Document background
The Distribution License Agreement is a crucial document used when a foreign or local manufacturer/supplier (licensor) wishes to appoint a Saudi Arabian company as their distributor for specific products within the Kingdom. This agreement must comply with Saudi Arabian law, including Sharia principles and the Commercial Agencies Law, and typically requires registration with the Ministry of Commerce. It establishes the framework for the distribution relationship, including territorial rights, exclusivity arrangements, performance obligations, and compliance requirements. The document is particularly important in Saudi Arabia due to strict local commercial agency regulations and the need to protect both parties' interests while ensuring compliance with local laws. The agreement typically includes detailed provisions on product specifications, quality standards, pricing mechanisms, intellectual property rights, and dispute resolution procedures tailored to the Saudi Arabian legal context.
