Commercial contracts are the backbone of business activities in Kuwait. They define the legal relationship between business parties and establish clear rights and obligations. To ensure enforceability, Kuwaiti law requires several substantive and formal conditions.
What Is a Commercial Contract?
A commercial contract is a legally binding agreement between two or more parties for commercial activities. It is considered commercial if it relates to business transactions or is concluded between merchants during their operations.
Common types in Kuwait include:
- Commercial sale and purchase agreements.
- Supply contracts.
- Construction and service agreements.
- Agency and distribution contracts.
- Commercial finance agreements.
Legal Requirements for Valid Commercial Contracts in Kuwait
- Legal Capacity: All parties must be competent adults, not under interdiction, and capable of expressing valid consent.
- Free Consent: Consent must be given freely, without coercion or fraud.
- Lawful Subject Matter: The subject must be lawful, specific, and not violate public order or morals in Kuwait.
- Defined Consideration: The contract must include a specific price or fee that is determinable.
Key Elements of Drafting
- Parties’ Information: Legal names, commercial registration numbers, and official addresses.
- Description of Obligations: Type of goods/services, quantity, technical specifications, and delivery timelines.
- Financial Terms: Agreed price, currency, payment schedule, and method.
- Dispute Resolution: It is recommended to include arbitration clauses and specify Kuwaiti law as the governing law.
Common Mistakes to Avoid
- Using vague or ambiguous language.
Failing to specify precise deadlines. - Omitting delay compensation or breach clauses.
- Neglecting termination or dispute resolution mechanisms.
The Role of a Lawyer in Drafting Abdulaziz Saud Al Subaiei Law Firm
one of the fastest-growing firms in Kuwait—provides legal support to ensure:
- Sound and clear legal drafting.
- Accurate risk and obligation assessment.
- Compliance with the Kuwaiti legal system.
- Protection of client rights and achieving the best outcomes.
Seeking creative legal ways to safeguard your rights?
Partner with Abdulaziz Saud Al-Subaie Legal Group. Serving Kuwait since 1991, our expert team provides comprehensive support for all your legal needs
Book your consultation nowFrequently Asked Questions (FAQ)
Difference between Commercial and Civil Contracts?
Commercial contracts relate to business and follow Commercial Law; civil contracts follow Civil Law.
Is documentation required?
Not all contracts need documentation, but registration enhances legal weight.
Can English be used?
Yes, provided legal provisions are clear; an Arabic translation is preferred for Kuwaiti courts.
What if it violates public order?
The contract or violating clause is considered void.
