Earnest money (arboun)In Arabic: العربون

Definition

Earnest money (arboun) is a sum one party pays when the contract is made. Its legal meaning is not the same across the GCC: a right for the payer to withdraw, an option for either party to withdraw, or evidence that the contract is already final.

The contract should say which meaning is intended. The word alone should not be left to carry the rule of a country whose law is not the one the parties chose.

How it varies across the GCC

In Saudi Arabia only the payer may withdraw, and loses the sum on doing so, unless the parties agree otherwise (Civil Transactions Law, article 44). In Bahrain either party may withdraw (article 52). In Oman payment of earnest money shows that the contract has become final (article 84).

The rules that apply to a specific matter depend on the state, any free zone involved and the current text of the law, so check the official source before relying on them.

Sources

Official texts for the points on this page. General information, not legal advice. An article number is cited only where it was verified.

1. Saudi Civil Transactions Law, art. 44https://laws.boe.gov.sa/BoeLaws/Laws/LawDetails/655fdb42-8c96-422b-b8c4-b04f0095c94c/1
2. Bahrain Civil Code, Decree-Law No. 19 of 2001, art. 52https://www.lloc.gov.bh/Legislation/HTM/L1901
3. Oman Civil Transactions Law, Royal Decree 29/2013 (text on qanoon.om), art. 84https://qanoon.om/p/2013/rd2013029/