Construction Agreement Form for Saudi Arabia

Construction Agreement Form Template for Saudi Arabia

A comprehensive legal document governed by Saudi Arabian law that establishes the contractual relationship between the project owner and contractor for construction works. This agreement incorporates local regulatory requirements, including compliance with the Government Tenders and Procurement Law, Saudi Building Code, and Sharia law principles. It details the scope of works, payment terms, timelines, quality standards, and risk allocation while ensuring adherence to Saudi Arabian construction regulations, labor laws, and environmental requirements. The document includes provisions for dispute resolution through Saudi courts or arbitration centers and accommodates both public and private sector construction projects.

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What is a Construction Agreement Form?

The Construction Agreement Form serves as a foundational document for construction projects in Saudi Arabia, designed to meet the specific requirements of the Saudi legal system while incorporating international best practices. This agreement is essential for both public and private sector projects, providing a comprehensive framework for managing construction relationships, risks, and obligations. The document is structured to comply with Saudi Arabian laws, including the Government Tenders and Procurement Law, Saudi Building Code, and Sharia principles, making it suitable for use in all types of construction projects within the Kingdom. The Construction Agreement Form includes detailed provisions for scope of works, payment mechanisms, project timelines, quality standards, and dispute resolution procedures, while incorporating necessary local content requirements and regulatory compliance measures. It is particularly valuable for projects requiring strict adherence to Saudi Arabian construction regulations, labor laws, and environmental standards.

What sections should be included in a Construction Agreement Form?

1. Parties: Identification of the contracting parties including full legal names, commercial registration numbers, and authorized representatives

2. Background: Context of the agreement including project overview and basis for the construction contract

3. Definitions: Detailed definitions of technical and legal terms used throughout the agreement

4. Scope of Works: Detailed description of the construction works to be performed, including general and specific obligations

5. Contract Price and Payment Terms: Agreed price, payment schedule, advance payments, retention amounts, and final payment conditions

6. Project Timeline: Commencement date, completion date, key milestones, and provisions for extensions of time

7. Contractor Obligations: Specific responsibilities including labor, materials, equipment, quality standards, and compliance requirements

8. Employer Obligations: Client responsibilities including site access, permits, approvals, and provision of necessary information

9. Quality and Standards: Required quality standards, testing procedures, and acceptance criteria

10. Variations: Procedures for handling changes to scope, price adjustments, and impact on timeline

11. Health, Safety and Environment: HSE requirements, compliance with regulations, and reporting procedures

12. Insurance and Liability: Required insurance coverage, liability limitations, and indemnification provisions

13. Default and Termination: Events of default, remedies, termination rights, and consequences

14. Dispute Resolution: Process for resolving disputes including mediation, arbitration, and governing law

15. General Provisions: Standard legal provisions including notices, assignment, and entire agreement

What sections are optional to include in a Construction Agreement Form?

1. Design Obligations: Required for design-build contracts where contractor has design responsibilities

2. Performance Security: Details of performance bonds or guarantees, typically required for larger projects

3. Liquidated Damages: Specific compensation for delay or performance failures, if agreed between parties

4. Defects Liability: Extended warranty provisions beyond standard defects period

5. Force Majeure: Provisions for unforeseen events and their impact on contract obligations

6. Intellectual Property Rights: Required when design or innovative construction methods are involved

7. Local Content Requirements: Specific provisions for meeting Saudization and local content requirements

8. Financing Provisions: Required when project involves external financing or specific payment structures

What schedules should be included in a Construction Agreement Form?

1. Schedule 1 - Scope of Works: Detailed technical specifications and drawings

2. Schedule 2 - Project Timeline: Detailed program of works including milestones and critical path

3. Schedule 3 - Price Schedule: Detailed breakdown of contract price, rates, and quantities

4. Schedule 4 - Payment Schedule: Milestone-based payment terms and procedures

5. Schedule 5 - Site Information: Site details, access points, and existing conditions

6. Schedule 6 - Required Approvals: List of required permits, licenses, and regulatory approvals

7. Schedule 7 - Key Personnel: Details of key project staff and their qualifications

8. Schedule 8 - Forms of Bonds and Guarantees: Templates for required security documents

9. Schedule 9 - Insurance Requirements: Detailed insurance specifications and coverage limits

10. Schedule 10 - Quality Assurance Plan: Detailed quality control procedures and standards

11. Appendix A - HSE Requirements: Detailed health, safety, and environmental requirements

12. Appendix B - Testing and Commissioning: Procedures for testing and accepting completed works

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Saudi Arabia

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Construction

Real Estate Development

Infrastructure

Energy

Industrial

Commercial Property

Residential Property

Healthcare

Education

Hospitality

Religious Buildings

Government and Public Works

Transportation

Manufacturing

Retail

Relevant Teams

Legal

Commercial

Procurement

Project Management

Operations

Risk and Compliance

Finance

Technical

Engineering

Health Safety and Environment

Quality Assurance

Business Development

Construction Management

Relevant Roles

Project Director

Construction Manager

Legal Counsel

Contract Manager

Procurement Manager

Project Manager

Chief Executive Officer

Chief Financial Officer

Commercial Director

Technical Director

Risk Manager

Compliance Officer

Operations Manager

Site Manager

Quantity Surveyor

Cost Controller

Chief Engineer

HSE Manager

Quality Assurance Manager

Business Development Manager

Industries
Government Tenders and Procurement Law (GTPL): Primary legislation governing public construction contracts and procurement procedures in Saudi Arabia, including tender processes, contractor obligations, and payment terms
Saudi Building Code (SBC): Comprehensive set of construction regulations covering technical requirements, safety standards, and building specifications that must be adhered to in all construction projects
Saudi Labor Law: Regulates employment relationships, working conditions, and safety requirements for construction workers, including Saudization requirements
Commercial Courts Law: Governs commercial disputes and provides framework for resolving construction-related conflicts, including arbitration provisions
Environmental Protection Laws and Standards: Regulations concerning environmental impact assessments, waste management, and environmental protection during construction activities
Municipality and Rural Affairs Technical Requirements: Local building permits, zoning regulations, and technical requirements specific to different municipalities in Saudi Arabia
Civil Defense Safety Requirements: Fire safety and emergency requirements that must be incorporated into construction projects
Engineering Professional Practice Regulations: Requirements for engineering practices, professional licensing, and supervision of construction projects
Anti-Commercial Fraud Law: Regulations regarding quality of construction materials and prevention of fraudulent practices in construction contracts
Value Added Tax (VAT) Law: Tax implications and requirements for construction contracts and related services
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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