Management Agreement for Saudi Arabia

Management Agreement Template for Saudi Arabia

A Management Agreement governed by Saudi Arabian law establishes the terms and conditions under which one party provides management services to another. This document outlines the scope of management services, responsibilities, performance metrics, compensation structure, and governance framework while ensuring compliance with Saudi laws, including Sharia principles. It addresses key aspects such as operational control, decision-making authority, reporting requirements, and risk allocation, all within the context of Saudi Arabian legal and regulatory requirements. The agreement includes specific provisions for dispute resolution through Saudi courts or arbitration centers and incorporates necessary compliance elements for both local and international business practices.

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What is a Management Agreement?

The Management Agreement is a crucial document used when one entity seeks to delegate management responsibilities to another party in Saudi Arabia. It is particularly relevant for businesses looking to benefit from professional management expertise while maintaining ownership and strategic control. The agreement must comply with Saudi Arabian laws, including the Companies Law, Commercial Courts Law, and Sharia principles. This document typically includes detailed provisions on management scope, operational control, performance metrics, financial arrangements, and regulatory compliance. The Management Agreement is especially important in contexts such as hotel management, facility management, asset management, or business operations management, where specialized expertise is required. It provides a framework for the relationship between the service provider and the recipient, clearly defining authorities, responsibilities, and accountability measures while ensuring alignment with local business practices and legal requirements.

What sections should be included in a Management Agreement?

1. Parties: Identification of the parties entering into the agreement, including full legal names, addresses, and registration details

2. Background: Context of the agreement, including brief description of the parties and purpose of the management arrangement

3. Definitions: Detailed definitions of key terms used throughout the agreement

4. Appointment and Scope: Terms of appointment and detailed scope of management services to be provided

5. Duration and Term: Period of the agreement, including commencement date and any renewal provisions

6. Manager's Rights and Obligations: Comprehensive list of the manager's responsibilities, authority levels, and operational scope

7. Company's Rights and Obligations: Obligations of the company, including provision of information, resources, and support

8. Fees and Payment Terms: Management fees, payment structure, expenses, and payment mechanisms

9. Performance Standards: Expected service levels, KPIs, and quality standards

10. Reporting Requirements: Regular reporting obligations, including frequency, content, and format

11. Confidentiality: Protection of confidential information and trade secrets

12. Intellectual Property: Ownership and usage rights of intellectual property

13. Liability and Indemnification: Limitation of liability and mutual indemnification provisions

14. Termination: Grounds for termination, notice periods, and consequences

15. Dispute Resolution: Process for resolving disputes, including jurisdiction and applicable law

16. General Provisions: Standard boilerplate clauses including notices, amendments, and severability

What sections are optional to include in a Management Agreement?

1. Shariah Compliance: Specific provisions ensuring compliance with Islamic law principles, required when the agreement needs explicit Shariah compliance

2. Staff and Employment: Provisions regarding employment and management of staff, needed when the agreement includes human resource management

3. Insurance: Insurance requirements and obligations, included when specific insurance coverage is necessary

4. Non-Competition: Restrictions on competitive activities, included when protecting business interests is crucial

5. Force Majeure: Provisions for unforeseen circumstances, particularly relevant in long-term management agreements

6. Technology and Systems: Provisions regarding use and maintenance of technology systems, needed when IT systems are part of the management scope

7. Compliance with Anti-Corruption Laws: Specific provisions regarding anti-corruption compliance, necessary for international agreements or high-value contracts

8. Environmental Compliance: Environmental protection obligations, needed in industries with environmental impact

What schedules should be included in a Management Agreement?

1. Schedule 1 - Scope of Services: Detailed breakdown of management services to be provided

2. Schedule 2 - Fee Structure: Detailed fee calculations, incentives, and payment mechanisms

3. Schedule 3 - Key Performance Indicators: Specific performance metrics and measurement criteria

4. Schedule 4 - Reporting Templates: Standard formats for required reports and documentation

5. Schedule 5 - Key Personnel: List of key management personnel and their roles

6. Schedule 6 - Service Levels: Detailed service level requirements and standards

7. Appendix A - Power of Attorney: Format of power of attorney if required for management activities

8. Appendix B - Required Insurances: List of required insurance coverage and minimum limits

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Saudi Arabia

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Clauses
Relevant Industries

Healthcare

Hospitality

Real Estate

Manufacturing

Retail

Education

Technology

Transportation

Construction

Energy

Financial Services

Telecommunications

Industrial

Mining

Agriculture

Entertainment

Relevant Teams

Legal

Operations

Compliance

Finance

Commercial

Risk Management

Business Development

Human Resources

Facility Management

Project Management

Asset Management

Corporate Governance

Strategy

Relevant Roles

Chief Executive Officer

Managing Director

Operations Director

Legal Counsel

Compliance Officer

Contract Manager

Business Development Manager

Facility Manager

General Manager

Project Manager

Risk Manager

Finance Director

Commercial Director

Management Consultant

Property Manager

Asset Manager

Operations Manager

Human Resources Director

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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