Contract Termination Agreement Template for Saudi Arabia

The Contract Termination Agreement is a crucial legal document used when parties wish to formally end their contractual relationship in Saudi Arabia. It's particularly important given the strict requirements of Saudi Labor Law and Sharia principles regarding contract termination. This document is essential when employment contracts, service agreements, or commercial partnerships need to be terminated by mutual consent. It provides a clear framework for addressing all termination-related matters, including financial settlements, continuing obligations, and compliance requirements. The agreement must be carefully drafted to ensure it meets all local legal requirements, including proper Arabic translation when necessary, and should address specific Saudi Arabian regulatory requirements regarding contract termination, particularly those related to employee rights, end-of-service benefits, and commercial regulations.

1. Parties: Identification of all parties to the agreement, including full legal names and addresses

2. Background: Brief description of the original contract, its date, and the circumstances leading to termination

3. Definitions: Key terms used throughout the agreement

4. Termination Date: Specific date when the contract will terminate and its effects will cease

5. Mutual Agreement to Terminate: Express statement of parties' agreement to terminate the original contract

6. Settlement of Accounts: Details of final payments, including any outstanding amounts, end-of-service benefits, and settlement of accounts

7. Return of Property: Obligations regarding return of company property, documents, and confidential information

8. Release and Discharge: Mutual release from obligations under the original contract, subject to specified exceptions

9. Confidentiality: Ongoing obligations regarding confidentiality and non-disclosure

10. Governing Law and Jurisdiction: Confirmation of Saudi law as governing law and jurisdiction for disputes

11. Language: Specification of controlling language version if agreement is bilingual

12. Execution: Signature blocks and execution formalities