EXERCISE OF RIGHTS
Unreasonable exercise of rights is considered unlawful and infringing upon the rights of others. Exercise of rights as prescribed by the law and specifically in the following cases:
1. If the benefit arising from the exercise of rights is unlawful, such as a creditor enforcing his debtor to work in an illegal job to generate money to pay the debt.
2. If it was meant to harm the debtor to (a creditor who got his money from the debtor goes again to the court to issue restriction orders on the debtor).
3. If the benefit to the owner of the right is far less than possible damage incurred on debtor if the right is exercised. (Selling a collateral that far outvalues the debt for a very low price).
4. If the exercising of the rights causes unrealistic damage.


OBLIGATION OF THE CONTRACT
The civil law defines the contract in general terms as "an offer that receives acceptance from another party". Contracts are formulated between two or more persons for the accomplishment of a lawful object or action. For a contract to be legal it must have the following elements:

1-Offer: The offer is an act by which a thing or project is presented to a person for the purpose of entering into contract.

There are cases where the offer requires a certain response not necessarily explicit, in such instances silence, (no - response) is considered a consent.

Consent to an offer is annulled if the offer or the accepting party loses his mental capacity, or dies before making his consent known to the offer or.

Contracting through mail, or telephone, or any similar method is possible if offer and consent are affected during transaction, or within a specified time agreed upon the parties to the contract.

Article 51 of the law dwells on the contract forms (readymade contract forms) where the other party fills in the blanks. These forms of contracts are considered binding by law unless proven that one of the parties did not have the chance to review the contract where major stipulate are unacceptable. But if the clauses of the contract are insignificant then the judge will resort to common sense, justice and customary practices.

The parties to the contract can postpone certain insignificant elements of the contract to be formulated later on, and this action does not abrogate the contract. In case of disagreement and the case ends up in court, then the judge has the right to decide in accordance with customary practice and what he believes to be just.

2-Acceptance: Acceptance is an act of free will expressed verbally, or in written form or with an explicit sign language if one of the parties is unable to talk or write. The expression should be clear without any vagueness that could be interpreted otherwise. This free expression of consent shall be effective after being known by the offering party. Vagueness in expressing real intent of a party to a contract is a source of possible conflict which may or may not be hard to prove in a court of law.

3-Contracts representation: Contracts can be affected through legal representation; that is, one person can authorize another person to act on his behalf, unless the law requires that a person himself must agree to the contract. Legal representation is binding for the principal (The person who authorizes someone to act on his behalf ) within the legal limits of conduct stipulated in the authorizing document.

4-Mental competence: Any person who reaches the age of 21 is considered capable of signing contracts and conducting his life, unless the law prescribes otherwise. The law considers mentally deficient persons of different kinds like: an insane person, a madman, a child, a minor, a careless spendthrift, as mentally incompetent to conclude and sign a contract.

The judicial assistant and the guardian must submit statements of account showing details of expenses and other transactions. Only the parents are not asked by the court for handling the money of their minors unless they commit grave and costly mistakes.

A child of seven years is considered able to distinguish between what is good and what is bad. His appointed guardian must handle his monies carefully and manage them for his benefit only, however a court ruling is needed to get guardianship over a child.

A person eighteen years of age can get a court ruling allowing him to run certain aspects of his life, in other words he can get permission to conclude certain contracts.

If a mentally incompetent person signs a contract of whatever kind, this contract can be legally annulled, but if he, with malicious intent, enters into a contract with somebody, then his mental incompetence will not be taken into consideration by the court and the contract he signs will be considered effective. In this case the mentally incompetent is supposed to compensate the other party for whatever damage he might have caused.


SUBJECT MATTER OF CONTRACTS
Contract should have a reasonable, realistic subject matter, and should be humanly possible to execute. Contracting for future performance is possible if the subject matter is real and does not depend on chance, and is not related to what a man leaves after his death except what the law allows.

The subject matter of the contract should be stated clearly without ambiguities, otherwise the contract will be considered void. If the subject matter of the contract is a certain thing, its specifications must be stated clearly, and if stated with ambiguities, then the party responsible to provide the thing with average specifications.

Any contract regarding an unlawful subject matter and contrary to the public order is considered null and void. If the contract is to pay a certain amount of money, then the number of the amount is what counts and not the value.

Any monies, the subject of debt, must be paid in Kuwaiti Dinars, but the law allows agreement to be fulfilled in foreign currency if stipulated in the contract.

Terms of the contract should not contradict the public order. If any condition or term in a certain contract is found counter to public order, then this term or condition shall be annulled and the rest of the contract will be upheld.

Disproving an illusory contract requires proof that the illusory contract hides behind it a real contract whose object or intent differs from the illusory one. If contestation erupts between contractual parties and a concerned third party about which contract should be upheld, those who uphold the illusory contract, without their knowing about it being illusory, will be favored.

A contract binds it signatories (the parties) only, yet the effect of the contract extends to the particular successors and universal successors of the indebted party. If the debt results from performing the contract, and the indebted party passes away, his debt should be settled from what monies and properties he leaves behind.

ABROGATION OF CONTRACTS
Voidable contracts: A voidable contract is considered legal till one of the parties demands its annulment based on the illegal elements found in it. When contracts are deemed void, the positions of the parties go back to the initial stage prior to entering into contract.

The right to annul or abrogate the contract is legally upheld for three years from the date the clause for abrogation is discovered or has disappeared. The following cases clarify this point further:

1. A contract with a minor or mentally incompetent person can be annulled within three yearsfrom the date the minor reaches legal age or the mentally incompetent gains mental capacity.
2. If malicious cheating was the reason behind annulment, the annulment can be legally effected within three years from the discovery of malicious cheating.
3. If a contract is enforced on a party the annulment of this contract can be effected within three years from the day enforcing is terminated.

As a general rule fifteen years is the prescription period within which the unknowing affected party to a defective contract can file a case to abrogate the contract. Defects in a contract may not be discovered for several years from date of entering into it, but once discovered the affected party has three years during which he can file for abrogation of contract, or adjustment and redress, and can demand compensation.

Illegal contracts are void by law and cannot be upheld. The court will pass a judgment about their illegality once they come to its attention.

Parties entering into a contract must abide by its terms; if one of the parties does not fulfill his part, while the other is fulfilling his, then the abiding party can notify the delinquent that he intends to abrogate the contract in court and demand compensation (a certain period of time must be given for other party to comply, say one week).

Parties entering into a contract can mutually agree to include a stipulation in the contract that makes the contract null and void if one of them falls short on his commitments without a need to notify before abrogation. This stipulation must be stated clearly without the slightest ambiguity, and with express consent of all parties, but if the clear mutual consent to this stipulation is nonexistent, then a contract can only be abrogated in a court of law, and after a due process of litigation.

In commercial matters it is not necessary to inform breaching party once this stipulation is in the commercial contract. In abrogated contracts the status of parties goes back to pre-contract stage and compensation to the wronged party is enforced by law.

Any particular successor to the parties of the contract who benefits in good will from the contract before it is abrogated, is not affected by a void contract. Unilateral contracts are dissolved and considered null and void when a force majeure intervenes to make fulfillment of contract impossible but if some of the commitments can still be executed, then the obligated party must fulfill them.

EFFECTS OF ABROGATED CONTRACT
If the contract is abrogated for certain legal reasons, the wronged party must be compensated by the other party that benefited from the contract, either monetarily or in kind; if the benefiting party was mentally incompetent, then the compensation he is liable for is equivalent to the benefit resulting from the contract of their principals taken legitimately and in good faith.


EFFECTS OF OBLIGATION
A debtor must pay his debt when due; if he does not pay, he may be forced by law to pay. If the debt is a material object of a kind, and clearing the debt can cause harm and loss to the debtor, then the debtor can ask judge to allow him to pay a reasonable compensation for that object.


DEBT SETTLEMENT DELAY COMPENSATION
If a debtor fails to pay his debt on time, he is liable to compensate the creditor for damage incurred due to delay in settlement of debt; except in cases where the debtor can prove at court that not paying in time was beyond his capacity and will.

When a creditor and his debtor contribute some error that makes the debtor unable to pay in time, then both parties bear responsibility for the delay and compensation to creditor will be lessened in proportion to the error.

An article in the civil law allows an agreement between parties that holds the debtor liable to pay his debt even in circumstances of force majeure, or a sudden debilitating accident. It is also contractually possible to agree otherwise, provided the debtor has not cheated, or defrauded his creditor, or committed a grave error affecting the creditor.

If the debtor is a company of a sort, or person who utilizes the services of employees to fulfill his obligations, then it is possible to relieve him of liability due to fraud or grave error committed by his employees.

In civil law, the debt is due to the creditor after the creditor officially notifies the debtor that the debt is due to such a date unless the law states otherwise.

Not paying back the debt in time may cause damage to the creditor; if this happens without the creditor being able to evade the damage, then the creditor has the right to claim compensation in addition to his debt (damage can be material loss or loss of chance of benefit), in such a case the burden of proof of damage falls on the shoulder of creditor.

If the debtor proves that the creditor did not bear any losses whatsoever, then he is relieved from compensation beyond the nominal debt.

The creditor cannot be compensated more than the sum agreed upon in the contract, even if the damage and harm done to him exceed that. In case the debtor resorted to fraud and cheating, the judge's ruling may exceed the limit of compensation stated in the contract.

An agreement that has specified conditional terms cannot be effective till the conditions are met, though it is rightful for the creditor to take precautionary steps to secure his debt (temporary procedures to secure his rights).

Obligations that are tied up with a future date (term obligations) can be acted upon only on or after the date is due; but the creditor has the right to resort to temporary protective measures like demanding bank guarantee, or a well-to- do guarantor, or any other security, if he feels that the debtor might declare bankruptcy or develop inability to pay

A debt becomes due upon the death of debtor regardless of payment date. But the inheritors can offer a guarantee or some kind of security to stop any legal action on the monies of the deceased debtor.

Sometimes it happens that a debtor will affirm to his creditor that he will pay the debt when able to do so; this is decided in court as a reasonable time depending on the financial status of debtor.

(Several persons that share the burden of a certain debt).

The creditor has the right to claim his dues from any one of the joint debtors. If one of the joint debtors pays the debt, then all the joint debtors are cleared of the debt. Also if one of the joint debtors transfers the debt by agreement with an able well to do person, then this transfer will relieve all the joint debtors if they accept the transfer of debt. If a debt is renewed with new conditions, by one of the debtors with the creditor, then this act relieves the other debtors from the burden of debt unless the creditor insists on his rights against the rest of debtors and reserves his rights to claim the debt to them. A creditor has the right to relieve any one of the joint debtors from the debt, or his share of it, and claim the rest of the money from the others; but the rest of the debtors can demand from the relieved debtor that he pay his share in the debt.

If one of the joint debtors pays the debt, or part of it, he can claim what he paid from the rest of the joint debtors in accordance with their shares in the debt. In case there is no agreement between the joint debtors to allot their respective shares of the debt, then the law considers their shares in the debt to be equal. If one of the joint debtors has the sole benefit from the borrowed money, then he himself bears the responsibility to pay back the joint debtor who pays the debt first.

Any court ruling against one of the joint debtors will not effect the rest of joint debtors; and any benefit that one of the debtors can get will be legally considered as benefit to the other joint debtors and they can use it in the court, if the need arises. And any detriment caused by one of the joint debtors will not affect the rest of the joint debtors unless they explicitly accept it.

An obligation is indivisible If:

The law defines transfer of debt as a transaction through which a debt is transferred from a debtor to a third party who effectually becomes the debtor willing to pay the debt.

An agreement of transfer of debt comprises at least three: the debtor, the creditor, and a third party.

It is necessary that the creditor accepts the transfer of debt, otherwise the transfer of debt is considered null. Notifying the creditor of a transfer of debt must be done by a court clerk.

Once the legal document of transfer of debt to a third party is done, the debtor is relieved completely from the burden of debt towards the creditor. As a consequence the third party becomes a new creditor to the relieved debtor, at the same time he will be responsible to pay the debt to original creditor of the relieved debtor. In this situation the third party will have the right to claim what he pays to the original creditor of the relieved debtor unless the creditor specifies in the agreement with the debtor and the third party that if the third party defaults for whatever reason, he can still execute on the original debtor. In this agreement of transfer of debt the creditor can put down any reasonable conditions to secure his money. The third party as well can demand from the debtor to keep attached securities to debt as creditor, or ask for other guarantees from the debtor to secure the debt.

It is must that the creditor accepts the transfer agreement, otherwise it does not hold. If a third party agrees with a creditor to pay a certain debt on behalf of a certain debtor, this debtor must be informed of the act in order for the money paid by the third party to be reclaimable from the debtor.

In several instances, the third party that pays the debt assumes the position of a new creditor to debtor, which are as follows:

1. If the payer of the debt is jointly indebted with the debtor, or obligated to pay on his behalf.

2. If the payer of debt is a creditor to the debtor, and pays a different debt incurred on that debtor.

3. If the payer of debt comes to own a thing attached as security to the debt.

For this to happen and be legally binding it must be clearly indicated in a legal document specifying the amount paid on behalf of the debtor and having the same date as the maturity date of the debt.

A debtor can borrow money from a third party to pay his debt, and can demand from the creditor to place the lender as a new creditor to debtor; but this has to be done legally on a dated document showing how the original debt was cleared and the how debt came to be; once the debt is cleared from borrowed money, the creditor must supply a clearing statement to debtor showing how the debt was paid.

A debtor must pay the debt to a creditor, or his legal representative, and not to others who might assume the position of creditor.

Sometimes it is necessary to pay a debt through official means, like presenting the money to the creditor after officially notifying him, and depositing the money in the execution department of the court; or just depositing the money in the execution department in the name of the creditor without the need to notify him. This process takes place in the following cases:

1. If the creditor is not known to debtor.

2. If the creditor was mentally incompetent and without a guardian.

3. If the debt was under contestation among several persons.

4. If it was difficult to present the money to the creditor.

If the money to pay the debt was offered to the creditor through a legal process and was eventually deposited in the execution department, and the creditor refused to collect the money, then the debtor can withdraw his money; but if the debtor withdrew his offer after the creditor accepted it, and the creditor did not object to this withdrawal, then the creditor will lose any guarantees or securities attached to the debt.

Statute of limitations

(This means the legal period of time after which any claim of rights in the courts will be rejected upon request by defendant)

In matters civil and commercial the civil law specifies a certain period of time that ranges from one year to fifteen years, depending on the type of case after which one cannot claim a right in the court on the grounds of passing of time.

The statute of limitations is 15 years unless there exists an explicit stipulation otherwise, such as:

If the due rights are periodic, that is, should be collected every certain period of time.

The currency is the Kuwaiti Dinar (KD), and there are 1000 Fils to the Dinar. The Dinar is freely convertible. The rates are quoted daily in the local newspapers and are available from some of the banks over an automated telephone answering system.