The Scope of the Pacta Sunt Servanda Principle in Administrative Contracts with Special Reference to Saudi Arabia

Abstract

This study aimed to examine the extent to which the Pacta Sunt Servanda principle applies to administrative contracts. A descriptive methodology was used to investigate the study. Data were sourced from various primary legal materials. The results revealed that administrative contracts are only partially subject to Pacta Sunt Servanda principle. The powers exercised by government agencies during contract execution are not absolute; they are subject to legal restrictions and must respond to the needs of public facilities to achieve the public interest. The contractor adheres to decisions regarding exorbitant clauses, as these are administrative decisions. Overall, the breach of the Pacta Sunt Servanda principle by government agencies in administrative contracts, which involves using exceptional powers not available in private law contracts, highlights the prioritization of public interest over the interests of the contracting party with the government agency. Nevertheless, the contractor's rights were not discarded but preserved by judicial intervention.