Middleman Commission Agreement for Saudi Arabia

Middleman Commission Agreement Template for Saudi Arabia

A comprehensive legal agreement governed by Saudi Arabian law that establishes and regulates the relationship between a principal company and a middleman/intermediary. The agreement details commission structures, performance expectations, and compliance requirements while adhering to Saudi commercial regulations and Sharia principles. It includes specific provisions for territory definition, payment terms, and dispute resolution mechanisms in accordance with Saudi jurisdiction, ensuring all aspects of the intermediary relationship are properly documented and enforceable under local law.

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What is a Middleman Commission Agreement?

The Middleman Commission Agreement is essential for businesses operating in Saudi Arabia that utilize intermediaries for their commercial activities. This document is particularly crucial given Saudi Arabia's unique legal framework, which combines modern commercial law with Islamic Sharia principles. The agreement is typically used when a company (Principal) wishes to engage an intermediary to facilitate business transactions, arrange deals, or represent their interests in specific territories. It must comply with the Saudi Commercial Agency Law and related regulations, making it vital to include specific provisions about commission structures, payment terms, and compliance requirements. The document helps prevent future disputes by clearly defining the scope of authority, responsibilities, and compensation mechanisms while ensuring alignment with local legal requirements and business practices.

What sections should be included in a Middleman Commission Agreement?

1. Parties: Identification of the Principal and the Middleman, including full legal names, addresses, and commercial registration details

2. Background: Context of the agreement, business purpose, and confirmation that the Middleman has the necessary qualifications and licenses

3. Definitions: Key terms used throughout the agreement, including 'Commission', 'Territory', 'Customers', and 'Services'

4. Appointment and Scope: Terms of the Middleman's appointment, exclusivity/non-exclusivity, and detailed scope of services

5. Term and Termination: Duration of the agreement, renewal terms, and grounds for termination

6. Commission Structure: Detailed breakdown of commission rates, calculation methods, and payment terms

7. Rights and Obligations: Specific duties and responsibilities of both parties, including reporting requirements

8. Compliance: Obligations to comply with Saudi laws, including Commercial Agency Law and Sharia principles

9. Confidentiality: Protection of confidential information and trade secrets

10. Dispute Resolution: Process for resolving disputes under Saudi law, including jurisdiction of Saudi courts

11. Governing Law: Explicit statement of Saudi law as governing law and reference to Sharia principles

What sections are optional to include in a Middleman Commission Agreement?

1. Non-Competition: Restrictions on the Middleman's ability to work with competitors, used when dealing with sensitive markets or products

2. Performance Targets: Specific sales or performance goals, included when commission rates are tied to performance

3. Training and Support: Details of training provided by the Principal, included when complex products or services are involved

4. Insurance: Insurance requirements for the Middleman, included for high-risk activities or valuable transactions

5. Intellectual Property: IP rights and usage terms, included when the Middleman will be using the Principal's branding or materials

6. Force Majeure: Provisions for unforeseen circumstances, particularly relevant in international trade contexts

7. Data Protection: Specific data handling requirements, included when personal or sensitive data is involved

What schedules should be included in a Middleman Commission Agreement?

1. Commission Rates Schedule: Detailed breakdown of commission rates for different products/services/customer categories

2. Territory Definition: Specific geographical areas or market segments covered by the agreement

3. Approved Customer List: List of pre-approved customers or customer categories if applicable

4. Reporting Templates: Standard forms for activity reporting and commission calculations

5. Service Level Agreement: Specific performance metrics and service standards

6. Compliance Procedures: Detailed procedures for ensuring compliance with Saudi regulations

7. Product/Service Description: Detailed description of products or services covered by the agreement

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

Jurisdiction

Saudi Arabia

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use

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