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Saudi King’s ‘Wife’ Dispute Reveals Pitfalls of Oral Contracts

The trouble with oral contracts is that disputes arising from them generally hinge on one person’s word against another’s. That was certainly so in one case in which an alleged conversation between a woman and a Saudi Arabian prince in a hotel lobby triggered years of enormously expensive litigation.

The woman claimed to have been the only true wife of the prince’s deceased father, the king, and that the latter had promised that he would maintain her in comfort for life. She alleged that she had met the prince in the lobby and that, during their conversation, he had promised to settle her claim by paying her £12 million and by transferring two valuable properties into her name.

In upholding the woman’s arguments, a judge found, amongst other things, that a binding contract had been completed in the lobby. He rejected the prince’s plea that she had accosted him without warning, that they had spoken together for no more than a minute and that no such agreement had been reached.

Allowing the prince’s challenge to that decision, the Court of Appeal found that the judge had failed to examine the evidence and arguments with the care that the parties were entitled to expect and which a proper resolution of the issues demanded. The deficiencies in the judgment were so serious that it could not be allowed to stand and a retrial was ordered before a different judge.