Document background
The Non-Refundable Payment Agreement is utilized in Saudi Arabian business transactions where one party makes a payment to another with the explicit understanding that the amount cannot be recovered, regardless of subsequent events or circumstances. This document type is commonly used in scenarios such as booking fees, reservation deposits, advance payments for services, or commitment fees in commercial transactions. The agreement must carefully balance the commercial interests of the parties while ensuring compliance with Saudi Arabian law and Sharia principles, which govern all commercial transactions in the Kingdom. It typically includes specific provisions about the purpose of the payment, acknowledgment of its non-refundable nature, and the circumstances under which the payment is made, while ensuring the arrangement does not conflict with Islamic financial principles regarding uncertainty (gharar) or unjust enrichment.
