Within the framework of contractual relationships governed by the Civil Code, contracts are generally concluded upon the mere meeting of the parties’ wills, without the need for any particular form, since consent constitutes the fundamental basis upon which contractual relationships are established. However, the legislator may intervene in certain transactions by imposing a specific form for their validity, in order to achieve considerations relating to the protection of contracting parties, third parties, and the stability of legal transactions.
In this regard, Article (91) of the Civil Code provides that: “No particular form shall be required for the conclusion of a contract unless the law provides otherwise.” Accordingly, where the law imposes a specific form for the validity of a contract and such form is not complied with, the contract shall be deemed void. This reflects the principle that consensuality constitutes the general rule in contracts, while formality remains an exception imposed by law in certain legal transactions.
The legal issue arises, however, in determining the extent to which formal requirements are intended to preserve transactional stability and protect public interest, or whether excessive adherence to formalities may unduly restrict the parties’ freedom of contract despite the existence of mutual consent.
Formality in contracts refers to situations where the law requires compliance with a specific form or procedure for the conclusion of a legal act or for the production of its legal effects, such as written form, notarization, registration, or official recording. In such cases, the mere concurrence of the parties’ wills is insufficient; rather, the legislator requires fulfillment of the legally prescribed form.
In this context, the imposition of formalities in certain contracts is not merely intended to regulate contractual procedures. Rather, the legislator seeks through such requirements to achieve broader objectives, including protecting contracting parties and third parties, ensuring the stability of transactions, and promoting seriousness and clarity in legal dealings.
Formal requirements may take various forms, including writing, notarization, registration, or recordation, depending on the nature of the legal act and the legislative purpose underlying such requirement. In some transactions, written form is sufficient merely for evidentiary purposes, whereas in others, notarization or registration constitutes an essential requirement for the formation of the legal act itself or for the creation of the legal right arising therefrom.
Within this framework, the legislator has imposed mandatory formalities in certain contractual relationships, as is the case with company contracts. Article (6) of the Commercial Companies Law requires that the company’s memorandum of association, as well as any amendments thereto, be made in writing in Arabic and duly notarized, failing which the contract or amendment shall be void. This reflects the legislator’s strict approach in transactions requiring a higher degree of protection and legal certainty.
The Court of Cassation has consistently affirmed this principle. In its judgment rendered in Appeal No. 352 of 2016 (session of 7 February 2017), the Court held that statutory formalities imposed by law in certain transactions are matters of public order, and that failure to comply with the legally prescribed form results in the nullity and non-existence of the legal act, thereby preventing it from producing any legal effect.
The legal consequences arising from non-compliance with formal requirements vary depending on the nature of the transaction and the governing legal provision. Such non-compliance may result in the nullity of the contract, its non-existence, or the failure of the legal right itself to arise.
In this regard, Article (163) of the Civil Code provides that a void contract produces no legal effect, and that any interested party may invoke its nullity. The court may also declare such nullity on its own motion, reflecting the close connection between certain forms of formal requirements and public order.
The Court of Cassation has reaffirmed this approach, holding that formalities imposed by law in certain contracts relate to public order, and that failure to comply therewith results in the non-existence of the legal act and the absence of any legal consequences arising therefrom, even where mutual consent between the parties has been established. This is because the legislator, by imposing such formalities, seeks to safeguard public interest and ensure transactional stability.
This principle is particularly evident in transactions relating to companies. The Court of Cassation has considered official formality to be an essential formal requirement for the validity of certain transactions concerning limited liability companies. Accordingly, the transfer of shares not executed through an official instrument in accordance with the legally prescribed procedures is deemed absolutely void for reasons relating to public order, and therefore incapable of producing any legal effect.
Similarly, the consequences of failing to comply with formalities differ according to the nature of the legal act, particularly in real estate transactions. The Real Estate Registration Law requires the registration or recording of transactions relating to real rights in immovable property, and provides that failure to register or record such transactions results in the non-existence or non-transfer of the right and prevents the transaction from producing any legal effect, whether between the parties themselves or vis-à-vis third parties.
It follows from the foregoing that, in certain transactions, formal requirements are not limited to regulating evidentiary mechanisms, but rather constitute an essential condition for the formation of the legal act itself or for the creation of the legal right. This reflects the legislator’s tendency to prioritize considerations of legal stability and protection of third parties over the mere existence of mutual consent between contracting parties.
This approach further demonstrates the legislator’s effort to strike a balance between the principle of party autonomy on the one hand, and the requirements of public order and transactional stability on the other, thereby ensuring clarity in legal dealings and safeguarding the legal positions of both contracting parties and third parties.
Accordingly, it is evident that formal requirements in certain contracts are no longer merely procedural rules, but have, in some transactions, become essential elements whose absence results in nullity or the non-existence of the legal right itself. This reflects the legislator’s approach toward balancing respect for the parties’ autonomy with the protection of transactional stability and public interest, in a manner that ensures legal certainty and the stability of legal relationships.