Only in Saudi Arabia can you file a Court Application to modify, nullify or expunge an unfair/one-sided/onerous FIDIC Amendments from your Contract.

AUTHOR’S FOREWORD

Construction contracts have always been governed by a delicate balance between freedom of contract and the limits imposed by law. For decades, contractors across many jurisdictions — particularly in the Middle East — have operated under heavily amended standard forms, often accepting onerous risk allocations in the name of commercial necessity. Once signed, these contracts were treated as sacrosanct, leaving little room to challenge unfair provisions, however disproportionate their impact might be.

Saudi Arabia’s Civil Transactions Law has fundamentally altered this landscape. With the introduction of Article 720, the Kingdom has taken an unprecedented step by codifying forty-one classical Islamic legal maxims into binding statutory law. These principles — long respected as moral and interpretive guides — have now been elevated into enforceable legal rules. For the first time, they are black-letter law.

This book was written with a clear and practical objective: an hands-on guide designed to help contractors, project managers, engineers, quantity surveyors, contract administrators, and legal advisors understand how these 41 rules operate in real construction disputes — particularly in the context of amended FIDIC-based contracts that dominate the Saudi construction industry.

What makes Article 720 truly transformative is not merely its content, but its legal status. Courts and tribunals are no longer confined to enforcing harsh contractual clauses simply because they were agreed. Where a clause causes unjust harm, imposes disproportionate hardship, relies on uncertainty, or contradicts established custom, the court now has express statutory authority to strike it down.

This represents a decisive shift away from blind reliance on contractual wording and toward a system where fairness, intent, and justice are guaranteed by law rather than hoped for through interpretation.

Each rule in this book has been carefully explained, contextualised, and illustrated through construction-specific examples. The aim is to bridge the gap between legal principle and site reality — to show not only what the rule means, but how and when it can be deployed effectively in claims, disputes, negotiations, and contract administration.

Saudi Arabia is the first jurisdiction in the world to codify Islamic legal maxims in this manner for civil and commercial application. As such, Article 720 does more than resolve individual disputes — it signals a new direction for construction law in Sharia+ systems, aligning them more closely with the statutory protections long found in mature civil and common law jurisdictions.

Understanding Article 720 is no longer optional. In Saudi construction law today, ignorance of these forty-one rules is no excuse — mastery of them may well determine the outcome of the disputes of tomorrow. ……………………………………………………..

AUTHOR BIOGRAPHY Steven Chin is an international construction contracts and dispute-prevention specialist with extensive experience in contract administration, execution risk control, and dispute avoidance across Common Law, Civil Law, and Sharia-based jurisdictions.

His work focuses on helping contractors, project teams, and commercial leaders understand how contracts actually operate during execution, and how disciplined practices in documentation, authority, and decision-making can prevent disputes before they escalate. He has advised and trained teams on complex construction projects involving heavily amended standard forms, multi-party interfaces, and high commercial exposure. …………………………………………………………….

Essential Basic Law Knowledge — What you need to know for better comprehension. Let start with the very basic such as :-

The Dynamics of Construction Contract Law: Comparative Insights from Civil, Common, and Sharia Systems

Part 1 — The Hierarchy of Laws in Construction Contracts

Common Legal Foundation

Despite differences, Civil, Common, and Sharia systems share a hierarchy of laws:

  • Supreme Law: Constitution (or Qur’an, Hadiths, Sunnah in Sharia)
  • Statutory Law: Statutes, Acts, Codes, Royal Decrees
  • Unwritten Law: Rules of equity, case law, customs
  • Private Law: Contracts (Terms & Conditions)

Principle of Supremacy

  • Higher law supercede/overrides lower law.
  • Contracts (private law) are valid only if not in conflict with Statutory law.
  • Thus, unfair clauses remain binding unless invalidated by a higher Statutory provision (if any).

Court Process (How):

  • When a dispute arises, parties may file a claim before court or arbitration tribunal.
  • The court or tribunal first identifies the applicable law (Supreme/Statutory or Unwritten ).
  • Only if Statutory Law is silent does the court or tribunal examine the Contract terms.

If conflict exists, Statutory Law prevails, and the Contract clause can be struck down through the Courts.

  • Civil Law
  • Constitution as supreme law
  • Statutes, acts, and codes which are also referred to in the legal fraternity as as Written Law (laws created by the legislature)
  • Private Law (Contracts T&Cs) as unwritten law, valid only if not contradicting a higher law which in this case are Statutory Law.
  • Sharia Law
  • The Qur’an, Hadiths, and Sunnah as supreme authority
  • Constitution and Statutory enactments follow beneath
  • Royal decrees, ministerial regulations, and commercial codes
  • Contracts valid only if consistent with Sharia principles
  • Common Law
  • Constitution as supreme law
  • Statutes & Acts form the legislative foundation of Statutory Law (aka Written Law)
  • Rules of equity and Case laws shape interpretation and application.
  • Private Law (Contracts T&Cs) enforceable unless conflicting with the Statutory Law or Public Policy

Key Principle: In all three systems, the Statutory Law is superior to Unwritten Law (also referred to as Private Law. Private Law are the private agreements created by 2 or more contracting parties . This ensures that private agreements cannot override Public Policy or Statutory Provisions.

*** In short Statutory Construction Law will always supersede any Contract terms made by the contracting parties despite being agreed by private agreement.

Part 2 — Sanctity of Contract and Privity of Contract

The Sanctity of Contract

The sanctity of contract ensures that agreements voluntarily entered into by competent parties are binding. In construction law, this principle creates predictability and stability for large-scale projects involving multiple stakeholders.

The Doctrine of Privity

Privity of contract means only the contracting parties can enforce obligations or claim benefits. In construction, this doctrine is particularly important because subcontractors often cannot claim directly against employers unless statutory protections (e.g., direct payment mechanisms) intervene.

Enforceability of Unfair Terms

In practice, onerous or unfair terms — such as broad indemnities, “time is of the essence” clauses, or unilateral termination rights etc — are enforceable unless there is a higher Statutory Law which conflict with or prohibits them. For example:

  • In Common Law jurisdictions, courts may refuse enforcement if Contract terms breach the Statutory provisions.
  • In Civil Law, Codified principles can be used to restrict abusive clauses.
  • In Sharia, contracts that cause unjust harm (darar) may be struck down if the related maxims are codified.
  • Tribunal interprets the clause in light of Statutory protections.
  • If no Statutory protection exists, the contract clause despite being unfair/onerous will be enforced.
  • Burden of proof lies on the party alleging unfairness.

The above dynamic explains why Contractors are powerless and often remain bound by clauses that tilt risk distribution heavily in the employer’s favor, unless Statutory intervention applies.

Part 3 — Legal Maxims and Their Limited Role in Construction Disputes

Legal maxims are timeless principles distilled from legal reasoning.

  • Civil Law — Maxims are embedded in codified provisions.
  • Common Law — Maxims exist in equity (e.g., “equity will not suffer a wrong without a remedy”).
  • Sharia Law — Maxims derived from Qur’an and Sunnah (e.g., “certainty cannot be dispelled by doubt (Rule 16 under Article 720 of the KSA Civil Transaction Law 2023”).

3.1 Limitations in Construction Disputes

  • Maxims are persuasive, not binding, unless codified.
  • They are often too general for the highly detailed nature of construction contracts.
  • Tribunals prioritize statutes and contractual clauses over abstract principles.

Thus, while maxims are directory and guide interpretation, they rarely win disputes outright.

Part 4 — The Paradigm Shift: Codification of Islamic Legal Maxims under Saudi Construction Law.

Traditionally, Islamic Legal Maxims (known as Qawaʿid Fiqhiyyah) are guiding principles derived from centuries of Islamic jurisprudence. They are broad rules like “Harm shall be removed” or “Certainty cannot be dispelled by doubt ”.

Judges and scholars have used them as interpretative tools, but they were never binding statutory law — more like guiding wisdom than hard rules. However, Saudi Arabia’s Civil Transaction Law (CTL) changed that in Article 720, by codifying 41 of these maxims directly into black-letter law. This means they are no longer just “moral guidance” — they are legal rules enforceable in court.

And Saudi Arabia is the first country in the world to do this, specifically with construction contracts in mind.

What It Means in Construction Disputes

Construction contracts (like FIDIC-based ones) often contain heavily amended clauses favoring employers or project owners. Contractors among others usually face:

  • “Pay-if-paid” clauses → no payment unless the owner pays first.
  • Waivers of rights → no claim for time or cost, even if delays weren’t the contractor’s fault.
  • Unbalanced termination rights → employers can terminate at will, contractors cannot.
  • Ambiguities → vague terms that always get interpreted against the weaker party.

Previously, unless a statutory law existed to strike down such terms, courts would enforce them, citing the sanctity of contract.

This has changed in Saudi Arabia, Contractors now have 41 powerful, legally binding shields gazetted as Statutory Laws. This ismade possible through Article 720 of the KSA Civil Transaction Law 2024. For example 4 of the major ones are :

  • Rule 3: “Custom shall have legal effect” → Possible Application : Industry practice (e.g., standard FIDIC balance of risk clauses) can override unfair/one-sided amendments.