Analyzing the Influence of the Good Faith Principle on Commercial Contracts within the Saudi Legal Framework

Abstract

Undoubtedly, the principle of good faith is crucial in both Islamic Sharia and contemporary laws, as well. It paves the way for stable contracts and transactions. Adhering the principle of good faith is obligatory and signifies a sincere pursuit of the contract's objectives. Despite not being explicitly stated, the Saudi legislator has shown interest in this principle, with its provisions scattered throughout various regulations, including the Company Law. This research aims to demonstrate the impact of applying this principle in the Saudi company law. This research adopted the inductive and analytical approaches to analyze the texts in which good faith was mentioned. The findings confirm its significance and elucidate some practical aspects of this impact, such as the company's pillars, its legal personality, the theory of the actual company, and more. The recommendation includes proposing explicit legal provisions that highlight the impact of this principle in related regulations, as well as establishing a clause for it in the commercial transactions section and other relevant regulations, each in its appropriate place.