Explanation of Article 389
The article clarified that the place of performance in a loan contract is the place of the loan. So, if the contract was concluded in Riyadh, and the lender's domicile is in Kuwait, and the borrower's domicile is in Cairo, the place of performance would be in Riyadh. This ruling is merely an application of what is stipulated in Article (277) of the general rules, which states that the place of performance in a contractual obligation, if the subject of the obligation is determined by type and not by identity, is the place where the obligation arose. Determining the place of performance in a loan is not a matter of public order; therefore, it is permissible to agree otherwise, whether by explicit or implicit agreement. An implicit agreement could be that custom dictates performance in a place other than the place of the loan.
Related To
Article 389
The borrower shall repay the loan at the place where the loan was concluded, unless agreed otherwise.