Commercial Contracts 2025
Algeria
Author
Sayah Law Firm and its corporate and major projects department stand out as the most dynamic and deal-driven practice in Algeria, consistently advising on the country’s most high-profile transactions and investments. Led by Samir Sayah, the department combines deep local expertise with an international-standard approach, positioning itself as the go-to legal team for complex, cross-border deals in Algeria. The department navigates the complexities of the Algerian market while ensuring that clients benefit from global best practices in corporate law and transaction structuring. The team operates at the forefront of M&A, foreign direct investments, joint ventures and large-scale infrastructure projects, providing strategic and commercially sound advice to multinational corporations, investors and financial institutions. With a deep understanding of local regulatory dynamics, a strong deal-making track record, and an international approach to corporate transactions, Sayah Law Firm is a market leader in Algeria, and provides clients with the confidence and strategic guidance needed to successfully navigate one of North Africa’s most intricate business environments.
1. General Overview of Regulatory Field
1.1 Applicable Law
The principle of freedom of contract is recognised under Algerian law, and allows parties to determine the content and applicable law of their agreement, subject to public policy. In international commercial contracts, Algerian courts generally respect the parties’ choice of law, in accordance with the principles of private international law.
However, when the parties have not expressly chosen a governing law, Algerian courts will determine the applicable law based on the “closest connection” test – usually, the law of the place of performance or the law of the habitual residence or principal establishment of the party assuming the characteristic obligations (for example, the seller in a sales contract or the service provider in a service contract).
Even where a foreign law is chosen, Algerian public order and mandatory rules (ordre public) prevail and may override conflicting provisions of foreign law.
1.2 Form
Algerian law does not impose a general requirement for a specific form in commercial contracts. The principle of consensualism applies: a contract is valid once mutual consent is exchanged, regardless of whether it is oral or written.
However, written form is strongly recommended for evidentiary purposes and is required for certain contracts (for instance, commercial leases, transfers of intellectual property rights, or share transfers). Under the Algerian Civil Code, contracts involving immovable property or those exceeding a certain value must be in writing and registered with the tax authorities to be enforceable against third parties.
1.3 Application of Local Legislation to Commercial Contracts
Commercial contracts in Algeria are primarily governed by the Civil Code (Articles 54–417) and the Commercial Code (Ordinance No 75-59, as amended). Depending on the nature of the contract, sector-specific laws may also apply.
Algeria is not a party to the United Nations Convention on Contracts for the International Sale of Goods (CISG). Consequently, sales contracts are governed by domestic law provisions under the Civil Code and Commercial Code.
Key differences include:
- form – Algerian law requires written evidence for certain contracts, while the CISG allows oral contracts;
- risk transfer – under Algerian law, risk transfers upon delivery, unless agreed otherwise, while under the CISG it depends on shipment terms; and
- implied warranties – Algerian law imposes broader implied obligations on the seller, including warranty against latent defects and conformity to the intended use.
1.4 Mandatory Rules for Specific Contracts
Certain types of contracts in Algeria are subject to mandatory statutory rules that cannot be waived by agreement, such as franchise and distribution agreements, employment-related commercial contracts and consumer contracts.
1.5 Significant Court Decisions or Legal Developments
Over the past three years, Algeria has focused on modernising its commercial and investment framework to attract foreign investors and strengthen legal certainty.
In the past 12 months, the most notable trend has been the increased emphasis on contract compliance and transparency. Authorities are also reinforcing anti-money laundering (AML) due diligence and know-your-customer (KYC) requirements in commercial transactions involving foreign parties. The government is working towards harmonising local commercial practice with international standards while maintaining strong protection for national economic interests.
2. Choice of Applicable Law and Jurisdiction
2.1 Choice of Law
If no governing law is specified, Algerian courts apply the law most closely connected to the contract, typically determined by the place of performance or the domicile of the party bearing the characteristic obligation. For contracts executed in Algeria or substantially performed within its territory, Algerian law will usually apply.
2.2 Overriding Local Laws
Even when a foreign law is selected, Algerian courts may apply mandatory local provisions to protect national interests or ensure compliance with public policy.
2.3 Choice of Jurisdiction
Parties may choose a foreign jurisdiction for dispute resolution in an international commercial contract, provided the matter is not reserved to Algerian courts by exclusive competence (eg, real estate, public procurement, or administrative contracts). Algerian courts generally uphold jurisdiction clauses favouring foreign courts in commercial relationships with a sufficient international element.
If both contracting parties are domiciled or established in Algeria, submission to a foreign jurisdiction is not normally accepted.
2.4 Choice of Arbitration and Overriding Laws
Algerian law expressly allows parties to agree to arbitration, both domestic and international. Algeria is a party to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”), and its courts generally respect Articles II(3) and V(2) thereunder, which require referral to arbitration when a valid agreement exists and set limited grounds for refusing enforcement of foreign awards.
Despite an arbitration agreement, Algerian courts retain the power to apply overriding mandatory rules, especially regarding protection of national distributors or agents, compliance with exchange control or tax obligations, and public order matters such as corruption or competition restrictions.
3. Negotiation and Conclusion
3.1 Necessary Form
Contracts may be concluded orally, in writing or electronically. While oral agreements are valid, written form is recommended for evidence.
3.2 Concept of Culpa in Contrahendo
Algerian law acknowledges pre-contractual liability (culpa in contrahendo) under the general duty of good faith. A party that negotiates in bad faith, abusively breaks off negotiations, or misleads the other party may be held liable for damages covering negotiation costs or losses incurred in reliance on the failed deal.
3.3 Standard Terms and Conditions
Standard terms can be incorporated if the other party has knowledge and acceptance of them at the time of contract formation. This is often achieved by attaching the terms to the contract or explicitly referring to them. Silence alone is not considered acceptance unless established by prior dealings.
3.4 Application of Local Law on Standard Terms
Local contract law applies when standard terms are used in Algeria or in contracts performed within its territory.
3.5 Ineffectiveness of Standard Terms due to Unreasonable Disadvantage
Clauses creating a manifest imbalance or depriving one party of essential rights can be declared void.
3.6 Battle of Forms
In cases of conflicting standard terms, Algerian courts apply the “knock-out rule” – only the non-contradictory terms remain effective, and conflicting clauses are replaced by default provisions of the Civil Code. This approach favours maintaining the contract’s validity rather than nullifying it.
3.7 Signatures and Notarial Deeds
Original signatures are required for property transfers, share sales and guarantees. Certain contracts must be notarised, including real estate transactions, incorporation acts, and pledges over movable assets.
Electronic signatures are legally valid if certified by an accredited authority.
3.8 Official Registration
Registration is mandatory for contracts involving immovable property, intellectual property transfers, and security interests. Registration with the tax authorities or commercial register ensures opposability to third parties and fiscal compliance.
3.9 Further Requirements
Beyond mutual consent, contracts must meet the general validity criteria of capacity, lawful object and lawful cause. Failure to meet these requirements renders the contract void. In practice, companies must also comply with trade registration and fiscal identification rules to ensure enforceability.
4. B2B and B2C Contracts
4.1 Different Laws
Business-to-business (B2B) contracts are mainly governed by the Commercial Code and the Civil Code, offering greater freedom of contract. Business-to-consumer (B2C) contracts fall under Law 04-02 on Consumer Protection and Law 18-05 on Commerce, which impose mandatory rules protecting consumers against unfair terms, misleading advertising and defective goods.
4.2 Consumer Protection Rights
The main consumer protection rights to be obeyed in B2C contracts are:
- the right to clear and transparent information;
- a statutory right of withdrawal in certain sales;
- protection against unfair and abusive clauses;
- warranty of conformity and latent defect liability; and
- access to consumer mediation and judicial remedies.
Suppliers are obliged to label products in Arabic and maintain after-sales service, where applicable.
5. Liability
5.1 Concept of Liability
Liability under Algerian law is based on fault, damage and causation. The liable party must have breached a contractual or legal obligation, causing identifiable harm. Contractual liability requires proof of non-performance, delay or defective performance.
5.2 Punitive Damages and Liability Caps
Punitive damages are not recognised under Algerian law. Damages are compensatory only, covering direct and foreseeable loss, including lost profit if proven. Parties may agree to a liability cap or penalty clause.
5.3 Strict Liability
Strict liability exists in limited areas such as product liability, traffic accidents and environmental harm. In commercial contracts, strict liability may arise where the law imposes an obligation of result (eg, carriers, warehouse keepers).
5.4 Contractual Limitation on Liability
Parties may limit their liability by contract unless prohibited by law or public policy. Clauses excluding liability for gross fault or fraud are invalid. Courts are more lenient towards individually negotiated clauses than towards standard-form clauses, which are subject to stricter fairness control.
6. Force Majeure and Hardship
6.1 Concept of Force Majeure
Algerian law releases a party from liability when performance becomes impossible due to an unforeseeable, irresistible event beyond its control. The affected party must prove causation and absence of fault, and must take reasonable steps to mitigate the impact.
6.2 Force Majeure Clauses
It is common practice to include detailed force majeure clauses specifying qualifying events (eg, war, natural disasters, administrative bans).
Even without such clauses, statutory relief applies under Article 127 of the Civil Code.
6.3 Concept of Hardship
Algerian law recognises hardship under Article 107 of the Civil Code. When unforeseen circumstances make performance excessively onerous, the affected party may request judicial adjustment of obligations to restore equilibrium. The court may reduce or postpone performance, but cannot rewrite the contract entirely.
6.4 Hardship Clauses
Hardship clauses are standard in long-term contracts. They complement statutory provisions by defining the process of renegotiation and the threshold of hardship. Their absence does not deprive the party of statutory protection, but explicit clauses help avoid uncertainty and litigation.
7. Warranties and Remedies
7.1 Warranties and Remedies Under Local Law
The seller or service provider must deliver conforming goods or services and guarantee against latent defects. Remedies include specific performance, price reduction, contract termination and damages for loss suffered.
The buyer must notify of defects within a reasonable time or may risk losing the right to claim.
7.2 Deviation From Warranty and Remedy Provisions by Contract
Parties may contractually adjust warranty terms and remedies, but not to the extent of excluding liability for fraud or hidden defects. In B2C relations, consumer law prohibits limitation or exclusion of statutory warranties. In B2B contracts, such deviations are valid if expressly negotiated and not contrary to public policy.
Sayah Law Firm
4, avenue Larbi Allik
Hydra
Algiers Province
Algeria
+213 770 194 194
samir.sayah@s-sayah.com www.s-sayah.com
Trends and Developments
Author
Sayah Law Firm and its corporate and major projects department stand out as the most dynamic and deal-driven practice in Algeria, consistently advising on the country’s most high-profile transactions and investments. Led by Samir Sayah, the department combines deep local expertise with an international-standard approach, positioning itself as the go-to legal team for complex, cross-border deals in Algeria. The department navigates the complexities of the Algerian market while ensuring that clients benefit from global best practices in corporate law and transaction structuring. The team operates at the forefront of M&A, foreign direct investments, joint ventures and large-scale infrastructure projects, providing strategic and commercially sound advice to multinational corporations, investors and financial institutions. With a deep understanding of local regulatory dynamics, a strong deal-making track record, and an international approach to corporate transactions, Sayah Law Firm is a market leader in Algeria, and provides clients with the confidence and strategic guidance needed to successfully navigate one of North Africa’s most intricate business environments.
Legal Modernisation and Emerging Opportunities for Investment
Renewed legal and economic landscape
Over the past three years, Algeria has undergone a profound transformation of its legal and economic environment, marking a new era in the country’s approach to investment and business regulation. This process of reform is part of a broader national vision to diversify the economy, stimulate innovation and reduce dependency on hydrocarbons, while also ensuring that strategic sectors remain under national control.
The reform movement has been guided by the government’s desire to modernise legal frameworks and align Algerian business law with international standards. This includes revising commercial, investment and financial legislation, as well as modernising the judiciary and administrative processes to make them more efficient and transparent.
At the same time, the Algerian authorities are seeking to improve the country’s image among international investors, who have often perceived the Algerian market as bureaucratically complex and unpredictable. The new legal architecture aims to establish a climate of trust, foster legal predictability, and promote a genuine partnership between the State and private operators.
These efforts are also driven by regional dynamics. Algeria, strategically located at the crossroads of Africa and the Mediterranean, is positioning itself as a key gateway to African markets, particularly in the context of the African Continental Free Trade Area (AfCFTA). To achieve this, it must ensure that its legal and institutional framework supports integration, competitiveness and private initiative.
The 2022 Investment Law
The adoption of Law No 22-18 of 24 July 2022 on investment represented a turning point in Algeria’s economic policy. Replacing the 2016 framework, this new law lays the foundation for a more open, predictable and investor-oriented regime, addressing several longstanding concerns raised by both domestic and foreign investors.
Key objectives
Main objectives include the following:
- encouraging diversification by supporting priority sectors such as manufacturing, renewable energy, tourism and technology;
- enhancing the attractiveness of the Algerian market through greater legal certainty and the reinforcement of guarantees for foreign investors;
- simplifying administrative procedures and strengthening the principle of transparency within public institutions; and
- promoting balanced territorial development, encouraging investments in less developed regions to reduce disparities.
Key features
Some of the most important features include the following:
- elimination of the 51/49 rule for most sectors (except strategic ones related to national sovereignty, such as hydrocarbons, mining and defence), allowing foreign investors to hold majority shares in companies;
- introduction of stability clauses that protect investors from retroactive legislative changes that could affect the economic balance of their projects;
- establishment of a single investment window, managed by the National Investment Agency (ANDI), to centralise procedures and reduce administrative delays; and
- clarified dispute resolution mechanisms, including recourse to international arbitration, reinforcing investor confidence in Algeria’s judicial reliability.
These features aim to restore trust among foreign partners and promote long-term, sustainable investments in key sectors such as energy, infrastructure, tourism and manufacturing.
Furthermore, the 2022 law provides clearer fiscal incentives, including customs and tax exemptions during the investment phase, as well as post-investment support measures for companies that meet job creation and export objectives.
Digitalisation of Commerce and the Legalisation of E-Signatures
Digital transformation lies at the heart of Algeria’s economic reform agenda. The implementation of Law No 15-04 on electronic signatures and certification and Law No 18-05 on electronic commerce has created a comprehensive legal foundation for secure online transactions and digital business activities.
Thanks to these laws, electronic contracts are now fully recognised by Algerian courts, and certified e-signatures hold the same legal force as handwritten signatures. This recognition represents a significant step towards the dematerialisation of administrative procedures and the modernisation of business interactions.
The certification of e-signatures falls under the control of the Ministry of Post and Telecommunications, which accredits certification authorities and ensures compliance with international cybersecurity standards.
These digital reforms have had several tangible effects:
- they reduce bureaucracy and improve business efficiency;
- they facilitate foreign trade, particularly for companies engaging in e-commerce and service outsourcing; and
- they enhance transparency and traceability – key factors in combating fraud and corruption.
In practice, this digital transition also creates new business opportunities in fintech, software development, cybersecurity and digital marketing, making Algeria an increasingly dynamic digital hub in North Africa.
Consumer and Competition Reforms
Algeria’s commitment to legal modernisation is also visible in its consumer protection and competition policies. The government has reinforced the powers of the Competition Council, which now actively monitors anti-competitive practices such as exclusivity agreements, abuse of dominant position, and cartelisation in key markets such as telecommunications, retail and pharmaceuticals.
Law No 04-02 on consumer protection has also been updated to address the new challenges posed by digital trade. Upcoming amendments introduce stricter obligations for online sellers, increased product safety requirements, and enhanced mechanisms for consumer recourse.
For companies operating in Algeria, these reforms mean a need to reassess compliance policies and adapt marketing and distribution strategies. In particular, businesses must ensure that advertising practices, contract terms and after-sales services fully respect consumer rights and data protection rules.
This trend towards stronger market regulation reflects Algeria’s intention to promote fair competition, protect citizens and build a sustainable consumer economy capable of meeting global standards.
Arbitration and Judicial Modernisation
A crucial component of Algeria’s reform agenda is the modernisation of dispute resolution mechanisms, especially arbitration. As a signatory to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) since 1989, Algeria recognises the enforceability of foreign arbitral awards, which is a significant reassurance for foreign investors.
In recent years, Algerian courts have shown a more pro-arbitration stance, respecting the principle of party autonomy and referring cases to arbitration when valid clauses exist. Judicial decisions have become more pragmatic, especially in commercial, construction and investment-related disputes.
Domestic institutions such as the Algerian Chamber of Commerce and Industry (CACI) have also been active in professionalising arbitration, updating their procedural rules and training arbitrators. Plans are under way to establish sector-specific arbitration centres, particularly for energy, infrastructure and public procurement.
In parallel, the Algerian judiciary is gradually embracing digital tools – such as online case management systems and digital court records – which improve procedural efficiency and access to justice.
This judicial modernisation contributes to greater predictability and investor confidence, confirming Algeria’s intention to align its judicial practices with international arbitration standards such as UNCITRAL and ICSID frameworks.
Technology and Start-Ups
The Start-Up Act of 2020 embodies Algeria’s ambition to support innovation and entrepreneurship. It offers a series of tax incentives, simplified incorporation procedures and funding opportunities through the National Start-Up Fund.
Start-ups benefit from exemptions on corporate taxes and VAT during their early years, and can access special financing schemes to support product development and international expansion.
This policy has given rise to a new generation of young, tech-driven entrepreneurs, particularly active in software development, e-commerce, logistics and digital marketing. With more than 2,000 officially labelled start-ups as of 2025, Algeria is gradually building a vibrant tech ecosystem, supported by incubators, innovation hubs and public-private partnerships.
These developments also encourage knowledge transfer and talent retention, addressing the long-standing issue of brain drain by offering young graduates real prospects within the national economy.
Emerging Sectors and Investment Opportunities
The diversification of Algeria’s economy is creating unprecedented opportunities across a variety of industries.
Renewable energy
Algeria’s vast solar potential has attracted growing interest from international developers. Fiscal incentives, simplified licensing and priority access to public tenders have made solar and wind projects increasingly viable.
Tourism and hospitality
The government promotes high-end tourism infrastructure and public-private partnerships to valorise Algeria’s rich natural and cultural heritage. Simplified administrative procedures and investment guarantees support foreign hotel chains and investors.
Agribusiness and pharmaceuticals
These sectors benefit from flexible local content rules, incentives for technology transfer, and protection of intellectual property. Algeria aims to reduce import dependency and become a regional hub for agro-industrial exports.
Digital economy
Start-ups, fintech platforms and outsourcing companies enjoy favourable tax regimes and regulatory support, allowing them to serve both domestic and African markets.
In addition to the foregoing, Algeria’s geostrategic position – close to Europe and connected to sub-Saharan Africa – reinforces its attractiveness as a regional investment platform. Through the AfCFTA, Algerian companies can access a market of over 1.3 billion consumers, benefiting from preferential trade conditions and increased mobility of goods and services.
Towards a More Predictable and Legal Environment
Overall, Algeria’s current trajectory reflects a genuine commitment to legal modernisation, institutional transparency and judicial reliability. While challenges remain – notably administrative inertia, overlapping regulations and occasional delays in implementing decrees – the direction of reform is promising and clear.
The government’s focus on investment facilitation, arbitration modernisation and digitalisation sends a strong signal to investors seeking a stable environment. As secondary regulations are gradually enacted, greater legal clarity will emerge, enhancing the day-to-day predictability of business operations.
In the medium term, the convergence of Algeria’s laws with international norms is expected to strengthen investor confidence, encourage public-private partnerships and stimulate sustainable growth. The country’s evolution from a resource-dependent model to a diversified, innovation-oriented economy marks an important step towards long-term economic resilience and global competitiveness.
Sayah Law Firm
4, avenue Larbi Allik
Hydra,
Algiers Province
Algeria
+213 770 194 194
samir.sayah@s-sayah.com www.s-sayah.com
Law and Practice
Author
Sayah Law Firm and its corporate and major projects department stand out as the most dynamic and deal-driven practice in Algeria, consistently advising on the country’s most high-profile transactions and investments. Led by Samir Sayah, the department combines deep local expertise with an international-standard approach, positioning itself as the go-to legal team for complex, cross-border deals in Algeria. The department navigates the complexities of the Algerian market while ensuring that clients benefit from global best practices in corporate law and transaction structuring. The team operates at the forefront of M&A, foreign direct investments, joint ventures and large-scale infrastructure projects, providing strategic and commercially sound advice to multinational corporations, investors and financial institutions. With a deep understanding of local regulatory dynamics, a strong deal-making track record, and an international approach to corporate transactions, Sayah Law Firm is a market leader in Algeria, and provides clients with the confidence and strategic guidance needed to successfully navigate one of North Africa’s most intricate business environments.
Trends and Developments
Author
Sayah Law Firm and its corporate and major projects department stand out as the most dynamic and deal-driven practice in Algeria, consistently advising on the country’s most high-profile transactions and investments. Led by Samir Sayah, the department combines deep local expertise with an international-standard approach, positioning itself as the go-to legal team for complex, cross-border deals in Algeria. The department navigates the complexities of the Algerian market while ensuring that clients benefit from global best practices in corporate law and transaction structuring. The team operates at the forefront of M&A, foreign direct investments, joint ventures and large-scale infrastructure projects, providing strategic and commercially sound advice to multinational corporations, investors and financial institutions. With a deep understanding of local regulatory dynamics, a strong deal-making track record, and an international approach to corporate transactions, Sayah Law Firm is a market leader in Algeria, and provides clients with the confidence and strategic guidance needed to successfully navigate one of North Africa’s most intricate business environments.
