Explanation of Article 368
The article clarified that a gift contract is not one of the consensual contracts that can be concluded merely by the exchange of offer and acceptance. Instead, it requires an additional formal or tangible condition, and official documentation serves as a substitute for delivery. The wisdom behind this is to protect the donor due to its seriousness; as they are giving away their property without compensation, they need to reflect and deliberate on what they are giving away.
The first paragraph decided that if the gift is real estate, the gift does not conclude except by documenting the contract. The intention is not to prove the contract by any means of proof, but rather to document it according to the statutory texts related to documentation, foremost among them the Documentation System issued by Royal Decree No. M/164 on 19-11-1441 AH. If the gift contract is documented according to the procedures, conditions, and provisions included in the statutory texts, the formal condition is fulfilled, and the contract is considered valid from a formal standpoint, even if the real estate is not delivered physically or constructively. The paragraph considered the documentation of the contract sufficient for its conclusion and serves as a substitute for delivery in this regard.
The documentation deed must include all elements of the gift by specifying the gifted property according to what is stated in the general rules of the contract, specifying the donor and the donee, and any obligations imposed on the donee.
The second paragraph clarified that if the gift is movable, the gift does not conclude except by one of two things: First, documenting the contract according to statutory texts, as in the gift of real estate. Second, the delivery of the gift, which varies according to its nature. It may be by handing over, like a watch or jewelry, depositing the amount in the donee's account, registering securities in their portfolio, handing over bonds of right if the gift is a personal right transferred by the donor to the donee as a donation, or by sorting animals or goods in the presence of the donee and placing them under their control even if not moved. Delivery is achieved in all these cases by the donee themselves or their deputy or agent in delivery or an intermediary for them.
The paragraph did not require delivery and receipt for delivery; if the movable was in the possession of the donee before the gift by lease, loan, deposit, or otherwise, and the gift was completed with the movable remaining in the donee's possession, that suffices for delivery.
It is worth noting that requiring a formal or tangible condition for the conclusion of a gift does not dispense with the need for the contract's pillars and substantive conditions, as stated in the general rules. The formal or tangible condition for the gift applies only to direct gifts where ownership is transferred from the donor to the donee. However, if the donee acquires a real or personal right without compensation through the donor but without ownership transfer from the donor to the donee, documentation or delivery is not required. Examples of this include:
- Debt forgiveness as contained in Article (370).
- Stipulation for the benefit of a third party as contained in Article (101).
- Acceptance by the transferee of a debt transfer without compensation as contained in Article (249).
These actions are considered donations in terms of substantive rules, such as requiring the capacity to donate, non-guarantee of entitlement and defect, and are considered donations in claims of non-enforceability of the action against creditors, as well as against heirs in the disposition of a terminally ill patient, and other rules. As for formal and tangible conditions, these actions are considered indirect gifts that do not involve the transfer of a real or personal right from the donor to the donee, and thus the system did not impose a formal or tangible condition on them.
Related To
Article 368
1. f the gift is a real property, the gift contract shall be deemed concluded only if it is notarized in accordance with legal provisions.
- If the gift is a movable property, the gift contract shall be deemed concluded only if it is notarized in accordance with legal provisions, or by receipt thereof even without notarization.