Contract Manufacturing Agreement Template for Saudi Arabia

The Contract Manufacturing Agreement is essential for businesses seeking to outsource their manufacturing operations in Saudi Arabia. This document is particularly relevant in the context of Saudi Arabia's Vision 2030, which aims to expand the country's manufacturing sector and increase local content. The agreement covers crucial aspects such as production specifications, quality control measures, intellectual property protection, and compliance with Saudi regulations and Sharia law. It's commonly used when companies want to leverage specialized manufacturing capabilities without investing in their own facilities, or when expanding production capacity through third-party manufacturers. The document must address specific Saudi Arabian legal requirements, including SASO standards, labor laws, and environmental regulations, while ensuring the commercial arrangement remains Sharia-compliant.

1. Parties: Identification of the contracting parties - the manufacturer and the client company, including full legal names, registration numbers, and addresses

2. Background: Context of the agreement, including the client's business, manufacturer's capabilities, and general purpose of the arrangement

3. Definitions: Detailed definitions of technical terms, product specifications, and other key terms used throughout the agreement

4. Appointment and Scope: Appointment of manufacturer, exclusivity terms (if any), and detailed scope of manufacturing services

5. Manufacturing Process and Standards: Detailed requirements for the manufacturing process, quality standards, and compliance with Saudi regulations

6. Supply of Materials: Responsibilities for raw materials procurement, inventory management, and material specifications

7. Quality Control: Quality assurance procedures, testing requirements, and acceptance criteria

8. Pricing and Payment Terms: Pricing structure, payment schedules, and currency considerations in compliance with Sharia principles

9. Intellectual Property Rights: Ownership and protection of IP, including manufacturing processes, designs, and final products

10. Confidentiality: Protection of confidential information and trade secrets

11. Term and Termination: Duration of agreement, renewal terms, and termination provisions

12. Warranties and Indemnities: Product warranties, manufacturing quality guarantees, and indemnification provisions

13. Force Majeure: Provisions for unforeseen circumstances affecting manufacturing capabilities

14. Governing Law and Dispute Resolution: Saudi law as governing law and dispute resolution mechanisms