The Hierarchy of Governing Rules in Egyptian Commercial Law
Article 5 of Egypt's Commercial Code establishes the order of priority for resolving commercial disputes and interpreting commercial obligations:
- Party agreement — What the contract says comes first. Egyptian commercial law respects freedom of contract.
- The Commercial Code and other commercial laws — If the contract is silent on an issue, the Code applies.
- Commercial custom and usage — Established trade practices fill gaps where the Code does not address an issue.
- Principles of civil law — Only as a last resort, if none of the above provides an answer.
Practical advice for expats: Always use written contracts when doing business in Egypt, and be as specific as possible about the governing rules, dispute resolution mechanisms, and obligations of each party. A well-drafted contract is your first line of legal protection.
When Does Commercial Law Apply vs. Civil Law?
Purely Commercial Transactions
When both parties to a contract are traders and the transaction concerns commercial matters, Egyptian commercial law applies fully to both parties' obligations.
Mixed Contracts: One Commercial Party, One Non-Commercial Party
Article 6 addresses a situation many expats encounter — entering a contract with an Egyptian company or merchant when you yourself are not a trader:
- Commercial law applies only to the trader's obligations
- Civil law governs your obligations as the non-trader party, unless the law specifically states otherwise
Example: If you, as an expat individual, hire an Egyptian logistics company, the company's performance obligations are judged under commercial law, while your payment obligations may be assessed under civil law. This distinction can affect timelines, remedies, and enforcement.
What Activities Trigger Commercial Law Coverage?
Commercial law applies broadly. Under the Code, commercial acts include:
- Buying and reselling goods (Article 7)
- Professional supply of goods and services (Article 8)
- Manufacturing, industrial activities (Article 8)
- Transport services — land, inland waterways (Article 8)
- Commercial agency and brokerage (Article 8)
- Banking, finance, and insurance (Article 8)
- Maritime and aerial navigation activities (Article 9)
- Any act analogous to the above in characteristics and purpose (Article 10)
Article 11 adds an important presumption: any act carried out by a trader is presumed to be commercial unless proven otherwise. This means that once you have trader status in Egypt, almost everything you do in a business context falls under commercial law.
Activities Excluded from Commercial Law
Not all economic activity is governed by the Commercial Code. Key exclusions:
- Agricultural sales: A farmer selling their own produce is not performing a commercial act (Article 12)
- Small craftsmen: Those engaged in small-scale crafts for basic livelihood are excluded (Article 19)
- State and public bodies: The Egyptian government and public legal persons do not have trader status, though commercial law still governs their commercial activities (Article 23)
The Role of Commercial Custom and Usage
Egyptian commercial law gives significant weight to established trade practices. When neither the contract nor the Commercial Code addresses a specific issue, courts look to what is customary in the relevant trade or industry.
Practical advice for expats:
- Be aware that local trade customs may fill contractual gaps in ways you might not expect
- If your business operates in a specialized sector (construction, shipping, finance), research prevailing commercial customs in that sector
- When drafting contracts, explicitly address areas where local custom might otherwise apply if you want a different outcome
Government and Public Entities as Business Partners
Expats sometimes contract with Egyptian government agencies or public corporations. Article 23 clarifies:
- The State does not have trader status
- However, commercial law applies to any commercial activities the State undertakes, unless a special law says otherwise
This means dealings with state-owned enterprises or public authorities in a commercial context are still governed by commercial law principles — an important distinction for contracts, dispute resolution, and enforcement.
Practical Guidance for Expats Entering Business Transactions in Egypt
- Always use written contracts with clear terms covering obligations, payment, delivery, and dispute resolution
- Specify the governing law in your contracts where possible, particularly in cross-border transactions
- Understand your trader status: Once you qualify as a trader in Egypt, commercial law presumptions apply broadly to your activities
- Seek Egyptian legal counsel before signing significant commercial agreements — the interplay between commercial and civil law can have real consequences for your remedies and obligations
- Document everything: Given the role of commercial books and correspondence in Egyptian commercial disputes, maintaining thorough records is both a legal obligation and a practical safeguard
- Do not assume that practices common in your home country align with Egyptian commercial customs or legal requirements