The laws that govern the drafting and interpretation of commercial contracts in the Kingdom of Bahrain are Bahrain Decree-Law No. 19/2001 on the Issuance of the Civil Law and Bahrain Decree-Law No. 7/1987 on the Issuance of the Law of Commerce and its amendments.

A commercial contract is a legally binding agreement that imposes duties and obligations on individuals to perform or refrain from performing certain acts. Article 2 of Bahrain Decree-Law No. 7/1987 stipulates that commercial arrangements will be subject to the terms mutually agreed between the parties to a contract, subject to the mandatory provisions of the laws of the Kingdom of Bahrain. Although commercial transactions are governed by the contractual terms of the agreement entered into, these terms should not contravene the provisions of any law, otherwise, they may not stand before the Courts of Bahrain (the Court).