The Contract Is the Law Between the Contracting Parties in Kuwaiti Civil Law

The Kuwaiti legislator has established key principles for civil transactions, especially those related to contractual obligations. One of the most important is the rule that a contract is binding on its parties ("the contract is the law between the contracting parties") under Kuwaiti Civil Law.

In this article, we explain the meaning of this rule and the legal provisions connected to it under Article 196 of the Kuwaiti Civil Code.

Definition of the “Contract Is Binding” Rule in Kuwaiti Civil Law

The meaning of the rule “the contract is binding on the contracting parties” is that each party must adhere to what they agreed upon in the contract’s provisions. Article 196 of the Kuwaiti Civil Code states this principle as follows:

The contract is binding on the contracting parties, and neither party may revoke it or unilaterally amend its terms, except as permitted by the agreement between them or as provided by law.

Key rules related to this legal principle

• Once offer and acceptance meet, both parties are legally bound by the obligations arising from the contract.

• Obligations arising from the contract have a force equivalent to obligations arising from law; this is known as the principle of the contract’s binding force.

• This principle stems from autonomy of will and the respect of covenants and undertakings.

• Islamic Sharia also emphasizes honoring contracts: “O you who believe, fulfill (your) contracts.”

• This principle supports transactional stability; it is not reasonable for a person to escape obligations whenever they wish.

• Once duly concluded, a contract becomes binding and cannot be revoked or amended except by mutual agreement or for reasons specified by law.

• To apply this principle, the contract must satisfy conditions of validity (consent, capacity, subject matter, and cause).

Effects of the “Contract Is Binding” Rule

• Affirming freedom of contract by allowing legally capable persons to conclude contracts and create obligations.

• Freedom also implies the freedom not to contract; once consent is given, the rule becomes effective.

• The rule highlights consent as the core element reflecting true free will.

• This freedom is limited by public order and public morals.

• Parties may set contractual terms and organize obligations in a way that serves mutual interests.

• Parties may also terminate obligations by mutual will.

Why This Principle Applies in Civil Law

This principle is most widely applied to civil transactions. It does not apply to criminal law; contracts must not violate public order, morals, or applicable laws.

It also appears in commercial dealings and employment contracts, but in labor law it is limited by rules protecting the weaker party (the employee).

Exception: exceptional unforeseen circumstances

A key exception arises when exceptional, unforeseen, and general circumstances occur after the contract is concluded, making performance excessively burdensome for the debtor.

• Unforeseen circumstances occurring after the contract is concluded.

• They must be general (e.g., severe price increases, disturbances, earthquakes).

• They must not have been expected by either party.

• They must make performance difficult and excessively burdensome.

If conditions are satisfied, the debtor may raise the matter before the civil judge, who may restore contractual balance by reducing the burdensome obligation or increasing the counter-obligation.

FAQ

What does “the contract is binding” mean?

It means that each party must comply with what they agreed upon once their wills meet through offer and acceptance, except by mutual agreement or as provided by law.

Can Article 196 be overridden?

Yes. The exception for exceptional general circumstances may allow the judge to restore contractual balance when performance becomes excessively burdensome.