Try the questions in the test above first, then open each one here to see the correct answer and why every other option is wrong.
01Three legal rules: (1) a rule imposing a fine on anyone who carries on a commercial activity without a licence. (2) a rule providing that delivery costs of the goods are borne by the seller unless an agreement or custom provides otherwise. (3) a rule providing that rent is paid at the end of the term unless the parties agree otherwise. How many of them are mandatory?
Practice question Unit: Introduction to the study of law
ANone of them
The first rule is penal and cannot be contracted out of, so it is wrong to say all are supplementary.
BTwo
The second and third rules say that agreement to the contrary is allowed, so neither is mandatory.
CAll three
The phrase 'unless the parties agree' in the last two rules removes their mandatory character, so not all three are mandatory.
DOnly one ✓ Correct answer
Correct: only the first rule is mandatory; the second and third expressly allow agreement to the contrary, so they are supplementary.
Reference: Introduction to law: mandatory and supplementary rules
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02Mohammed sells a villa to Salman and writes into the contract a condition forbidding Salman to sell or otherwise dispose of it for the rest of his life, with no legitimate interest behind it. What is the status of this condition?
Practice question Unit: Financial transactions (Civil Transactions Law)
AValid, because an owner may attach any condition he likes to a disposition
The law restricts an owner's freedom to impose a bar on disposal: it is allowed only for a reasonable period and for a legitimate interest.
BValid, but the court shortens its duration by custom without voiding it
The court sets the period only when none was specified; a lifelong bar with no legitimate interest is simply void.
CThe entire sale contract becomes void because of this condition
Voiding the condition does not reach the sale itself; where a contract contains a void condition, only the condition falls and the sale stands.
DVoid, as it lasts unreasonably long and serves no legitimate interest ✓ Correct answer
Correct: any condition barring the transferee from disposing is void unless it is for a reasonable period and meant to protect a legitimate interest.
Reference: Civil Transactions Law (Royal Decree No. M/191, 1444 AH), Article 617, paragraph 3, and Article 74, paragraph 2
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03A supplier's right to the price of goods delivered to a merchant arose six years ago, and he filed no claim during that time. In 2026 he sues before the commercial court. The defendant has not acknowledged the debt and the supplier offers no excuse. What is the effect under the Commercial Courts Law?
Practice question Unit: Principles of commercial law
AThe claim is heard because the bar period is ten years, by analogy with the book-retention period
The book-retention period in the Commercial Books Law has no bearing on the limitation period for claims.
BThe claim is not heard even if the defendant acknowledges the debt
The defendant's acknowledgment of the right allows the claim to be heard despite the lapse of time.
CThe claim is not heard because five years have passed since the right arose, unless the defendant acknowledges it or the plaintiff gives an excuse the court accepts ✓ Correct answer
This is Article 24, and six years have passed with no acknowledgment or excuse.
DThe claim is heard because the bar applies only to claims above SAR 100,000
The five-year bar does not depend on the value of the claim.
Reference: Commercial Courts Law (Royal Decree No. M/93, 1441 AH), Article 24
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04The court opened a protective settlement procedure and ordered a stay of claims for 90 days from the opening date. The debtor asked for successive extensions of 30 days each. What is the maximum number of such extensions the court may grant?
Practice question Unit: Commercial laws
AOne extension
This is below the limit. After one extension the stay totals 120 days, still under the 180-day cap.
BTwo extensions
After two extensions the stay is 150 days, so the court may still grant a third to reach 180 days.
CThree extensions ✓ Correct answer
Article 18 allows 30-day extensions provided the total stay never exceeds 180 days. After the first 90 days, 90 days remain, which means three extensions.
DSix extensions
Six extensions would bring the stay to 270 days, exceeding the 180-day maximum.
Reference: Bankruptcy Law (Royal Decree No. M/50, 1439 AH), Article 18
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05Three partners hold a general partnership: Ahmed (50% of capital), Badr (30%) and Salman (20%). The articles set no different profit and loss ratios. Ahmed paid a company debt of SAR 600,000 from his own funds after it was properly established. How much can he recover from each of Badr and Salman?
Practice question Unit: Commercial laws
ASAR 200,000 from each
An equal split ignores that losses follow capital ratios unless otherwise agreed.
BSAR 180,000 from Badr and SAR 120,000 from Salman ✓ Correct answer
Losses are shared by capital ratio: Badr bears 30% of 600,000, i.e. 180,000, Salman 20%, i.e. 120,000, and Ahmed bears the remaining 300,000.
CSAR 360,000 from Badr and SAR 240,000 from Salman
This charges the other two the whole debt at 60% and 40%, as if Ahmed bore no share of his own, although he bears 50%.
DSAR 120,000 from Badr and SAR 180,000 from Salman
This inverts the ratios, charging the smaller holder more than the larger holder.
Reference: Companies Law (Royal Decree No. M/132, 1443 AH), Article 48, paragraph 2
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06Omar accepted a bill that Fahd drew on him as the price of goods Fahd never delivered. Fahd then endorsed it to Nasser, who took it in good faith without intending to harm Omar. At maturity Nasser demands payment. Can Omar refuse by pointing to the non-delivery of the goods?
Practice question Unit: Commercial laws
AYes, he may raise against the holder any defence he has against the drawer for non-delivery
This defence rests on his personal relationship with the drawer and cannot be raised against a good-faith holder.
BYes, but only up to the value of the goods the drawer failed to deliver
There is no partial reduction; the defence either can be raised against the holder or cannot, and here it cannot.
CNo, his defences from dealings with the drawer do not reach the holder ✓ Correct answer
Nasser did not intend to harm Omar, so defences from Omar's relationship with Fahd are not available against him.
DNo, because acceptance forfeits every defence even where the holder acted in bad faith
Acceptance does not forfeit all defences; they can be raised against a holder who, when acquiring the bill, intended to harm the debtor.
Reference: Commercial Papers Law (Royal Decree No. 37, 1383 AH), Article 17
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07Sultan was convicted of money laundering and had previously been convicted by a court in a foreign country. Which penalty range applies to him under the Anti-Money Laundering Law?
Practice question Unit: Laws related to the profession
AImprisonment from 3 to 15 years, or a fine of up to 7 million riyals, or both ✓ Correct answer
Correct: a previous domestic or foreign conviction is an aggravating circumstance, and the penalty is 3 to 15 years' imprisonment or a fine of up to 7 million riyals, or both.
BImprisonment from 2 to 10 years, or a fine of up to 5 million riyals, or both
This is the basic range; it rises when an aggravating circumstance is present, including a previous domestic or foreign conviction of the offender.
CImprisonment from 1 to 7 years, or a fine of up to 3 million riyals, or both
This is the reduced range available to someone who volunteers information that helps the authorities; it has nothing to do with the offender's prior record.
DImprisonment from 5 to 15 years, or a fine of up to 10 million riyals, or both
The law contains no such range; the fine ceiling in aggravated cases is 7 million riyals.
Reference: Anti-Money Laundering Law (Royal Decree No. M/20, 1439 AH), Article 27
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08An arbitration began when the respondent received the request for arbitration on 1 March 2026. The parties did not agree on a period for the award or on any extension. Under the Arbitration Law, what is the latest date by which the tribunal may issue the award ending the whole dispute, after using its power to extend the period, without either party applying to the court?
Practice question Unit: Laws related to the profession
A1 March 2027
This date reflects only the original twelve months and ignores the up to six months the tribunal may add.
B1 March 2028
Twenty-four months exceeds what the tribunal can set on its own; a longer period would require the parties' agreement.
C1 September 2026
Six months is shorter than the default period; the Law does not set a shorter one when there is no agreement.
D1 September 2027 ✓ Correct answer
Absent agreement the period is twelve months from the start of proceedings, and the tribunal may add up to six months, giving eighteen months in total, i.e. 1 September 2027.
Reference: Arbitration Law (Royal Decree No. M/34, 1433 AH), Article 26 and Article 40, paragraphs 1 and 2
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09A certified accountant obtained his licence in March 2022 and in October 2026 is offered the audit of a joint-stock company. What is the ruling on accepting it under the profession law?
Practice question Unit: Accounting and Auditing Profession Law
APermitted, because he has held his licence for more than three years
Three years is not the period the Law uses.
BNever permitted for any certified accountant to audit joint-stock companies
The prohibition is temporary, for five years from licensing, not absolute.
CNot permitted, as five years have not passed since licensing ✓ Correct answer
Auditing joint-stock companies and banks is prohibited before five years from licensing, and only about four years and seven months have passed.
DPermitted provided he notifies the Organization one month before accepting
The Law has no notice requirement that permits the audit before the period ends.
Reference: Accounting and Auditing Profession Law (Royal Decree No. M/59, 1442 AH), Article 8, paragraph 4
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10An individual auditor audited an unlisted company for ten consecutive fiscal years ending with fiscal year 2024, then stopped for one fiscal year (2025). The company wants to reappoint him for fiscal year 2026. What is the position under the implementing regulations?
Practice question Unit: Accounting and Auditing Profession Law
AAllowed, because a full fiscal year of interruption restarts the count of the maximum period from the start of the next year
A gap shorter than two fiscal years does not restart the count; the maximum for an individual auditor is ten consecutive fiscal years.
BAllowed for one fiscal year only, being what remains of the maximum period set for him
Someone who stops for less than two fiscal years may be reappointed only for the remaining period, and this auditor has used the whole period, so nothing remains.
CAllowed if the audit committee recommends his reappointment and the general assembly approves it
The audit committee's recommendation relates to reappointing an audit firm after its period, and is not an exception for an individual auditor.
DNot allowed: after exhausting the maximum period he may be reappointed only once two fiscal years have passed since his work ended ✓ Correct answer
The regulations allow reappointing someone who has exhausted the maximum periods after two fiscal years from the end of his work, and the gap here is only one year.
Reference: Implementing Regulations of the Companies Law (Ministry of Commerce, 2023), Article 6, paragraphs (a), (c) and (d)
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