International Sales Contract Template for Saudi Arabia

An International Sales Contract is a legally binding agreement that governs the sale and purchase of goods between parties in different countries, with one party based in Saudi Arabia. This document establishes clear terms for cross-border transactions while ensuring compliance with Saudi Arabian commercial law and Sharia principles.

When do you need this document?

You need an International Sales Contract when engaging in any cross-border trade involving Saudi Arabian entities. This includes manufacturing companies exporting products from Saudi Arabia to international markets, foreign businesses importing goods into Saudi Arabia, or Saudi companies purchasing equipment and materials from overseas suppliers. The contract is essential for establishing clear terms before any international transaction begins, protecting both parties from disputes and ensuring regulatory compliance. It's particularly important when dealing with high-value transactions, complex delivery arrangements, or when establishing ongoing supply relationships with international partners.

Key legal considerations

Several critical legal aspects must be addressed in your International Sales Contract. Product specifications and quality standards must be clearly defined to avoid disputes, while delivery terms should reference internationally recognized Incoterms to clarify risk transfer and responsibilities. Payment terms require careful consideration to ensure Sharia compliance, particularly regarding interest payments and currency exchange arrangements. The contract should address force majeure events, intellectual property rights, and liability limitations. Risk allocation between parties must be clearly established, covering issues such as product defects, delivery delays, and customs clearance problems. Additionally, the agreement should specify governing law and dispute resolution mechanisms, considering both Saudi Arabian courts and international arbitration options.

Legal requirements in Saudi Arabia

Under Saudi Arabian law, International Sales Contracts must comply with the Commercial Courts Law (Royal Decree No. M/93), which governs commercial disputes and transactions. If the transaction involves commercial agents or distributors, compliance with the Commercial Agencies Law (Royal Decree No. M/11) is mandatory. Payment terms must align with the Law of Commercial Papers (Royal Decree No. M/37) when using negotiable instruments. The contract must consider GCC Unified Customs Law requirements for goods entering or leaving Saudi Arabia. All terms must be consistent with Sharia principles, particularly regarding prohibited interest (riba) and excessive uncertainty (gharar). Documentation must be prepared in Arabic or include certified Arabic translations for legal proceedings. The agreement should specify compliance with Saudi quality standards and regulatory approvals where applicable.