instance for payment of the secured debt if that debt has fallen due. If the debtor does not comply with the order, the person in whose favour it was issued may request the sale of the pledged goods in accordance with the procedures provided for in Articles 231 to 233 relating to commercial pledges, provided that the endorsement made in their favour is entered in the books of the warehouse and that they provide a guarantor. The demand for payment must include all the particulars of the endorsement entered in the books of the public warehouse.

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Article 256

1- If the depositor does not recover the goods upon expiry of the contract of deposit, the warehouse keeper may, after giving notice, request their sale in accordance with the procedures provided for in Articles 231 to 233 relating to commercial pledges. The warehouse keeper shall recover the sums due to it from the proceeds of the sale and shall deliver the balance to the depositor or deposit it with the court treasury.
2- The provision of the preceding paragraph shall apply if the contract of deposit is for an indefinite period and one year elapses without the depositor requesting the return of the goods or expressing a wish to continue the contract of deposit.

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Article 257

1- A guarantor provided in the event of loss of a warehouse receipt shall be discharged on the expiry of five years without any claim for the return of the goods having been made against the warehouse.

2- A guarantor provided in the event of loss of a warrant shall be discharged on the expiry of three years from the date of entry of the endorsement in the books of the public warehouse.

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Article 258

1- Any person who establishes or operates a public warehouse in breach of the provisions of Article 239 shall be punished by imprisonment for a term not exceeding one year and a fine not exceeding two hundred dinars, or by either of these penalties.
2- The court may order the publication of the conviction judgment, or a summary thereof, in the Official Gazette and its posting on the doors of the warehouse or in any other place, at the expense of the convicted person. In the event of conviction, the court may also order the liquidation of the warehouse, appointing a liquidator and specifying the liquidator’s powers.

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Article 259

The warehouse keeper and every manager, employee or worker therein who discloses professional secrets relating to the goods deposited shall be punished by the penalty provided for in the preceding Article.

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Article 260

A commercial agency, even if it contains a general authorisation, shall not permit non-commercial acts except by express agreement.

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Article 261

1- A commercial agency shall be remunerated unless otherwise agreed.

2- If the remuneration is not specified in the agreement, it shall be determined according to the professional tariff, custom or the circumstances.

3- The agent shall be entitled to remuneration only if the agent concludes the transaction entrusted to them, or proves that its conclusion was prevented by a cause attributable to the principal. In other cases, the agent shall be entitled only to compensation for the efforts expended, in accordance with custom.

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Article 262

1- The agent may not depart from the principal’s instructions; otherwise, the agent shall be liable for the resulting damage.

2- However, if the agent ascertains that performing the agency according to the principal’s instructions would cause the principal serious harm, the agent may defer performance of the agency until the agent has consulted the principal.

3- The agent may defer performance of the agency until receiving express instructions from the principal where the agent has no such instructions. Nevertheless, if necessity requires urgent action, or if the agent is authorised to act within the limits of what is useful and appropriate, the agent may perform the agency as the agent sees fit, provided that due care is exercised.

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Article 263

1- The agent shall be liable for damage to the items held for the account of the principal, unless such damage arises from force majeure, extraordinary circumstances, defects existing in the items, or is damage inherent in the nature of the items.

2- The agent shall not be bound to insure the items received on behalf of the principal unless the principal requests such insurance or it is required by custom.

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Article 264

1- If the agent becomes aware of damage sustained in transit by items held for the account of the principal, the agent must take urgent measures to preserve them.

2- If the items are exposed to damage, are perishable or are at risk of a fall in value, and the agent is unable to obtain the principal’s instructions regarding them, the agent must seek the permission of the President of the Court of First Instance to sell them in the manner the President determines.

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Article 265

1- The agent must provide the principal with the necessary information on the progress made in performing the agency and render an account thereof.

2- This account must correspond to the truth. If it intentionally contains false statements, the principal may reject the transactions to which such statements relate, in addition to the principal’s right to claim compensation, and the agent shall not be entitled to remuneration for such transactions.

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Article 266

1- The agent shall have a privilege over goods and other items sent, deposited or delivered to the agent by the principal, from the moment of dispatch, deposit or delivery.
2- This privilege shall secure the agent’s remuneration and all sums due to the agent by reason of the agency, together with interest thereon, whether such sums were paid before delivery of the goods or items or while they were in the agent’s possession.
3- The privilege shall arise irrespective of whether the debt arose from acts relating to the goods or items still in the agent’s possession or to other goods or items previously sent, deposited or delivered to the agent for safekeeping.
4- If the goods or items subject to the privilege are sold and delivered to the buyer, the agent’s privilege shall transfer to the price.

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Article 267

1- The agent shall have no privilege over goods or items sent, deposited or delivered to the agent for safekeeping unless they remain in the agent’s possession.
2- Goods or items shall be deemed to be in the agent’s possession in the following cases:
a- If they have been placed at the agent’s disposal at customs, in a public warehouse or in the agent’s own warehouses, or if the agent is transporting them by the agent’s own means.
b- If the agent holds them before their arrival under a bill of lading or any other transport document.
c- If the agent has dispatched them and nevertheless remains in possession of them under a bill of lading or any other transport document.

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Article 268

1- The agent’s privilege shall rank ahead of all other privileges except judicial costs and sums due to the Government.

2- Enforcement against goods and items in the agent’s possession to recover the agent’s right shall follow the procedures for enforcement against items subject to a commercial pledge.

3- Nevertheless, if the agent is instructed to sell the goods or items in the agent’s possession, the agent may enforce against them to recover the agent’s right by selling them without following the said procedures, unless the agent is unable to carry out the principal’s instructions regarding the sale.

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Article 269

If the principal has no known domicile in Kuwait, the domicile of the principal’s agent shall be deemed the principal’s domicile. The principal may be sued and served with official papers there in respect of acts carried out by the agent for the principal’s account.

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Article 270

The special laws on the matter shall apply to the regulation of engaging in commercial agency business.

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Article 271

A contract agency is a contract under which a person undertakes, on a continuous basis and within a specified area of activity, to promote and negotiate the conclusion of transactions in the interest of the principal in return for remuneration. The agent’s mission may include concluding and performing such transactions in the name and for the account of the principal.

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Article 272

The contract agent shall carry out the agency business and manage its commercial activity independently, and shall alone bear the expenses required to manage its activity.

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Article 273

1- The principal may engage more than one contract agent in the same area and for the same branch of activity.

2- A contract agent may not act as agent for more than one establishment competing in the same activity and in the same area, except in accordance with the procedures and conditions laid down by the Minister of Commerce in agreement with the other competent authority.

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Article 274

A contract agency contract must be evidenced in writing and must specify in particular the limits of the agency, the agent’s remuneration, the agent’s area of activity, the term of the contract if it is for a fixed term, and the trademark of the product that is the subject of the agency, if any.

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Article 275

If the contract stipulates that the contract agent shall erect showrooms, warehouses for goods, or maintenance or repair facilities, the term of the contract may not be less than five years.

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Article 276

1- The contract agent may not collect amounts due to the principal unless the principal has granted the agent this right. In such case, the agent may not grant a discount or extension of time without special authorisation.
2- The contract agent may receive requests relating to the performance of contracts concluded through the agent, as well as complaints concerning the non-performance of such contracts. The agent shall be deemed to represent the principal in actions relating to such contracts brought by or against the principal within the agent’s area of activity.

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Article 277

1- The principal shall be bound to pay the agent the agreed remuneration.

2- Such remuneration may be a percentage of the value of the transaction, calculated on the basis of the selling price to customers, unless otherwise agreed.

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Article 278

1- The contract agent shall be entitled to remuneration for transactions concluded, or whose non-conclusion is attributable to the act of the principal.
2- The agent shall also be entitled to remuneration for transactions concluded by the principal directly or through others within the area allocated to the agent’s activity, even if such transactions were not concluded as a result of the agent’s efforts, unless the parties expressly agree otherwise.

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Article 279

The principal shall provide the agent with all the information necessary to perform the agency and shall, in particular, furnish the agent with the specifications of the goods, samples, drawings and other information that will assist the agent in promoting and marketing the goods that are the subject of the agency.

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Article 280

1- The contract agent shall be bound to safeguard the rights of the principal and may take all precautionary measures necessary to safeguard such rights. The agent shall provide the principal with information on market conditions in the agent’s area of activity.
2- The agent may not disclose the principal’s secrets that come to the agent’s knowledge in the course of performing the agency, even after the contractual relationship has ended.

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Article 281

1- A contract agency is concluded in the common interest of both parties. The principal may therefore not terminate the contract in the absence of fault on the part of the agent; otherwise, the principal shall be bound to compensate the agent for the damage suffered as a result of the dismissal. Any agreement to the contrary shall be null and void.

2- The agent shall likewise be bound to compensate the principal for the damage suffered if the agent renounces the agency at an inappropriate time and without acceptable excuse.

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Article 282

1- If the contract is for a fixed term and the principal decides not to renew it upon its expiry, the principal must pay the agent fair compensation assessed by the judge, notwithstanding any agreement to the contrary.
2- Entitlement to such compensation shall be subject to the following conditions:
a- That no fault or default has been committed by the agent during the performance of the contract.
b- That the agent’s activity has resulted in evident success in promoting the product or increasing the number of customers.
3- In assessing compensation, account shall be taken of the extent of the damage suffered by the agent and the benefit derived by the principal from the agent’s efforts in promoting the product or increasing the customer base.

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Article 283

1- The action for compensation referred to in the preceding Article shall lapse on the expiry of ninety days from the time the contract ends.

2- All other actions arising from a contract agency contract shall lapse on the expiry of three years from the end of the contractual relationship.

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Article 284

If the principal replaces the contract agent with a new agent, the new agent shall be jointly and severally liable with the principal for payment of the compensation awarded to the former agent pursuant to Articles 281 and 282, where it is proven that the dismissal of the former agent resulted from collusion between the principal and the new agent.

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Article 285

By way of exception from the rules of jurisdiction set out in the Code of Civil and Commercial Procedure, the court within whose jurisdiction the contract is performed shall have jurisdiction to hear all disputes arising from a contract agency contract.

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Article 286

A distribution contract, under which a trader undertakes to promote and distribute the products of an industrial or commercial establishment in a specified area, provided that the trader is the sole distributor thereof, shall be treated as a contract agency and shall be subject to the provisions of Articles 275, 281, 282, 283, 284 and 285.

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Article 287

1- Commission agency is a contract under which the agent undertakes to perform, in the agent’s own name, a legal act for the account of the principal in return for remuneration.

2- The remuneration of a commission agent shall not be subject to assessment by the judge.

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Article 288

1- If the commission agent sells at a price lower than that fixed by the principal, or buys at a higher price, the principal, if wishing to reject the transaction, must, upon receiving notice of completion of the transaction, promptly notify the commission agent of the rejection; otherwise, the principal shall be deemed to have accepted the price.

2- The principal may not reject the transaction if the agent agrees to bear the difference in price.

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Article 289

If the commission agent contracts on terms more favourable than those fixed by the principal, the agent must account to the principal accordingly.

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Article 290

1- If a commission agent for sale grants the buyer time to pay the price, or allows payment by instalments, without the principal’s permission, the principal may require the agent to pay the entire price immediately. In such case, the agent may retain the difference if the agent completed the transaction at a higher price.

2- Nevertheless, the commission agent may grant time or allow payment of the price by instalments without the principal’s permission if custom at the place of sale so requires, unless the principal’s instructions require the agent to sell for cash.

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Article 291

If the principal’s instructions require a sale on credit and the commission agent sells for cash, the principal may not require the agent to pay the price until the due date, in which case the agent shall be bound to pay the price on the basis of a credit sale.

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Article 292

1- The commission agent may not disclose the name of the principal unless authorised to do so.

2- The commission agent shall not be bound to disclose to the principal the name of the third party with whom the agent contracted, unless the transaction is on credit. In such case, if the agent refuses to disclose the name of the third party, the principal may treat the transaction as a cash transaction.

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Article 293

The commission agent may not make itself the counterparty to the transaction unless authorised by the principal, in which case the commission agent shall not be entitled to remuneration.

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Article 294

1- The commission agent shall be directly bound to the third party with whom it contracts, and that third party shall likewise be directly bound to the commission agent.

2- The third party shall have no direct right of action against the principal, nor shall the principal have a direct right of action against the third party, unless the law provides otherwise.

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Article 295

1- If a commission agent for sale becomes bankrupt before collecting the price from the buyer, the principal may require the buyer to pay the price directly to the principal.

2- If a commission agent for purchase becomes bankrupt before delivery of the item purchased, the principal may require the seller to deliver the item directly to the principal.

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Article 296

1- The commission agent shall not be liable for the performance of the obligations of the party with whom the agent contracts, unless the agent has expressly assumed such liability or it is required by the custom of the place where the agent carries on its activity.

2- A del credere commission agent shall be entitled to special remuneration.

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Article 297

A commercial representative is a person entrusted by a trader with carrying out any of the business of the trader’s trade, whether itinerant, at the trader’s place of business or at any other place, and who is bound to the trader by a contract of employment.

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Article 298

1- The trader shall be liable for the transactions carried out and contracts concluded by the trader’s representative within the limits of the authority conferred by the trader.

2- If the representative is authorised by several traders, they shall be jointly and severally liable.

3- If the representative is authorised by a company, the company shall be liable for the representative’s acts, and the liability of the partners shall depend on the type of company.

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Article 299

1- If the limits of the authority conferred on the commercial representative are not specified, the authority shall be deemed general, covering all transactions relating to the type of trade in which the representative is authorised to transact.

2- The trader may not rely on a limitation of authority against third parties unless it is proven that the third party knew of such limitation.

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Article 300

The commercial representative shall carry out the authorised commercial acts in the name of the trader who authorised them and must, when signing, place next to the representative’s full name the full name of that trader together with a statement of the representative’s capacity as commercial representative; otherwise, the representative shall be personally liable for the act performed. Nevertheless, third parties may have direct recourse against the trader in respect of transactions carried out by the representative relating to the type of trade the representative is authorised to conduct.

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Article 301

The commercial representative may represent the trader in actions arising from the transactions the representative has carried out.

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Article 302

The commercial representative may not carry out any commercial transaction for the representative’s own account or for the account of a third party without obtaining the express consent of the trader who employs the representative.

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Article 303

An itinerant commercial representative may not collect the price of goods the representative has not sold, nor reduce or defer any part of their prices. The representative may, however, accept orders from third parties in the name of the person represented and take the measures necessary to safeguard the rights of the person represented.

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Article 304

A trader may authorise certain of its employees to sell by retail or wholesale in its store. Such employees may, where collection of the price is not entrusted to a cashier, collect inside the store the price of the items they have sold upon their delivery. Receipts given by them in the trader’s name for what they have sold shall be binding on the trader. They may not claim the price outside the store unless the trader has granted them this right in writing.

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Article 305

The commercial representative shall be jointly and severally liable with the trader for compliance with the legal provisions relating to unlawful competition.

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Article 306

Brokerage is a contract under which the broker undertakes, for a person, to seek a second party for the conclusion of a specified contract and to mediate its conclusion in return for remuneration.

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Article 307

If the broker’s remuneration is not specified by law or by agreement, it shall be determined according to custom. Where there is no custom, the judge shall assess it according to the effort expended and the time spent by the broker in carrying out the assigned task.

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Article 308

1- The broker shall be entitled to remuneration only if the broker’s mediation results in the conclusion of the contract.

2- Remuneration shall be due as soon as the contract is concluded, even if it is not performed in whole or in part.

3- If the contract is subject to a condition precedent, the broker shall be entitled to remuneration only if the condition is fulfilled.

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Article 309

The court may reduce the broker’s remuneration if it is disproportionate to the services rendered, unless the amount of the remuneration was fixed, or the agreed remuneration was paid, after the conclusion of the contract mediated by the broker.

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Article 310

1- If the broker is mandated by both parties to the contract, the broker shall be entitled to remuneration from each of them.

2- Each of the contracting parties shall be liable to the broker, without joint liability between them, for payment of the remuneration due from it, even if they agree that one of them shall bear all the brokerage costs.

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Article 311

The broker may not recover the expenses incurred in carrying out the assigned task unless so agreed, in which case the expenses shall be due even if the contract is not concluded.

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Article 312

The broker may not claim remuneration or recover expenses if the broker acted to the detriment of the contracting party in the interest of the other contracting party who did not engage the broker to mediate the contract, or if the broker obtained from that party, contrary to good faith, a promise of a benefit.

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Article 313

The broker, even if mandated by only one of the parties to the transaction, must present it to both of them faithfully and inform them of all the circumstances known to the broker concerning it. The broker shall be liable to both of them for any fraud or fault committed in carrying out the assigned task.

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Article 314

The broker may not make itself the counterparty to the contract it is mediating unless the contracting party authorises it, in which case the broker shall not be entitled to any remuneration.

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Article 315

The broker may not act as intermediary for persons notorious for their insolvency or whose lack of capacity is known to the broker.

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Article 316

A broker through whom a negotiable instrument has been sold shall be responsible for the authenticity of the seller’s signature.

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Article 317

1- A broker through whom goods have been sold by sample must keep such samples until the day of delivery, or until the buyer accepts the goods without reservation, or until all disputes concerning them have been settled.

2- The broker must state the characteristics distinguishing the samples from others, unless the contracting parties exempt the broker from doing so.

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Article 318

The broker must record in its books all transactions concluded through its efforts and their essential particulars, keep the documents relating to them, and provide true copies of all of the above to any contracting party who requests them. The provisions on commercial books shall apply to such books.

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Article 319

1- If the broker delegates the performance of the assigned task to another person without being authorised to do so, the broker shall be liable for the act of the delegate as if the act had been performed by the broker, and the broker and the delegate shall be jointly and severally liable.

2- If the broker is authorised to appoint a delegate without the person of the delegate being specified, the broker shall be liable only for fault in choosing the delegate or for fault in the instructions given to the delegate.

3- In all cases, the person who contracted with the broker and the broker’s delegate may each have direct recourse against the other.

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Article 320

If several brokers are mandated by a single contract, they shall be jointly and severally liable for the assigned task, unless they are authorised to act individually.

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Article 321

If several persons mandate a single broker for a joint task, they shall be jointly and severally liable to the broker for the performance of that mandate, unless otherwise agreed.

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Article 322

Brokerage on commodity and securities markets shall be governed by the special laws and regulations applicable thereto.

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Article 323

An exchange shall be deemed a legal person with the capacity to dispose of and manage its property and the right to sue and be sued.

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Article 324

1- No exchange for traders may be opened except under a licence from the competent Minister.

2- Any exchange opened without a licence shall be closed by administrative means.

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Article 325

a- A decree shall be issued regulating the business of the exchange, which shall include in particular the following:

1- The management of the exchange and the conduct of its business.

2- The formation of the exchange committee and the definition of its powers.

3- The conditions for listing brokers and their assistants on the exchange.

4- The admission of goods and securities to quotation and the establishment of official quotations.

5- The settlement of transactions and the clearing house.

6- The establishment of a guarantee fund and its powers.

7- Arbitration bodies.

8- Disciplinary penalties and disciplinary bodies.

9- The powers of the Government representative at the exchange.

b- The internal regulations of the exchange shall be issued by a decision of the competent Minister.

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Article 326

The exchange must have one or more Government representatives to monitor the implementation of the regulations.

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Article 327

Forward transactions concluded on the exchange in accordance with the regulations, whether relating to goods or to listed securities, shall be deemed lawful and valid even if the contracting parties intend them to result merely in the payment of differences. No action shall be admissible before the courts in respect of a transaction resulting merely in the payment of differences if it was concluded in breach of the foregoing provisions.

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Article 328

Exchange transactions shall not be validly concluded unless carried out through brokers whose names are included in a list drawn up by the exchange committee.

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Article 329

A deposit of money is a contract that vests in the bank ownership of the money deposited and the right to dispose of it in a manner consistent with its professional activity, subject to the bank’s obligation to return an equivalent amount to the depositor. Repayment shall be made in the same currency as that deposited.

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Article 330

1- The bank shall open an account for the depositor in which to record the transactions carried out between them or the transactions carried out between the bank and third parties for the account of the depositor.

2- Transactions that the parties agree not to record in the account shall not be recorded therein.

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Article 331

1- A contract for the deposit of money shall not give the depositor the right to withdraw from the bank sums exceeding the amount deposited.

2- If the bank carries out transactions resulting in the depositor’s balance becoming a debit balance, the bank must notify the depositor immediately so that the depositor may regularise their position.

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Article 332

1- A deposit of money shall be repaid on demand unless otherwise agreed. The depositor may at any time dispose of the balance or any part of it.

2- This right may be made subject to prior notice or to the arrival of a specified date.

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Article 333

The bank shall send the depositor a statement of account at least once a year, unless custom or agreement provides otherwise. The statement must include a copy of the account and the amount of the balance after the last movement.

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Article 334

If the bank issues a savings deposit book, it must be in the name of the person in whose favour it is issued, and payments in and withdrawals must be recorded in it. The entries in the book signed by a bank employee shall constitute conclusive evidence of such entries in the relationship between the bank and the person in whose favour the book is issued. Any agreement to the contrary shall be null and void.

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Article 335

Deposits and withdrawals shall be made at the premises of the bank at which the account was opened, unless otherwise agreed.

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Article 336

If a depositor has several accounts with a single bank or with branches of a single bank, each account shall be deemed independent of the others, unless otherwise agreed.

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Article 337

The bank may open a joint account for two or more persons in equal shares, unless there is an agreement to the contrary, subject to the following provisions:
1- The joint account shall be opened by all its holders or by a person holding a power of attorney issued by the account holders and authenticated by the competent authority. Withdrawals shall be made in accordance with the agreement of the account holders.
2- If an attachment is levied on the balance of one of the joint account holders, the attachment shall apply to the share of the person whose property is attached in the account balance from the date on which the bank is notified of the attachment. The bank must suspend withdrawals from the joint account up to the amount of the attached share and notify the co-holders or their representative of the attachment within a period not exceeding five days.
3- When setting off the various accounts of one of the joint account holders, the bank may not include the joint account in the set-off without the written consent of the other co-holders.
4- Upon the death or loss of legal capacity of one of the joint account holders, the others must notify the bank thereof and of their wish to continue the account within a period not exceeding ten days from the date of death or loss of capacity. The bank must suspend withdrawals from the joint account until the successor has been legally appointed.

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Article 338

The bank may not use the securities deposited with it, or exercise the rights arising from them, except in the interest of the depositor, unless otherwise agreed.

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Article 339

1- The bank must exercise, in safeguarding the securities deposited, the care of a paid depositary. Any agreement exempting the bank from exercising such care shall be null and void.

2- The bank may not relinquish possession of such securities except for a reason requiring it.

3- The depositor shall be bound to pay the agreed remuneration, or that determined by custom, in addition to necessary expenses.

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Article 340

1- The bank shall be bound to collect the interest, dividends and value of the security and any other sum falling due by reason of it, unless otherwise agreed. The sums collected by the bank shall be placed at the disposal of the depositor and credited to the depositor’s account.

2- The bank shall carry out every operation necessary to safeguard the rights attached to the security, such as receiving instruments allotted free of charge in respect of it, presenting it for exchange, or adding new coupons to it.

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Article 341

The bank must notify the depositor of every matter or right relating to the security that requires the depositor’s consent or depends on the depositor’s choice. If the depositor’s instructions do not arrive in good time, the bank must deal with the right in a manner beneficial to the depositor, and the depositor shall bear the expenses of the operations carried out by the bank, in addition to the commission.

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Article 342

1- The bank shall be bound to return the securities deposited as soon as the depositor requests it, having regard to the time required to prepare the securities for return.

2- Return shall be made at the place where the deposit was made. The bank shall be bound to return the very securities deposited, unless the parties have agreed, or the law permits, the return of equivalent securities.

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Article 343

Return shall be made to the depositor of the security, to the depositor’s agent holding a special power of attorney, or to the depositor’s successor, even if the security indicates that it is owned by a third party.

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Article 344

If an action is brought claiming entitlement to the securities deposited, the bank must notify the depositor immediately and refrain from returning the securities to the depositor until the court has decided the action.

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Article 345

The hire of safe-deposit boxes is a contract under which the bank undertakes, in return for remuneration, to place a specified box at the disposal of the hirer for use for a specified period.

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Article 346

The bank shall be responsible for the security, safekeeping and fitness for use of the safe-deposit box and may only disclaim liability by proving an extraneous cause.

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Article 347

1- The bank must deliver the key of the safe-deposit box to the hirer. The bank alone may keep a copy of it. The key shall remain the property of the bank and must be returned to it at the end of the hire.

2- The bank may not allow anyone other than the hirer or the hirer’s agent to open the box.

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Article 348

The hirer may not sublet the safe-deposit box or any part of it, or assign the hire to a third party, unless otherwise agreed.

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Article 349

1- If the safe-deposit box is hired to several hirers, each of them shall have the right to use it individually, unless otherwise agreed.

2- In the event of the death of the hirer or of one of the hirers, the bank may not, after learning of the death, allow the box to be opened except with the consent of all the persons concerned or by decision of the President of the Court of First Instance.

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Article 350

The hirer may not place in the safe-deposit box items that threaten its safety or the safety of the place in which it is located.

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Article 351

If the hirer fails to pay the hire charge for the safe-deposit box within fifteen days of being given notice to pay, the contract shall be deemed rescinded automatically without the need for a court judgment.

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Article 352

1- If the term of the contract expires or it is deemed rescinded pursuant to the preceding Article, the bank shall recover the safe-deposit box after notifying the hirer to attend to empty its contents. Notice shall be valid if given at the last domicile designated by the hirer to the bank.

2- If the hirer does not attend at the time specified in the notice, the bank may request the President of the Court of First Instance to authorise it to open the box in the presence of an enforcement officer designated for that purpose. The enforcement officer shall draw up a record of the event and of the contents of the box.

3- The bank must keep the contents of the box. After six months have elapsed from the drawing up of the inventory record, it may request the President of the Court of First Instance to order their sale in the manner the President determines and the deposit of the price with the court treasury, or to order any other appropriate measure.

4- The bank shall have a privilege over the sums deposited in the hired box, or over the proceeds of the sale of its contents, to secure payment of the hire charges and expenses due to it.

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Article 353

1- An attachment may be levied on a safe-deposit box.
2- The attachment shall be effected by requiring the bank to state whether it hires a box to the person whose property is being attached. If the bank so confirms, it must prevent that person from accessing the box. A copy of the attachment record, including a statement of the instrument under which the attachment was made, shall be left with the bank, and the hirer of the box shall be served with the attachment record.
3- If the attachment is precautionary, the hirer may request the President of the Court of First Instance to lift the attachment or to permit the hirer to take some of the contents of the box.
4- If the attachment is executory, the enforcement officer must, after giving notice to the hirer, open the box by force after the attaching creditor has deposited the costs of opening it and restoring it to its original condition. The contents of the box shall be sold in accordance with the procedures set out in the Code of Civil and Commercial Procedure.
5- If the hirer is absent and the box contains documents or papers, the bank must keep them in a sealed envelope bearing the seals of the enforcement officer and the bank.
6- The attaching creditor must pay the bank a sum sufficient to secure the hire charge for the box during the period of attachment.

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Article 354

1- A bank transfer is an operation under which the bank, on the written order of the transferor, debits a specified sum to the transferor’s account and credits it to another account in order to achieve the following:

a- The transfer of a specified sum from one person to another, each of whom has an account with the same bank or with two different banks.

b- The transfer of a specified sum from one account to another, both opened in the name of the transferor with the same bank or with two different banks.

2- The agreement between the bank and the transferor shall govern the conditions for issuing the order. However, a transfer order may not be made out to bearer.

3- If the beneficiary of the transfer order is authorised to transfer the amount to the credit of another person’s account, that person’s name must be stated in the transfer order.

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Article 355

If the bank transfer is made between two or more branches, or between two different banks, any dispute raised by a third party concerning the amount must be directed to the branch or bank holding the beneficiary’s account.

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Article 356

A transfer order may relate to sums actually credited to the transferor’s account or to sums to be credited to that account within a period that the transferor agrees in advance with the bank.

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Article 357

It may be agreed that the beneficiary shall personally present the transfer order to the bank instead of its being communicated by the transferor.

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Article 358

1- The beneficiary shall acquire ownership of the amount from the time it is credited to the beneficiary’s account, and the transferor may revoke the transfer order until such credit is made.

2- Nevertheless, if it is agreed that the beneficiary shall personally present the transfer order to the bank, the transferor may not revoke the transfer order, subject to the provisions of Article 363.

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Article 359

The debt in payment of which the transfer order was issued shall subsist, together with its securities and accessories, until the amount is actually credited to the beneficiary’s account.

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Article 360

1- If the transferor’s balance is insufficient and the transfer order is addressed directly to the bank by the transferor, the bank may refuse to execute the order, provided that it immediately notifies the transferor of such refusal.

2- If the transfer order is presented by the beneficiary, the bank shall credit the partial balance to the beneficiary’s account unless the beneficiary refuses. The bank must annotate the transfer order with the crediting of the partial balance or with the beneficiary’s refusal.

3- The transferor shall retain the right to dispose of the partial balance if the bank refuses to execute the transfer order or the beneficiary refuses the crediting of the partial balance pursuant to the two preceding paragraphs.

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Article 361

If several beneficiaries present themselves to the bank at the same time and the value of the transfer orders they hold exceeds the transferor’s balance, they shall have the right to request that such balance be distributed among them in proportion to their rights.

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Article 362

The distribution referred to in the preceding Article may only be made on the first business day following the day of presentation. The provisions of paragraphs two and three of Article 360 shall apply in this case.

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Article 363

1- If the beneficiary is declared bankrupt, the transferor may stop the execution of the transfer order even if the beneficiary has personally received it.

2- The bankruptcy of the transferor shall not prevent the execution of transfer orders presented to the bank before the issuance of the judgment declaring such bankruptcy, unless the court decides otherwise.

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Article 364

1- The opening of a credit is a contract under which the bank places means of payment at the disposal of the beneficiary up to a specified amount.

2- A credit may be opened for a fixed or indefinite period.

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Article 365

1- If a credit is opened for an indefinite period, the bank may cancel it at any time, provided that it notifies the beneficiary at least ten days before the date it specifies for cancellation.
2- Any agreement purporting to give the bank the right to cancel a credit opened for an indefinite period without prior notice, or with notice given within a shorter period than that provided for in the preceding paragraph, shall be null and void.

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Article 366

The bank may not cancel the credit before the expiry of the agreed period except in the event of the beneficiary’s death, interdiction or cessation of payments (even if no judgment declaring bankruptcy has been issued), or gross misconduct by the beneficiary in using the credit opened in the beneficiary’s favour.

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Article 367

1- A documentary credit is a contract under which the bank undertakes to open a credit, at the request of one of its customers (the applicant), in favour of another person (the beneficiary), secured by documents representing goods in transit or ready for shipment.

2- The documentary credit contract shall be deemed independent of the contract on account of which the credit was opened, and the bank shall remain a stranger to that contract.

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Article 368

The documents against which payment, acceptance or discount is to be effected must be precisely specified in the papers relating to the application for opening, confirming or advising the documentary credit.

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Article 369

The bank that opens the credit shall be bound to honour the terms of payment, acceptance and discount agreed in the contract for opening the credit, provided that the documents conform to the particulars and conditions set out in that contract.

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Article 370

1- A documentary credit may be irrevocable or revocable.

2- The contract for opening the credit must expressly state its type. If it does not do so, the credit shall be deemed revocable.

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Article 371

A revocable documentary credit shall not give rise to any obligation on the part of the bank towards the beneficiary. The bank may at any time amend or cancel it, of its own motion or at the request of the applicant, without the need to notify the beneficiary, provided that the amendment or cancellation is made in good faith and at an appropriate time.

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Article 372

1- In the case of an irrevocable documentary credit, the bank’s obligation shall be definite and direct towards the beneficiary and every holder in good faith of the instrument drawn in performance of the contract on account of which the credit was opened.
2- An irrevocable documentary credit may not be cancelled or amended except by agreement of all the parties concerned.
3- An irrevocable credit may be confirmed by another bank, which shall in turn be definitely and directly bound to the beneficiary.
4- Mere advice of the opening of an irrevocable documentary credit sent to the beneficiary through another bank shall not be deemed confirmation of that credit by the advising bank.

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Article 373

1- Every irrevocable documentary credit must include an expiry date for the validity of the credit and for the presentation of documents for payment, acceptance or discount.

2- If the date fixed for the expiry of the credit falls on a bank holiday, the period of validity shall be extended to the first business day following the holiday.

3- Except for holidays, the validity of the credit shall not be extended even if its expiry date coincides with an interruption of the bank’s business due to force majeure, unless there is express authorisation to that effect from the applicant.

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Article 374

1- The bank must verify that the documents conform to the instructions of the applicant for the credit.

2- If the bank rejects the documents, it must immediately notify the applicant of the rejection, stating the reasons therefor.

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Article 375

1- The bank shall not be liable if the documents presented conform on their face to the instructions it received from the applicant.

2- Nor shall the bank bear any liability with respect to the description of the goods on account of which the credit was opened, or their quantity, weight, external condition, packing or value, or with respect to the performance by the shippers or insurers of their obligations.

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Article 376

A documentary credit may not be transferred or divided unless the issuing bank is authorised by the applicant to pay it, in whole or in part, to a person or persons other than the first beneficiary on the express instructions of that beneficiary. Transfer may only be made with the express consent of the bank, and may only be made once, unless otherwise agreed.

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Article 377

If the applicant for the credit does not pay the bank the value of shipping documents conforming to the terms of the credit within three months of the date of notification of the arrival of such documents, the bank may sell the goods by following the methods of enforcement against items subject to a commercial pledge.

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Article 378

Discounting is a contract under which the bank advances to the holder of a commercial paper or any other negotiable instrument that has not yet matured the value stated in the instrument, less interest and commission, in return for the transfer of ownership of the instrument to the bank, subject to the beneficiary’s obligation to repay the value to the bank if the original debtor does not pay it.

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Article 379

1- Interest shall be calculated on the basis of the time remaining until the maturity date of the instrument.

2- Commission shall be assessed on the basis of the value of the instrument.

3- A minimum commission may be specified.

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Article 380

The beneficiary of the discount must repay to the bank the nominal value of any instrument that is not paid.

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Article 381

1- The bank shall have, against the original debtor under the instrument, the beneficiary of the discount and the other obligors, all the rights arising from the instrument it has discounted.

2- In addition, the bank shall have an independent right against the beneficiary of the discount to recover the sums it placed at the beneficiary’s disposal, without deduction of the interest and commission received by the bank. The bank may exercise this right to the extent of the unpaid instruments, whatever the reason for non-payment.

3- If the proceeds of the discount have been credited to a current account, the bank may cancel the entry by way of a reverse entry in accordance with Article 403, notifying the beneficiary of the discount of such entry.

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Article 382

A letter of guarantee is an undertaking issued by a bank at the request of one of its customers (the applicant) to pay a specified or determinable sum to another person (the beneficiary), unconditionally, if so requested within the period specified in the letter. The letter of guarantee shall state the purpose for which it was issued.

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Article 383

1- The bank may require security to be provided in return for issuing the letter of guarantee.

2- Such security may consist of an assignment by the applicant of its rights against the beneficiary.

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Article 384

The beneficiary may not assign to a third party its rights arising under the letter of guarantee without the bank’s consent.

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Article 385

The bank may not refuse payment to the beneficiary for a reason relating to the relationship between the bank and the applicant or the relationship between the applicant and the beneficiary.

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Article 386

The bank shall be discharged towards the beneficiary if it does not receive a demand for payment from the beneficiary during the period of validity of the letter of guarantee, unless it is expressly agreed before the expiry of that period that it shall be renewed.

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Article 387

If the bank pays the beneficiary the sum agreed in the letter of guarantee, it shall be subrogated to the beneficiary’s rights of recourse against the applicant to the extent of the sum paid.

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Article 388

A current account is a contract under which two persons agree to record in an account, by way of reciprocal and interlocking remittances, the debts arising from the transactions carried out between them, such as the delivery of money, property or transferable commercial papers and other items, and to replace the settlement of each such debt separately with a final settlement resulting in the balance of the account upon its closure.

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Article 389

A current account may be overdrawn on the side of both parties or on the side of one party only. In the latter case, neither party shall be bound to advance funds to the other unless the former has a sufficient balance.

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Article 390

1- If the items of the current account include monetary debts denominated in different currencies or dissimilar items, the parties may agree to include them in the account, provided that they are recorded in separate sections maintaining homogeneity among the remittances they contain, and that the parties declare that the account retains its unity notwithstanding the multiplicity of its sections.

2- The balances of such sections must be convertible so that, at the time determined by the parties or at the latest upon the closure of the account, they may be set off against one another to produce a single balance.

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Article 391

1- Ownership of money or property recorded in the current account shall pass to the party receiving it.

2- Each party to the current account may at any time dispose of its credit balance, unless otherwise agreed.

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Article 392

The entry of a commercial paper in the current account shall be valid, provided that its value shall not be counted if it is not paid on maturity. In such case, it may be returned to its owner and its entry reversed in the manner set out in Article 403.

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Article 393

1- All debts arising from business relations between the parties to the account shall be entered in the current account by operation of law, unless such debts are secured by legal or contractual securities.

2- Nevertheless, debts secured by contractual securities, whether provided by the debtor or by a third party, may be entered in the current account if all the parties concerned expressly so agree.

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Article 394

1- If it is agreed to enter in the current account a debt secured by a contractual security, such security shall transfer to secure the balance of the account upon its closure up to the amount of the debt, regardless of changes in the account during its operation, unless otherwise agreed.

2- If the law requires particular formalities for the creation of the security or for its enforceability against third parties, its transfer to the balance shall not take place, and it may not be relied upon, except from the date on which those formalities are completed.

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Article 395

Debts owed to either party, once they enter the current account, lose their special characteristics and separate identity, and shall thereafter not be capable of separate payment, set-off or extinction by prescription.

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Article 396

The entry of remittances in the current account shall not extinguish the parties’ rights of action relating to the contracts and transactions that gave rise to such remittances, unless otherwise stipulated.

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Article 397

1- Remittances in the current account shall not bear interest unless otherwise agreed. If the agreement does not specify the interest rate, it shall be calculated according to custom.

2- In current accounts with banks, interest may be calculated on interest while the account remains open. Such interest shall not be calculated until three months have elapsed from the date on which the interest was entered in the account.

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Article 398

1- The items of the current account, taken as a whole, are indivisible before the account is closed and the final balance is struck. Only the closure of the account gives rise to the global set-off of all the items in the account.

2- Nevertheless, a creditor of either party to the account may, while the account is in operation, levy an attachment on the debtor’s credit balance at the time of the attachment. In such case, the party with whom the account is held shall draw up a provisional balance of the account to disclose the position of the person whose property is attached at the time of the attachment.

3- If it has been agreed that the person whose property is attached may not dispose of its credit balance while the account is in operation, the attachment shall take effect only in respect of the final balance in that person’s favour upon the closure of the account.

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Article 399

1- If a period is fixed for the closure of the account, it shall be closed upon the expiry of that period. It may be closed before the expiry of that period by agreement of the parties.
2- If no period is fixed for the current account, it may be closed at any time at the will of either party, subject to the agreed notice periods or those established by custom.
3- In all cases, the account shall be closed upon the death, loss of capacity or bankruptcy of either party.
4- The account may be provisionally stopped while in operation in order to establish the position of each party, at the times agreed by the parties or determined by local custom, failing which at the end of every three months.

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Article 400

Upon the closure of the account, the balance debt shall be deemed due, unless the parties have agreed otherwise or certain transactions that must be included in the account have not yet been completed and their entry would alter the amount of the balance.

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Article 401

The general rules on prescription shall apply to the balance debt and the interest thereon. Legal interest shall run on the balance debt from the date of closure of the account, unless otherwise agreed.

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Article 402

If a debt entered in the account is extinguished or its amount reduced for a reason arising after its entry in the account, its entry must be cancelled or reduced and the account adjusted accordingly.

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Article 403

1- If the proceeds of the discount of a commercial paper have been credited to a current account and the value of the paper is not paid on maturity, the person who discounted the paper may, even after the bankruptcy of the person who presented it for discount, cancel the entry by making a reverse entry.

2- A reverse entry means debiting to the account a sum equal to the value of the commercial paper plus legal interest from the maturity date and expenses.

3- A reverse entry may only be made in respect of commercial papers that have not been paid on their maturity dates. Any agreement to the contrary shall be null and void.

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Article 404

1- Actions for the correction of the account on grounds of error, omission or duplication of entries, or other corrections, shall not be admissible after the expiry of six months from the date of receipt of the settlement statement of account sent by registered post with acknowledgement of receipt.

2- In all cases, every action relating to the current account shall be time-barred on the expiry of five years, which period shall run from the date of closure of the account.

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Article 405

A bill of exchange shall contain the following particulars:

1- The term “bill of exchange” inserted in the body of the instrument and expressed in the language in which it is drawn up.

2- The date and place of issue of the bill of exchange.

3- The name of the person who is to pay (the drawee).

4- The name of the person to whom or to whose order payment is to be made.

5- An unconditional order to pay a specified sum of money.

6- The time of payment (maturity).

7- The place of payment.

8- The signature of the person who issues the bill of exchange (the drawer).

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Article 406

An instrument lacking any of the particulars set out in the preceding Article shall not be deemed a bill of exchange, except in the following cases:

1- A bill of exchange that does not state its place of issue shall be deemed to have been issued at the place stated next to the name of the drawer.

2- A bill of exchange that does not state its maturity shall be deemed payable at sight.

3- If the bill of exchange does not state the place of payment, the place stated next to the name of the drawee shall be deemed both the place of payment and the domicile of the drawee. The bill of exchange shall be payable at the domicile of the drawee if payment at another place is not stipulated.

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Article 407

1- A bill of exchange may be drawn payable to the drawer’s own order.

2- It may be drawn on the drawer.

3- It may be drawn for the account of another person.

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Article 408

1- If the amount of the bill of exchange is written both in words and in figures, the amount written in words shall prevail in the event of discrepancy.

2- If the amount is written more than once, whether in words or in figures, the smaller amount shall prevail in the event of discrepancy.

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Article 409

1- Interest on the amount stated in the bill of exchange may not be stipulated unless the bill is payable at sight or at a fixed period after sight.

2- The rate of interest must be stated in the bill of exchange itself; otherwise, the stipulation shall be void.

3- Interest shall run from the date of issue of the bill of exchange if no other date is specified.

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Article 410

1- The capacity of a person bound by a bill of exchange shall be determined by that person’s national law.

2- If a person lacks capacity under their national law, their obligation shall nevertheless remain valid if they signed in the territory of a state whose legislation would regard them as having full capacity.

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Article 411

The obligations of minors who are not traders, and of persons lacking capacity, arising from their signatures on a bill of exchange as drawers, endorsers, acceptors, guarantors (avals) or in any other capacity, shall be void in respect of them only, and they may rely on such nullity against every holder of the bill of exchange.

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Article 412

If a bill of exchange bears signatures of persons incapable of being bound by it, forged signatures, signatures of fictitious persons, or signatures that for any other reason are not binding on the persons who signed or in whose names it was signed, the obligations of the other signatories shall nevertheless remain valid.

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Article 413

1- Any person who signs a bill of exchange on behalf of another without authority from that person shall be personally bound by the bill of exchange and, if such person pays it, shall acquire the rights that would have accrued to the person whom they purported to represent.
2- This provision shall apply to any person who exceeds the limits of their authority.

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Article 414

1- The drawer of a bill of exchange guarantees both its acceptance and its payment.
2- The drawer may stipulate exemption from the guarantee of acceptance, but not from the guarantee of payment.

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Article 415

1- A bill of exchange may be drawn in a set of identical parts.
2- Each part must be numbered in its body; otherwise, each part shall be deemed a separate bill of exchange.
3- Every holder of a bill of exchange that does not state that it is a sole bill may obtain several parts at the holder’s own expense. For this purpose, the holder must apply to the holder’s immediate endorser, who shall be bound to assist in applying to the endorser’s own endorser, and so on in turn back to the drawer.
4- Each endorser must reproduce their endorsement on the new parts.

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Article 416

1- Payment of one part of a bill of exchange shall operate as a discharge, even if there is no stipulation that such payment annuls the effect of the other parts. However, the drawee shall remain bound to pay on each accepted part that the drawee has not recovered.

2- An endorser who has endorsed the parts of the bill of exchange to different persons, as well as subsequent endorsers, shall be bound on all the parts bearing their signatures that they have not recovered.

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Article 417

A person who sends one part of a bill of exchange for acceptance must indicate on the other parts the name of the person in whose possession that part is, and the latter must deliver it to the lawful holder of any other part. If that person refuses to deliver it, the holder shall have no right of recourse unless the holder establishes by protest:

1- That the part sent for acceptance was not delivered to the holder despite the holder’s request for it.

2- That acceptance or payment could not be obtained on another part.

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Article 418

1- The holder of a bill of exchange may make copies of it.

2- A copy must exactly reproduce the original bill of exchange, with the endorsements and any other particulars appearing thereon, and must indicate where the copy of the original ends.

3- The copy may be endorsed and guaranteed by aval in the same manner as the original, and shall have the same effects as the original.

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Article 419

1- The copy of the bill of exchange must specify the name of the holder of the original, who must deliver the original to the lawful holder of the copy.
2- If the holder of the original refuses to deliver it, the holder of the copy shall have no right of recourse against the endorsers or guarantors (avals) of the copy unless the holder establishes by protest that the original was not delivered on request.
3- If the words “from now on endorsement only valid on the copy” are written on the original after the last endorsement made before the copy was taken, any endorsement subsequently written on the original shall be void.

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Article 420

If the body of a bill of exchange is altered, persons who signed after the alteration shall be bound according to the terms of the altered text, and persons who signed before the alteration shall be bound according to the terms of the original text.

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Article 421

1- Every bill of exchange, even if not expressly drawn to order, may be transferred by endorsement.
2- A bill of exchange in which the drawer has inserted the words “not to order” or any equivalent expression may only be transferred in accordance with the provisions on the assignment of rights.
3- A bill may be endorsed to the drawee, whether or not the drawee has accepted it, and may also be endorsed to the drawer or to any other obligor. All such persons may re-endorse the bill of exchange.

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Article 422

1- The endorsement shall be written on the bill of exchange itself or on a slip attached to it, and shall be signed by the endorser.
2- An endorsement made after maturity has the same effects as one made before maturity. However, an endorsement made after a protest for non-payment, or after the expiry of the legal time limit for drawing up the protest, shall operate only as an assignment of rights.
3- An undated endorsement shall be presumed, until the contrary is proven, to have been made before the expiry of the time limit for drawing up the protest.

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Article 423

An endorsement may not be antedated. If this occurs, it shall be deemed forgery.

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Article 424

An endorsement need not specify the name of the beneficiary, and may consist simply of the signature of the endorser (endorsement in blank). In the latter case, the endorsement, to be valid, must be written on the back of the bill of exchange or on the slip attached to it.

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Article 425

1- Without prejudice to the provision of Article 427, an endorsement may not be made subject to a condition, and any condition to which it is made subject shall be deemed not written.
2- A partial endorsement is void.
3- An endorsement to bearer shall be deemed an endorsement in blank.

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Article 426

If the endorsement is in blank, the holder may:
a- Fill up the blank with the holder’s own name or with the name of another person.
b- Re-endorse the bill of exchange in blank or to another person.
c- Transfer the bill of exchange to another person without filling up the blank and without endorsing it.

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Article 427

1- In the absence of any stipulation to the contrary, the endorser guarantees acceptance and payment of the bill of exchange.

2- The endorser may prohibit any further endorsement, in which case the endorser shall not be bound by the guarantee to persons to whom the bill of exchange is subsequently endorsed.

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Article 428

1- The possessor of a bill of exchange shall be deemed its lawful holder if the possessor establishes title to it through an uninterrupted series of endorsements, even if the last endorsement is in blank. Cancelled endorsements shall for this purpose be deemed not written. When an endorsement in blank is followed by another endorsement, the person who signed the latter shall be deemed to have acquired the bill of exchange by the endorsement in blank.
2- Where a person has been dispossessed of a bill of exchange, the holder who establishes title to it in the manner provided above shall not be bound to give it up unless the holder acquired it in bad faith or committed gross negligence in acquiring it.

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Article 429

1- An endorsement transfers all the rights arising out of the bill of exchange.
2- Without prejudice to the provision of Article 411, a debtor sued on a bill of exchange may not set up against the holder defences founded on the debtor’s personal relations with the drawer or with previous holders, unless the holder, in acquiring the bill, knowingly acted to the detriment of the debtor.

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Article 430

1- When an endorsement contains the words “value for collection”, “for collection”, “by procuration” or any other phrase implying a mere mandate, the holder may exercise all rights arising out of the bill of exchange, but may endorse it only in the capacity of an agent.

2- In such case, the obligors may set up against the holder only such defences as could be set up against the endorser.

3- The mandate contained in an endorsement by procuration shall not terminate by reason of the death of the principal or the principal’s supervening incapacity.

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Article 431

1- When an endorsement contains the words “value in security”, “value in pledge” or any other phrase implying a pledge, the holder may exercise all the rights arising out of the bill of exchange, but an endorsement by the holder shall be deemed an endorsement by procuration.

2- The debtor on the bill of exchange may not set up against the holder defences founded on the debtor’s personal relations with the endorser, unless the holder, in acquiring the bill, knowingly acted to the detriment of the debtor.

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Article 432

The drawer of the bill of exchange, or the person for whose account it is drawn, must provide the drawee with cover (provision) for its payment. However, this shall not relieve a drawer for the account of another of personal liability towards the endorsers and holders, and towards them alone.

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Article 433

Cover shall be deemed to exist if, at the maturity of the bill of exchange, the drawee is indebted to the drawer, or to the person for whose account the bill is drawn, in a specified sum of money that is due and payable and at least equal to the amount of the bill.

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Article 434

1- Acceptance of the bill of exchange shall constitute a presumption of the existence of cover with the acceptor. Evidence to rebut this presumption shall not be admissible in the relationship between the drawee and the holder.

2- In the event of denial, the drawer alone must prove, whether or not the bill of exchange has been accepted, that the drawee held cover for its payment at maturity. If the drawer fails to prove this, the drawer shall remain guarantor of payment even if the protest was drawn up after the legal time limit. If the drawer proves the existence of cover and that it continued to exist until the time when the protest should have been drawn up, the drawer shall be discharged to the extent of such cover, unless it has been used for the drawer’s benefit.

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Article 435

1- Ownership of the cover passes by operation of law to the successive holders of the bill of exchange.
2- If the cover is less than the value of the bill of exchange, the holder shall have over such partial cover all the rights the holder would have over full cover. This provision shall apply if the cover consists of a debt that is disputed, uncertain or not yet due at the maturity of the bill of exchange.

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Article 436

1- The drawer must, even if the protest was drawn up after the legal time limit, deliver to the holder of the bill of exchange the documents necessary to obtain the cover. If the drawer becomes bankrupt, this obligation shall fall on the trustee in bankruptcy.

2- The costs thereof shall in all cases be borne by the holder of the bill of exchange.

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Article 437

If the drawer becomes bankrupt, even before the maturity of the bill of exchange, its holder, to the exclusion of the drawer’s other creditors, shall be entitled to recover its right from the cover validly held by the drawee.

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Article 438

1- If the drawee becomes bankrupt and the cover consists of a debt owed by the drawee, that debt shall form part of the assets of the bankruptcy estate.
2- If, however, the drawer has with the drawee goods, commercial papers, securities or other assets that may be reclaimed under the bankruptcy provisions, or that are held as security for payment of the bill of exchange, the holder shall have priority in recovering its right from their value.

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Article 439

1- If several bills of exchange are drawn against a single cover whose value is insufficient to pay all of them, the order of the dates on which they were drawn shall be observed with regard to the rights of their holders to recover their debts from such cover, and the holder of the bill of exchange bearing the earliest date shall have priority over the others.
2- If the bills of exchange were drawn on the same date, the bill bearing the drawee’s acceptance shall have priority.
3- If no bill of exchange bears the drawee’s acceptance, the bill for whose payment the cover was specifically allocated shall have priority.
4- Bills of exchange containing a non-acceptance clause shall rank last.

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Article 440

The holder of a bill of exchange, or any person in possession of it, may, until maturity, present it to the drawee at the drawee’s domicile for acceptance.

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Article 441

1- The drawer of a bill of exchange may stipulate that it must be presented for acceptance, with or without fixing a time limit.

2- The drawer may prohibit its presentation for acceptance, unless it is payable by a third party, at a place other than the drawee’s domicile, or at a fixed period after sight.

3- The drawer may stipulate that it shall not be presented for acceptance before a specified date.

4- Every endorser may stipulate that the bill of exchange shall be presented for acceptance, with or without fixing a time limit, unless the drawer has prohibited its presentation for acceptance.

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Article 442

1- A bill of exchange payable at a fixed period after sight must be presented for acceptance within one year of its date.

2- The drawer may shorten or extend this period.

3- Every endorser may shorten this period.

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Article 443

The drawee may demand that the bill of exchange be presented for acceptance a second time on the day following the first presentation. Interested parties may not allege that this demand was refused unless the demand is mentioned in the protest.

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Article 444

1- The holder of a bill of exchange presented for acceptance shall not be bound to surrender it to the drawee.

2- Acceptance shall be written on the bill of exchange itself, expressed by the word “accepted” or any other equivalent expression, and signed by the drawee.

3- The mere signature of the drawee on the face of the bill of exchange shall constitute acceptance.

4- If the bill of exchange is payable at a fixed period after sight, or must be presented for acceptance within a specified period by virtue of a special stipulation, the acceptance must be dated as of the day on which it was given, unless the holder requires that it be dated as of the day of presentation. If the acceptance is undated, the holder, in order to preserve the holder’s right of recourse against the endorsers or the drawer, may establish the omission by a protest drawn up in good time.

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Article 445

1- Acceptance must be unconditional. The drawee may, however, restrict it to part of the amount of the bill of exchange.
2- Any modification of the particulars of the bill of exchange introduced by the acceptance shall operate as a refusal to accept. The acceptor shall nevertheless be bound according to the terms of the acceptance.

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Article 446

1- If the drawee cancels the acceptance written on the bill of exchange before returning it, the cancelled acceptance shall be deemed a refusal. The cancellation shall be deemed, until the contrary is proven, to have been made before the return of the bill.
2- Nevertheless, if the drawee has notified the holder or any other signatory in writing of the acceptance, the drawee shall be bound to them by that acceptance.

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Article 447

1- If the drawer has specified in the bill of exchange a place of payment other than the domicile of the drawee, without designating the person at whose premises payment is to be made, the drawee may designate such person at the time of acceptance. If the drawee does not do so, the acceptor shall be deemed bound to pay at the place of payment.

2- If the bill of exchange is payable at the drawee’s domicile, the drawee may, in the acceptance, specify an address in the same place at which payment is to be made.

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Article 448

1- By accepting the bill of exchange, the drawee becomes bound to pay its value at maturity.

2- In default of payment, the holder, even if the holder is the drawer, shall have a direct action on the bill of exchange against the accepting drawee for everything that may be claimed under Articles 482 and 483.

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Article 449

1- Payment of the whole or part of the amount of a bill of exchange may be guaranteed by an aval.

2- This guarantee may be given by any person, even by a signatory of the bill of exchange.

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Article 450

1- The aval shall be written on the bill of exchange itself or on a slip attached to it.
2- It shall be expressed by the words “good as aval” or any other equivalent expression, and signed by the giver of the aval.
3- The aval must specify for whose account it is given; in default of this, it shall be deemed to be given for the drawer.
4- An aval shall be inferred from the mere signature of the giver of the aval on the face of the bill of exchange, unless the signature is that of the drawee or the drawer.

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Article 451

1- The giver of an aval is bound in the same manner as the person for whom the aval is given.
2- The undertaking of the giver of an aval shall be valid even if the obligation it guarantees is void for any reason other than a defect of form.
3- If the giver of an aval pays the bill of exchange, the giver shall acquire the rights arising out of it against the person guaranteed and against every person liable to the latter on the bill of exchange.

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Article 452

1- An aval may be given on a separate document stating the place where it was given.

2- A giver of an aval by separate document shall be bound only to the person to whom the aval was given.

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Article 453

1- A bill of exchange may be drawn payable in any of the following ways:

a- At sight.

b- At a fixed period after sight.

c- At a fixed period after date.

d- On a fixed date.

2- Bills of exchange with other maturities or with successive maturities shall be void.

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Article 454

1- A bill of exchange payable at sight is payable on presentation. It must be presented for payment within one year of its date. The drawer may shorten or extend this period, and the endorsers may shorten it.

2- The drawer may stipulate that a bill of exchange payable at sight shall not be presented before a specified date, in which case the period for presentation shall run from that date.

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Article 455

1- The maturity of a bill of exchange payable at a fixed period after sight shall be determined by the date of acceptance or the date of protest.

2- In the absence of a protest, an undated acceptance shall be deemed, as regards the acceptor, to have been given on the last day of the period prescribed for presentation for acceptance under Article 442.

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Article 456

1- A bill of exchange drawn payable at one or more months after date or after sight matures on the corresponding date of the month in which payment must be made. If there is no corresponding date in that month, the bill matures on the last day of that month.

2- When a bill of exchange is drawn at one or more months and a half after date or after sight, entire months shall be calculated first. The term “half a month” means fifteen days.

3- The terms “eight days” or “fifteen days” do not mean one or two weeks, but a period of eight or fifteen actual days.

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Article 457

If a bill of exchange is payable on a fixed date and maturity is expressed as the beginning, middle or end of a month, these expressions mean the first, the fifteenth or the last day of the month.

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Article 458

1- If a bill of exchange is payable on a fixed date in a country whose calendar differs from that of the country of issue, the date of maturity shall be deemed fixed according to the calendar of the place of payment.

2- If a bill of exchange drawn between two countries having different calendars is payable at a fixed period after date, the date of issue shall be converted into the corresponding day of the calendar of the place of payment, and the date of maturity shall be fixed accordingly. The time limits for presentation of bills of exchange shall be calculated in the same manner.

3- The foregoing provisions shall not apply if a stipulation in the bill of exchange, or even the simple terms of the instrument, indicate an intention to adopt different rules.

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Article 459

1- The holder of a bill of exchange must present it for payment on the day it falls due. Presentation to a legally recognised clearing house shall be equivalent to presentation for payment.

2- A person who pays a bill of exchange at maturity without valid opposition is validly discharged, unless that person has been guilty of fraud or gross negligence. That person is bound to verify the regularity of the series of endorsements, but not the authenticity of the endorsers’ signatures.

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Article 460

1- The holder of a bill of exchange cannot be compelled to receive payment before maturity.

2- A drawee who pays the bill of exchange before maturity does so at the drawee’s own risk.

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Article 461

1- A drawee who pays a bill of exchange may require that it be delivered up by the holder, receipted for payment.
2- The holder may not refuse partial payment.
3- In case of partial payment, the drawee may require that mention of such payment be made on the bill of exchange and that a receipt therefor be given.
4- Any sum paid on account of the bill of exchange shall discharge its drawer, endorsers and other obligors to that extent. The holder must have a protest drawn up for the unpaid balance.

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Article 462

1- If the bill of exchange is not presented for payment on the due date, any debtor thereunder may deposit its amount with the court treasury. The deposit shall be made at the expense and risk of the holder.

2- The court registry shall deliver to the depositor a document stating the deposit of the sum, its amount, the date of the bill of exchange, its maturity date and the name of the person in whose favour it was originally drawn.

3- If the holder demands payment from the debtor, the debtor must deliver the deposit document in exchange for the bill of exchange, and the holder may collect the sum from the registry on the strength of that document. If the debtor does not deliver the deposit document to the holder, the debtor must pay the holder the value of the bill of exchange.

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Article 463

1- If a bill of exchange is stipulated to be payable in Kuwait in a currency that is not current there, it may be paid in the currency current in Kuwait according to its rate of exchange on the date of maturity. If payment is not made on the date of maturity, the holder may, at the holder’s option, demand that the amount of the bill of exchange be paid in the currency current in Kuwait according to the rate of exchange on the date of maturity or on the date of payment.

2- The value of foreign currency shall be determined according to the custom prevailing in Kuwait. Nevertheless, the drawer may stipulate in the bill of exchange the rate of exchange at which the sum payable is to be calculated.

3- If the amount of the bill of exchange is specified in a currency having the same denomination but a different value in the country of issue and the country of payment, reference shall be presumed to be made to the currency of the place of payment.

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Article 464

No opposition to payment of a bill of exchange shall be admissible except in the case of its loss or the bankruptcy of its holder.

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Article 465

If an unaccepted bill of exchange drawn in a set of parts is lost, the person entitled to its value may claim payment on one of its other parts.

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Article 466

If the bill of exchange was drawn in a set of parts and the part bearing the acceptance is lost, payment may not be claimed on one of its other parts except by order of the President of the Court of First Instance and subject to the provision of a guarantor.

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Article 467

A person who has lost a bill of exchange, whether accepted or not, and is unable to produce one of its other parts, may obtain from the President of the Court of First Instance an order for its payment, provided that the person proves ownership of it and provides a guarantor.

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Article 468

1- In the event of refusal to pay the lost bill of exchange after a claim has been made in accordance with the two preceding Articles, its owner must, in order to preserve all the owner’s rights, record this in a protest drawn up on the day following the maturity date and notified to the drawer and the endorsers in the manner and within the time limits prescribed in Article 480.
2- The protest must be drawn up and notified even if it is not possible to obtain the order of the President of the Court in good time.

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Article 469

1- The owner of a lost bill of exchange may obtain a duplicate of it by applying to the person who endorsed the bill to the owner. That endorser shall be bound to assist the owner and to permit the use of the endorser’s name in claiming against the previous endorser, and the owner shall proceed in this claim from endorser to endorser until reaching the drawer.
2- Each endorser shall be bound to write their endorsement on the duplicate of the bill of exchange delivered by the drawer, after it has been annotated as a replacement for a lost bill.
3- Payment may not be demanded on such duplicate except by order of the President of the Court of First Instance and subject to the provision of a guarantor.
4- All expenses shall be borne by the owner of the lost bill of exchange.

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Article 470

Payment at maturity pursuant to an order of the President of the Court in the cases referred to in the preceding Articles shall discharge the debtor.

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Article 471

The obligation of the guarantor provided for in Articles 466, 467 and 469 shall be extinguished on the expiry of three years if no claim or action before the courts is made during that period.

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Article 472

1- If the bill of exchange is not paid at maturity, the holder may exercise the right of recourse against the endorsers, the drawer and the other obligors.

2- The holder may exercise the right of recourse against them before maturity in the following cases:

a- In the event of total or partial refusal of acceptance.

b- In the event of the bankruptcy of the drawee, whether or not the drawee has accepted the bill of exchange; in the event of the drawee’s suspension of payments, even if not established by a judgment; and in the event of a fruitless attachment of the drawee’s property.

c- In the event of the bankruptcy of the drawer of a non-acceptable bill of exchange. Guarantors against whom recourse is exercised in the cases set out in paragraphs (b) and (c) may, within three days of the date on which recourse is exercised against them, submit to the President of the Court of First Instance a petition requesting a period of grace for payment. If the President of the Court finds the request justified, the President shall fix in the order the time within which payment must be made, provided that the period granted does not extend beyond the date fixed for the maturity of the bill of exchange. This order shall not be subject to appeal.

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Article 473

1- If the maturity of the bill of exchange falls on an official holiday, payment may not be demanded until the next business day.

2- Likewise, no act relating to the bill of exchange, in particular its presentation for acceptance or the drawing up of a protest or equivalent act, may be performed except on a business day.

3- If a specified period is fixed for the performance of any act relating to the bill of exchange and the last day of that period falls on a holiday, the period shall be extended to the following day.

4- Holidays falling within the period shall be included in its computation.

5- The first day shall not be included in the computation of the legal or contractual periods relating to the bill of exchange, unless otherwise provided.

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Article 474

1- Refusal of acceptance or of payment of the bill of exchange shall be established by a protest for non-acceptance or non-payment drawn up by an enforcement officer.

2- The protest shall contain a literal copy of the bill of exchange and of the acceptances and endorsements written on it, together with the demand for payment of the value of the bill of exchange, and shall state the presence or absence of the person bound to accept or pay and the reasons for the refusal to accept or pay.

3- The enforcement officer charged with drawing up the protest must leave a copy of it with the person against whom it was drawn up.

4- The enforcement officer must enter the protest papers in full, day by day, in chronological order, in a special register with numbered pages, duly initialled, and the entries in that register shall be made in the manner followed in index registers.

5- The enforcement officer must, within the first ten days of each month, send to the Commercial Register office a list of the protests for non-payment drawn up during the previous month in respect of accepted bills of exchange and promissory notes.

6- The Commercial Register office shall keep a book in which such protests are entered. Any person may inspect them upon payment of the prescribed fees, and the office shall issue a bulletin listing such protests.

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Article 475

A protest for non-acceptance must be drawn up within the time limits fixed for presentation of the bill of exchange for acceptance. If the first presentation for acceptance under Article 443 took place on the last day of the time limit fixed for presentation, the protest may be drawn up on the following day.

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Article 476

1- A protest for non-payment of a bill of exchange payable on a fixed date, or at a fixed period after date or after sight, must be drawn up on one of the two business days following the day on which the bill of exchange is payable.

2- If the bill of exchange is payable at sight, the protest for non-payment must be drawn up in accordance with the conditions set out in the preceding Article in respect of the protest for non-acceptance.

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Article 477

A protest for non-acceptance shall dispense with presentation of the bill of exchange for payment and with the drawing up of a protest for non-payment.

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Article 478

1- In the event of the drawee’s suspension of payments, whether or not the drawee has accepted the bill of exchange, and in the event of a fruitless attachment of the drawee’s property, the holder of the bill of exchange may not exercise the right of recourse against its guarantors until after presentation of the bill of exchange to the drawee for payment and the drawing up of a protest for non-payment.
2- In the event of the bankruptcy of the drawee, whether or not the drawee has accepted the bill of exchange, and in the event of the bankruptcy of the drawer of a non-acceptable bill of exchange, the production of the judgment declaring the bankruptcy shall in itself be sufficient to enable the holder to exercise the holder’s rights of recourse against the guarantors.

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Article 479

1- The drawer, any endorser or any giver of an aval may, by the stipulation “retour sans frais”, “without protest” or any other equivalent expression written on the bill of exchange and signed, release the holder from having a protest for non-acceptance or non-payment drawn up in order to exercise the holder’s right of recourse.
2- This stipulation does not release the holder from the obligation to present the bill of exchange within the prescribed time limits or to give the required notices. The burden of proving non-observance of the time limits lies on the person who seeks to rely on it against the holder.
3- If the stipulation is written by the drawer, it is operative in respect of all signatories. If it is written by an endorser or a giver of an aval, it is operative only in respect of that endorser or giver of an aval.
4- If, notwithstanding a stipulation written by the drawer, the holder has the protest drawn up, the holder alone shall bear the expenses. If the stipulation emanates from an endorser or a giver of an aval, the costs of the protest, if one is drawn up, may be recovered from all the signatories.

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Article 480

a- The holder of a bill of exchange must give notice of non-acceptance or non-payment to the drawer and to the holder’s endorser within the four business days following the day of the protest or, where the bill contains a stipulation releasing the holder from protest, the day of presentation for acceptance or payment. Each endorser must, within the two business days following the day on which the endorser receives notice, inform the endorser’s own endorser of the notice received, stating the names and addresses of those who have given the previous notices, and so on through the series of endorsers until the drawer is reached. The period for each endorser shall run from the date on which that endorser received the notice.
b- When notice is given to a signatory of the bill of exchange in accordance with the preceding paragraph, the same notice must be given within the same time limit to the giver of an aval for that signatory.
c- If an endorser has not specified an address, or has specified it in an illegible form, it shall be sufficient to give notice to the preceding endorser.
d- A person who must give notice may give it in any form whatever, even by simply returning the bill of exchange.
e- That person must prove that the notice was given within the prescribed time limit. The time limit shall be deemed observed if the notice was sent by registered letter within that time limit.
f- A person who does not give notice within the time limit set out in the preceding paragraphs does not forfeit their rights, but shall be liable, where appropriate, for any damage caused by their negligence, provided that the compensation does not exceed the amount of the bill of exchange.

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Article 481

1- The drawer, acceptor, endorser and giver of an aval of a bill of exchange are all jointly and severally liable to the holder. The holder may therefore proceed against them individually or collectively, without being required to observe any order.

2- The same right is possessed by any signatory of a bill of exchange who has paid it, against those who are liable to that signatory.

3- Proceedings against one of the obligors do not preclude proceedings against the others, even if they are subsequent to the party first proceeded against.

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Article 482

1- The holder of a bill of exchange may recover from the person against whom the holder exercises the right of recourse:

a- The principal amount of the unaccepted or unpaid bill of exchange, with interest if stipulated.

b- Interest at the legal rate of 7% from the date of maturity, without prejudice to the provision of Article 110 of this Code.

c- The expenses of protest and notices and other expenses.

2- Where recourse is exercised before the maturity of the bill of exchange, a deduction equal to the official discount rate prevailing at the date of recourse at the place of the holder’s domicile shall be made from its value.

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Article 483

A person who has paid a bill of exchange may recover from the persons liable to them:

1- The entire sum paid.

2- Interest on the sum paid, calculated at the legal rate of 7% from the date of payment.

3- The expenses incurred.

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Article 484

The courts may not grant periods of grace for payment of the value of bills of exchange or for the performance of any act relating to them, except in the cases provided for by law.

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Article 485

1- Every obligor against whom recourse is exercised on a bill of exchange, or who is exposed to such recourse, may, upon payment, require delivery of the bill of exchange together with the protest and a receipt for the sum paid.

2- Every endorser who has paid the bill of exchange may cancel the endorser’s own endorsement and those of subsequent endorsers.

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Article 486

In the event of recourse against an obligor for the unaccepted portion of the value of the bill of exchange, the person who pays such portion may require the holder to record such payment on the bill of exchange and give a receipt therefor. In addition, the holder must deliver to that person a copy of the bill of exchange certified as a true copy, together with the protest, to enable that person to exercise their right of recourse against others.

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Article 487

1- The holder of a bill of exchange loses the holder’s rights against the drawer, the endorsers and the other obligors, with the exception of the acceptor, on the expiry of the time limits fixed for:
a- Presentation of a bill of exchange payable at sight or at a fixed period after sight.
b- Drawing up a protest for non-acceptance or non-payment.
c- Presentation of the bill of exchange for payment where it contains a stipulation releasing the holder from protest.
2- Nevertheless, the drawer may benefit from such forfeiture only if the drawer proves that cover existed at maturity, in which case the holder shall retain only a right of recourse against the drawee.
3- If the bill of exchange is not presented for acceptance within the time limit stipulated by the drawer, the holder loses the right of recourse for non-acceptance and non-payment, unless the terms of the stipulation show that the drawer intended only to release themselves from the guarantee of acceptance.
4- If the endorser stipulated in the endorsement a time limit for presentation for acceptance, that endorser alone may benefit from such stipulation.

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Article 488

1- If presentation of the bill of exchange or the drawing up of the protest within the prescribed time limits is prevented by an insurmountable force majeure event, those time limits shall be extended.
2- The holder must give notice of the force majeure event without delay to the holder’s endorser and must record such notice, dated and signed, on the bill of exchange or on the slip attached to it. The notices shall be passed on in succession until they reach the drawer.
3- After the force majeure event has ceased, the holder must present the bill of exchange for acceptance or payment and, where necessary, have a protest drawn up.
4- If the force majeure event continues for more than thirty days from the date of maturity, recourse may be exercised against the obligors without the need to present the bill of exchange or to draw up a protest.
5- If the bill of exchange is payable at sight or at a fixed period after sight, the thirty-day period shall run from the date on which the holder notified the holder’s endorser of the force majeure event, even if that date falls before the expiry of the time limits for presentation of the bill of exchange. Where the bill of exchange is payable at a fixed period after sight, the thirty-day period shall be increased by the period after sight specified in the bill.
6- Facts that are purely personal to the holder of the bill of exchange, or to the person whom the holder has entrusted with its presentation or with drawing up the protest, shall not be deemed to constitute force majeure.

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Article 489

The holder of a bill of exchange in respect of which a protest for non-payment has been drawn up may levy a precautionary attachment on the movables of the drawer, the acceptor, the endorser, the giver of an aval and the other obligors on the bill of exchange, subject to the procedures prescribed in the Code of Civil and Commercial Procedure for precautionary attachments.

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Article 490

Any person having a right of recourse against other obligors on the bill of exchange may recover their right by drawing a new bill of exchange (redraft) on one of the persons liable to them, payable at sight and payable at the domicile of that person, unless otherwise stipulated.

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Article 491

1- The redraft shall include the sums set out in Articles 482 and 483, plus any commission paid and any other legally prescribed fees.

2- If the redraft is drawn by the holder, its amount shall be fixed on the basis of the value of a sight bill drawn from the place where the original bill of exchange was payable on the place of domicile of the person liable.

3- If the redraft is drawn by an endorser, its amount shall be fixed on the basis of the value of a sight bill drawn from the place of domicile of the drawer of the redraft on the place of domicile of the person liable.

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Article 492

If there are several redrafts, the drawer of the original bill of exchange or any endorser thereof may not be charged with more than the value of a single redraft.

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Article 493

1- The drawer, an endorser or a giver of an aval of a bill of exchange may specify a person to accept or pay it in case of need.

2- A bill of exchange may be accepted or paid by any person intervening for the benefit of any debtor thereunder against whom recourse may be exercised.

3- The intervening party may be a third party, or even the drawee if the drawee has not accepted the bill, or any person already liable on the bill of exchange.

4- The intervening party must notify the party for whose benefit the intervention was made within the two following business days; otherwise, the intervening party shall be liable, where appropriate, for any damage resulting from such negligence, provided that the compensation does not exceed the amount of the bill of exchange.

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Article 494

1- Acceptance by intervention may take place in all cases where the holder of a bill of exchange that is capable of acceptance is entitled to exercise recourse before maturity.
2- If a person has been specified in the bill of exchange to accept or pay it in case of need at the place of payment, the holder may not exercise the right of recourse before maturity against the person who made the specification or against subsequent signatories, unless the holder has presented the bill of exchange to the person so specified and that person has refused to accept it, and the holder has established such refusal by protest.
3- In other cases, the holder may refuse acceptance by intervention. If the holder accepts it, the holder loses the right of recourse before maturity against the person for whose benefit the intervention was made and against subsequent signatories.

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Article 495

Acceptance by intervention shall be stated on the bill of exchange itself, signed by the intervening party and shall specify the person for whose benefit it is given. In the absence of such specification, the acceptance by intervention shall be deemed to have been given for the benefit of the drawer.

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Article 496

1- The acceptor by intervention is liable to the holder and to the endorsers subsequent to the party for whose benefit the intervention was made in the same manner as that party.
2- Notwithstanding the acceptance by intervention, the party for whose benefit it was given and the persons liable to that party may, upon payment of the sum specified in Article 482, require the holder to deliver to them the bill of exchange, the protest and the receipt, if any.

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Article 497

1- Payment by intervention may take place in all cases where, either at maturity or before maturity, the holder has a right of recourse against the obligors on the bill of exchange.
2- Such payment must include the entire amount that would have had to be paid by the party for whose benefit it is made.
3- Payment must be made at the latest on the day following the last day allowed for drawing up the protest for non-payment.

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Article 498

1- If the bill of exchange has been accepted by persons intervening, or if persons have been specified to pay it in case of need, who have their domicile at the place of payment, the holder must present the bill of exchange to all these persons for payment and, if necessary, have a protest for non-payment drawn up at the latest on the day following the last day allowed for drawing up the protest.

2- If the protest is not drawn up within that time limit, the party who specified the referee in case of need, or for whose benefit the bill of exchange was accepted by intervention, as well as subsequent endorsers, shall be discharged from their obligations.

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Article 499

A holder who refuses payment by intervention loses the right of recourse against any persons who would have been discharged by such payment.

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Article 500

1- Payment by intervention must be evidenced by a receipt written on the bill of exchange specifying the person for whose benefit payment has been made. In the absence of such specification, the payment by intervention shall be deemed to have been made for the benefit of the drawer.

2- The bill of exchange and the protest, if any, must be delivered to the person paying by intervention.

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Article 501

1- A person who pays a bill of exchange by intervention acquires all the rights arising out of the bill of exchange against the party for whose benefit payment was made and against the persons liable to that party on the bill of exchange. Such person may not, however, re-endorse the bill of exchange.

2- The endorsers subsequent to the party for whose benefit payment was made are discharged.

3- When several persons offer to pay a bill of exchange by intervention, preference shall be given to the person whose payment effects the greatest number of discharges. Any person who, with knowledge of the facts, intervenes in contravention of this rule loses the right of recourse against those who would have been discharged had the rule been observed.

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Article 502

1- All actions arising out of a bill of exchange against the acceptor are time-barred on the expiry of three years from the date of maturity.

2- Actions by the holder against the endorsers or the drawer are time-barred on the expiry of one year from the date of a protest drawn up within the legal time limit or, where the bill of exchange contains a stipulation releasing the holder from protest, from the date of maturity.

3- Actions by endorsers against each other or against the drawer are time-barred on the expiry of six months from the day on which the endorser paid the bill of exchange or from the day on which proceedings were brought against the endorser.

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Article 503

1- Where an action is brought, the limitation periods shall run only from the date of the last procedural step taken therein.
2- Prescription shall not run if a judgment has been given for the debt, or if the debtor has acknowledged it in a separate instrument in a manner that results in novation of the debt.

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Article 504

Interruption of prescription shall have effect only against the person in respect of whom the interrupting step was taken.

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Article 505

Notwithstanding the expiry of the limitation period, the persons sued for the debt must, if so required, swear on oath that they are discharged of the debt, and their heirs or other successors must swear on oath that they do not know that the deceased died still owing the debt.

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Article 506

A promissory note shall contain the following particulars:
1- The order clause or the term “promissory note” inserted in the body of the instrument and expressed in the language in which it is drawn up.
2- The date and place of issue of the note.
3- The name of the person to whom or to whose order payment is to be made.
4- An unconditional promise to pay a specified sum of money.
5- The time of payment (maturity).
6- The place of payment.
7- The signature of the person who issues the note (the maker).

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Article 507

An instrument lacking any of the particulars set out in the preceding Article shall not be deemed a promissory note, except in the following cases:
a- A note that does not state its place of issue shall be deemed to have been issued at the place stated next to the name of the maker.
b- A note that does not state its maturity shall be deemed payable at sight.

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Article 508

1- The provisions relating to bills of exchange concerning parts and copies, endorsement, maturity, payment, recourse for non-payment, the prohibition on granting periods of grace for payment, precautionary attachment, protest, computation of time limits and business days, recourse by way of redraft, payment by intervention and prescription shall apply to promissory notes, in so far as they are not inconsistent with the nature of such instruments.
2- The rules relating to bills of exchange payable at the domicile of a third party or at a place other than the drawee’s domicile, the stipulation of interest, discrepancies in the statement of the amount payable, and the consequences of signature by persons lacking capacity to be bound, non-binding signatures, or signature by a person without authority or exceeding their authority, shall also apply to promissory notes.
3- The provisions relating to the aval shall likewise apply to promissory notes, provided that, if the aval does not specify for whose account it is given, it shall be deemed to have been given for the account of the maker of the note.

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Article 509

1- The maker of a promissory note is bound in the same manner as the acceptor of a bill of exchange.
2- A promissory note payable at a fixed period after sight must be presented to the maker within the time limit provided for in Article 442 for endorsement as sighted. Such endorsement must be dated and signed by the maker.
3- The period after sight shall run from the date of such endorsement.
4- If the maker refuses to give the endorsement, such refusal must be established by protest, and the date of the protest shall be the starting point of the period after sight.

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Article 510

Save as provided in this Chapter, the provisions relating to bills of exchange shall apply to cheques in so far as they are not inconsistent with the nature of cheques.

Article 511

Elements of a cheque
A cheque shall contain the following particulars:
1- The term “cheque” inserted in the body of the instrument and expressed in the language in which it is drawn up.
2- The date and place of issue of the cheque.
3- The name of the person who is to pay (the drawee).
4- The name of the person to whom or to whose order payment is to be made, in accordance with Articles 516 and 517.
5- An unconditional order to pay a specified sum of money.
6- The place of payment.
7- The signature of the person who issues the cheque (the drawer).

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Article 512

An instrument lacking any of the particulars set out in the preceding Article shall not be deemed a cheque, except in the following two cases:
1- A cheque that does not state its place of issue shall be deemed to have been issued at the place stated next to the name of the drawer.
2- If the cheque does not state its place of payment, the place stated next to the name of the drawee shall be deemed the place of payment. If several places are stated next to the name of the drawee, the cheque shall be payable at the first place stated. If the cheque contains none of these particulars or any other indication, it shall be payable at the place where the drawee has its principal establishment.

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Article 513

1- Cheques issued in Kuwait and payable there may only be drawn on a bank. Instruments drawn in the form of cheques on a person other than a bank shall not be deemed valid cheques.
2- Every bank holding funds available to a creditor and issuing to that creditor a book of blank cheques for payment from its funds must write on each cheque the name of the person to whom the book was issued.

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Article 514

1- A cheque may not be issued unless, at the time of its issue, the drawer has funds with the drawee which the drawer is entitled to dispose of by cheque in accordance with an express or implied agreement.

2- The drawer of the cheque, or the person for whose account it is drawn, must provide cover for its payment. Nevertheless, a drawer for the account of another remains personally liable to the endorsers and the holder, and to them alone.

3- In the event of denial, the drawer alone must prove that the drawee held cover at the time the cheque was issued. If the drawer fails to prove this, the drawer shall remain guarantor of its payment, even if the protest was drawn up after the prescribed time limits.

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Article 515

1- A cheque cannot be accepted. A statement of acceptance written on a cheque shall be deemed not written.
2- Nevertheless, the drawee may endorse the cheque as certified. Such endorsement shall indicate the existence of cover on the date of certification.
3- The drawee may not refuse to certify the cheque if it holds cover sufficient to pay its value.
4- The signature of the drawee on the face of the cheque shall be deemed certification of it.

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Article 516

1- A cheque may be made payable:
a- To a named person, with or without the express clause “to order”.
b- To a named person, with the clause “not to order” or any equivalent expression.
c- To bearer.
2- A cheque made payable to a named person with the words “or bearer” or any equivalent expression shall be deemed a cheque to bearer. A cheque that does not specify the name of the payee shall be deemed a cheque to bearer.
3- A cheque bearing the clause “not negotiable” shall be paid only to the holder who received it bearing that clause.

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Article 517

1- A cheque may be drawn to the order of the drawer.
2- It may be drawn for the account of another person.
3- It may not be drawn on the drawer, except where it is drawn by one establishment on another establishment both belonging to the drawer, provided that it is not payable to bearer.

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Article 518

Any stipulation of interest in a cheque shall be deemed not written.

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Article 519

A cheque may be made payable at another bank located in the place of the drawee’s domicile or in any other place.

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Article 520

1- The drawer guarantees payment of the cheque. Any stipulation by which the drawer releases themselves from this guarantee shall be deemed not written.

2- Acceptance by a creditor of a cheque in payment of a debt shall not effect novation of the debt; rather, the original debt shall subsist with all its securities until the value of the cheque is paid.

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Article 521

Sets of parts and alteration: Except for cheques to bearer, a cheque may be drawn in a set of identical parts if it is drawn in one country and payable in another country or in an overseas part of the same country, or vice versa, or if it is drawn and payable in an overseas part or different overseas parts of the same country.

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Article 522

If a cheque is drawn in more than one part, each part must be numbered in its body; otherwise, each part shall be deemed a separate cheque.

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Article 523

1- The drawee alone shall bear the loss resulting from payment of a cheque on which the drawer’s signature has been forged or the particulars in its body have been altered, if no fault can be attributed to the drawer named in the cheque. Any stipulation to the contrary shall be deemed not written.

2- The drawer shall in particular be deemed at fault if the drawer fails to exercise the care of an ordinary person in safeguarding the cheque book issued to the drawer.

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Article 524

1- A cheque made payable to a named person, whether or not it expressly contains the clause “to order”, may be transferred by endorsement.
2- A cheque made payable to a named person and bearing the words “not to order” or any equivalent expression may only be transferred in accordance with the provisions on the assignment of rights.
3- A cheque may be endorsed even to the drawer or to any other obligor, and such persons may re-endorse the cheque.

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Article 525

An endorsement to the drawee shall operate only as a receipt, unless the drawee has several establishments and the endorsement is made for the benefit of an establishment other than that on which the cheque was drawn.

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Article 526

1- In the absence of any stipulation to the contrary, the endorser guarantees payment of the cheque.

2- The endorser may prohibit any further endorsement, in which case the endorser shall not be bound by the guarantee to persons to whom the cheque is subsequently endorsed.

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Article 527

The possessor of an endorsable cheque shall be deemed its lawful holder if the possessor establishes title to it through an uninterrupted series of endorsements, even if the last endorsement is in blank. Cancelled endorsements shall for this purpose be deemed not written. When an endorsement in blank is followed by another endorsement, the person who signed the latter shall be deemed to have acquired the cheque by the endorsement in blank.

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Article 528

An endorsement written on a cheque to bearer renders the endorser liable in accordance with the provisions on recourse, but does not convert the instrument into a cheque to order.

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Article 529

Where a person has been dispossessed of a cheque, whether it is a cheque to bearer or an endorsable cheque, the person into whose possession the cheque has come shall not be bound to give it up if that person establishes title to it in the manner set out in Article 527, unless that person acquired it in bad faith or committed gross negligence in acquiring it.

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Article 530

1- An endorsement made after protest, or after the expiry of the time limit for presentation of the cheque, operates only as an assignment of rights.
2- An undated endorsement shall be presumed, until the contrary is proven, to have been made before the protest or before the expiry of the time limit for presentation of the cheque.
3- An endorsement may not be antedated. If this occurs, it shall be deemed forgery.

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Article 531

1- Payment of the whole or part of the amount of a cheque may be guaranteed by an aval.

2- This guarantee may be given by a third party other than the drawee, or by a signatory of the cheque.

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Article 532

1- A cheque is payable at sight. Any contrary stipulation shall be deemed not written.

2- A cheque presented for payment before the date stated on it as its date of issue is payable on the day of presentation.

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Article 533

1- A cheque drawn in Kuwait and payable there must be presented for payment within one month.

2- If it is drawn outside Kuwait and payable in Kuwait, it must be presented within three months.

3- The aforementioned time limits shall run from the date stated on the cheque as its date of issue.

4- Presentation of a cheque to a legally recognised clearing house shall be equivalent to presentation for payment.

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Article 534

If a cheque is drawn between two places having different calendars, the date of issue shall be converted into the corresponding day of the calendar of the place of payment.

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Article 535

1- The drawee must pay the value of the cheque even after the expiry of the time limit for its presentation.

2- No opposition by the drawer to payment of the cheque shall be admissible except in the case of its loss or the bankruptcy of its holder.

3- If, notwithstanding this prohibition, the drawer lodges an opposition for other reasons, the Judge of Urgent Matters must, at the request of the holder, order the opposition to be dismissed, even if a principal action is pending.

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Article 536

The death, incapacity or bankruptcy of the drawer after the issue of the cheque shall not affect the legal effects of the cheque.

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Article 537

1- If several cheques are presented at the same time and the cover is insufficient to pay all of them, the dates on which they were drawn must be observed.

2- If the cheques presented are detached from the same book and bear the same date of issue, the cheque bearing the earlier number shall be deemed to have been drawn before the others, unless the contrary is proven.

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Article 538

1- If a cheque is stipulated to be payable in Kuwait in a currency that is not current there, its amount may be paid, within the time limit for presentation of the cheque, in the currency current in Kuwait according to its rate of exchange on the day of payment. If payment is not made on the day of presentation, the holder may, at the holder’s option, demand that the amount of the cheque be paid in the currency current in Kuwait according to the rate of exchange on the day of presentation or on the day of payment.
2- If the cheque is presented for the first time after the expiry of the time limit for its presentation, the rate of exchange on the day on which the time limit for presentation expired shall apply.
3- The value of foreign currency shall be determined according to the custom prevailing in Kuwait. The drawer may, however, specify in the cheque the rate of exchange at which the sum payable is to be calculated.
4- If the amount of the cheque is specified in a currency having the same denomination but a different value in the country of issue and the country of payment, reference shall be presumed to be made to the currency of the place of payment.

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Article 539

The obligation of a guarantor provided in the event of the loss of a cheque to order shall be extinguished on the expiry of six months if no claim or action is made during that period.

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Article 540

1- If a cheque to bearer is lost or destroyed, its owner may lodge an opposition with the drawee to its payment. The opposition must include the number of the cheque, its amount, the name of its drawer and every other particular that may assist in identifying it, as well as the circumstances surrounding its loss or destruction. If it is not possible to provide some of these particulars, the reasons must be stated. If the person lodging the opposition has no domicile in Kuwait, that person must designate an address for service there.

2- Upon receiving the opposition, the drawee must refrain from paying the value of the cheque to its possessor and must set aside the cover for the cheque until the matter is decided.

3- The drawee shall, at the expense of the person lodging the opposition, publish in the Official Gazette the number of the lost or destroyed cheque, its amount, the name of its drawer and the name and address of the person lodging the opposition. Any dealing in the cheque after the date of such publication shall be void.

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Article 541

1- The possessor of the cheque referred to in the preceding Article may contest the opposition with the drawee. The drawee must take the cheque from the possessor against a receipt and then notify the person lodging the opposition, by registered letter with acknowledgement of receipt, of the name and address of the possessor of the cheque.

2- The possessor of the cheque must notify the person lodging the opposition, by registered letter with acknowledgement of receipt, that an action claiming entitlement to the cheque must be brought within one month of the date of receipt of the notice. The notice shall state the grounds and date of possession of the cheque.

3- If the person lodging the opposition does not bring the action for entitlement within the time limit provided for in the preceding paragraph, the Judge of Urgent Matters must, at the request of the possessor of the cheque, dismiss the opposition. In such case, the possessor of the cheque shall be deemed its lawful owner as regards the drawee.

4- If the person lodging the opposition brings an action claiming entitlement to the cheque, the drawee may pay its value only to whichever of the two parties produces a final judgment establishing ownership of the cheque or an amicable settlement approved by both parties acknowledging that party’s ownership.

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Article 542

1- If six months elapse from the date of the opposition provided for in Article 540 without the possessor of the cheque coming forward to claim payment, the person who lodged the opposition may, within the following two months, apply to the court for permission to collect the value of the cheque. This judgment shall be issued against the drawee after the court has verified the ownership of the cheque by the person who lodged the opposition.
2- If the person who lodged the opposition does not submit the application within the time limit referred to in the preceding paragraph, or submits it and the court rejects it, the drawee must re-credit the cover to the assets side of the drawer’s account.

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Article 543

1- The drawer or the holder of a cheque may cross it, and such crossing shall have the effects set out in the following Article.
2- Crossing is effected by drawing two parallel lines on the face of the cheque.
3- The crossing may be general or special.
4- The crossing is general if it consists of the two lines only, or if the word “bank” or any equivalent term is written between them. The crossing is special if the name of a particular bank is written between the lines.
5- A general crossing may be converted into a special crossing, but a special crossing may not be converted into a general crossing.
6- The cancellation of a crossing or of the name of the bank written between the lines shall be deemed not to have been made.

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Article 544

1- The drawee may pay a cheque bearing a general crossing only to one of its customers or to a bank.
2- The drawee may pay a cheque bearing a special crossing only to the bank named between the lines, or, if the latter is the drawee, to a customer of that bank. However, the bank named between the lines may entrust another bank with collecting the value of the cheque.
3- A bank may acquire a crossed cheque only from one of its customers or from another bank, and may not collect its value for the account of persons other than those mentioned.
4- If a cheque bears several special crossings, the drawee may pay it only if it bears two crossings, one of which is for collection through a clearing house.
5- If the drawee fails to comply with the foregoing provisions, it shall be liable for compensation for the damage up to the amount of the cheque.
6- In this Article, the term “customer” means any person who has an account with the drawee and has obtained a cheque book from it or is entitled to obtain such a book.

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Article 545

1- The drawer or the holder of a cheque may stipulate that it shall not be paid in cash by writing on its face the words “for account only” or any equivalent expression. In such case, the drawee may settle the value of the cheque only by book entries, such as crediting an account, bank transfer or set-off, and such book entries shall be equivalent to payment.
2- The cancellation of the words “for account only” shall be disregarded.
3- If the drawee fails to comply with the foregoing provisions, it shall be liable for compensation for the damage up to the value of the cheque.

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Article 546

1- The holder of a cheque may exercise the right of recourse against the drawer, the endorsers and the other obligors if the holder presented it within the legal time limit and its value was not paid, and the refusal of payment is established by protest. In lieu of a protest, refusal of payment may be established:
a- By a declaration made by the drawee stating the day of presentation of the cheque.
b- By a declaration made by a clearing house stating that the cheque was presented within the legal time limit and its value was not paid.
2- The declaration must be dated, written on the cheque itself and signed by the person making it.
3- The declaration referred to in the preceding paragraph may not be refused if the holder requests it, even if the cheque contains the stipulation “retour sans frais”. The drawee may, however, request a period not exceeding the business day following the presentation of the cheque, even if it was presented on the last day of the time limit for presentation.

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Article 547

The holder retains the right of recourse against the drawer even if the holder does not present the cheque to the drawee, or does not have a protest or equivalent act drawn up, within the legal time limit, unless the drawer had provided cover which remained with the drawee until the expiry of the time limit for the cheque and the cover was subsequently lost through an act not attributable to the drawer.

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Article 548

Refusal of payment must be established in the manner provided for in Article 546 before the expiry of the time limit for presentation. If presentation takes place on the last day of that time limit, refusal of payment may be established on the following business day.

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Article 549

1- If presentation of the cheque or the drawing up of the protest or equivalent act within the prescribed time limits is prevented by an insurmountable force majeure event, those time limits shall be extended.
2- The holder must give notice of the force majeure event without delay to the holder’s endorser and must record such notice, dated and signed, on the cheque or on the slip attached to it. The notices shall be passed on in succession until they reach the drawer.
3- After the force majeure event has ceased, the holder must present the cheque for payment without delay and, where necessary, have a protest or equivalent act drawn up.
4- If the force majeure event continues for more than fifteen days from the date on which the holder notified the holder’s endorser of the force majeure event, even if that date falls before the expiry of the time limit for presentation of the cheque, recourse may be exercised against the obligors without the need to present the cheque or to draw up a protest or equivalent act.
5- Facts that are purely personal to the holder of the cheque, or to the person whom the holder has entrusted with its presentation or with drawing up the protest or equivalent act, shall not be deemed to constitute force majeure.

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Article 550

1- Actions of recourse by the holder of a cheque against the drawee, the drawer, the endorser and the other obligors are time-barred on the expiry of six months from the date of expiry of the time limit for presentation of the cheque.

2- Actions of recourse by the various obligors on the cheque against one another are time-barred on the expiry of six months from the day on which the obligor paid or from the day on which proceedings were brought against the obligor.

3- Notwithstanding the expiry of the limitation period, the defendants must, if so required, confirm on oath that they are discharged of the debt, and their heirs or other successors must swear on oath that they do not know that the deceased died still owing the debt.

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Article 551

1- Where an action is brought, the limitation period provided for in the preceding Article shall run only from the date of the last procedural step taken therein.

2- Such prescription shall not run if a judgment has been given for the debt, or if the debtor has acknowledged it in a separate instrument in a manner that results in novation of the debt.

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Article 552

Interruption of prescription shall have effect only against the person in respect of whom the interrupting step was taken.

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Article 553

The prescription of the action for payment of the value of the cheque shall not prevent the holder from claiming from a drawer who did not provide cover, or who provided it and withdrew it in whole or in part, the restitution of the amount by which the drawer has been unjustly enriched. This provision shall apply to the drawer where recourse is exercised against the drawer by the obligors who paid the value of the cheque.

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Article 554

1- If criminal proceedings are brought against the drawer for any of the cheque offences, the holder of the cheque who has joined the proceedings as a civil claimant may request the criminal court to award the holder a sum equal to the unpaid portion of the value of the cheque, together with legal interest on that portion calculated from the day the cheque was presented for payment, and supplementary compensation where appropriate.
2- The Public Prosecution shall publish in the Official Gazette the names of persons convicted of any of the cheque offences, stating their occupations, domiciles and the penalties imposed on them.

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Articles 555 to 800

Repealed

*Repealed by Law No. 71 of 2020 Promulgating the Bankruptcy Law.