The new Saudi consumer-protection law
As Saudi authorities work to consolidate consumer-protection concepts through trading controls and regulations, a draft of a new consumer protection law was recently issued.
Here we shed light on its provisions that apply to contracts concluded with consumers, whether they are model versions prepared by the economic operator or specially negotiated. Negotiated contract provisions are preferred over the provisions of a model contract, since the negotiated terms reflect each party’s specific needs.
The operator shall provide all required information during the contracting process, such as a clear explanation of the terms and conditions of the contract, and all necessary information about the product or service and the method of use, according to the nature of each of them.
The contract should include the following information: Descriptions and basic characteristics of the product or service; the economic operator’s identification data, including trade name and address; the contact information of the economic operator, including telephone number, email address and any other electronic means of communication; the price of the product or service; and the terms of payment, delivery and execution.
In terms of the provisions for exchange and return, the contract must clarify and state the conditions for the installation, use and maintenance of the product. It should also state the risks of using the product or service, if any, and ways to prevent, reduce or eliminate them, along with the policy and procedures for handling consumer complaints, including a designated email address for submission of said complaints.
The inclusion of an unfair condition in a contract between the economic operator and the consumer is prohibited. If there is found to be an unfair condition it will be considered void but the remainder of the contract will stand, unless the unfair condition affects the rest of the contract.
This raises the question of what is considered an unfair condition? A condition is unfair if it results in a serious discrepancy between the rights of the parties to the contract and their corresponding obligations, to the detriment of the consumer, provided that the circumstances in which the contract was concluded are taken into consideration.
In all cases, a condition in a contract between an economic operator and a consumer will be considered unfair if: It exempts the economic operator from its obligations under the law and related regulations; it grants the economic operator the unilateral power to terminate the contract, amend it or interpret its terms; it exempts or limits the economic operator from any liability arising from its own error or negligence; or it excludes or limits consumers’ rights to resort to the judiciary, or obligates consumers to initiate judicial procedures or file a lawsuit before a court in a location other than their place of residence.
As for discounts, such offers may be made and announced provided they do not involve any misleading practices, in accordance with the provisions of the regulations of this law. Moreover, operators shall follow the conditions and controls specified in regulations when announcing and conducting such discount campaigns.
When organizing competitions, the operator must obtain a license from the competent authorities to hold or advertise such contests. Operators are prohibited from placing competition vouchers inside a product, nor can they require the purchase of a product or service as a condition for participation in the competition. They are also prohibited from increasing the prices of products or services related to a competition while it is running.
• Dimah Talal Alsharif is a Saudi lawyer and legal consultant.