Long Term Supplier Agreement Template for Saudi Arabia

The Long Term Supplier Agreement is essential for businesses seeking to establish stable, long-term supply relationships in Saudi Arabia. This document is particularly relevant when parties anticipate an ongoing supply arrangement extending beyond simple purchase orders, typically for periods of 3-5 years or more. It provides comprehensive coverage of commercial terms while ensuring compliance with Saudi law and Shariah principles. The agreement is commonly used in various sectors from manufacturing to services, where consistent supply arrangements are crucial for business operations. It includes detailed provisions for pricing, quality standards, delivery terms, performance metrics, and risk allocation, while incorporating necessary flexibility for long-term relationships. The document addresses specific Saudi regulatory requirements, including local content requirements where applicable, and provides appropriate dispute resolution mechanisms recognizing Saudi jurisdiction.

1. Parties: Identification of the supplier and customer, including full legal names, registration details, and addresses

2. Background: Context of the agreement, relationship between parties, and general purpose of the arrangement

3. Definitions and Interpretation: Definitions of key terms and interpretation rules, including reference to Shariah compliance

4. Scope of Supply: Detailed description of goods/services to be supplied, including specifications and standards

5. Term and Renewal: Duration of the agreement, renewal provisions, and notice periods

6. Ordering Process: Procedures for placing and accepting orders, including minimum order quantities if applicable

7. Pricing and Payment: Price structure, payment terms, invoicing requirements, and currency provisions

8. Delivery and Acceptance: Delivery terms, timelines, acceptance criteria, and procedures for rejection

9. Quality Requirements: Quality standards, testing procedures, and compliance with Saudi regulations

10. Warranties and Representations: Standard and specific warranties, including Shariah compliance warranties

11. Supplier Obligations: Key responsibilities and commitments of the supplier

12. Customer Obligations: Key responsibilities and commitments of the customer

13. Performance Metrics: KPIs, service levels, and measurement criteria

14. Intellectual Property: IP rights, licenses, and protections

15. Confidentiality: Protection of confidential information and trade secrets

16. Liability and Indemnification: Limitation of liability, indemnification obligations, and insurance requirements

17. Force Majeure: Events constituting force majeure and consequences

18. Termination: Termination rights, procedures, and consequences

19. Dispute Resolution: Dispute resolution procedures, governing law, and jurisdiction provisions

20. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment