Outsourcing Agreement for Saudi Arabia

Outsourcing Agreement Template for Saudi Arabia

A comprehensive legal agreement governed by Saudi Arabian law that establishes the terms and conditions for outsourcing services between a service provider and a client organization. The document addresses key aspects including service scope, performance standards, data protection, confidentiality, and compliance with Saudi regulations including Sharia law principles. It incorporates specific requirements under Saudi labor law, data protection regulations, and sector-specific requirements where applicable, while ensuring alignment with local business practices and regulatory frameworks.

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What is a Outsourcing Agreement?

The Outsourcing Agreement is essential for businesses operating in Saudi Arabia that wish to delegate specific functions or services to external providers. This document is particularly relevant in the context of Saudi Arabia's Vision 2030, which promotes business efficiency and economic diversification. The agreement must comply with Saudi Arabian law, including Sharia principles, labor regulations, data protection requirements, and sector-specific regulations (such as SAMA guidelines for financial services). It typically covers service scope, performance metrics, pricing, data protection, confidentiality, intellectual property rights, and dispute resolution mechanisms. The document is crucial for both domestic and international service arrangements, requiring careful consideration of cross-border elements when foreign service providers are involved.

What sections should be included in a Outsourcing Agreement?

1. Parties: Identification of the parties entering into the agreement, including full legal names, commercial registration numbers, and authorized representatives

2. Background: Context of the agreement, business relationship, and purpose of the outsourcing arrangement

3. Definitions: Key terms used throughout the agreement, including technical and legal definitions

4. Scope of Services: Detailed description of services to be provided, including deliverables and performance standards

5. Term and Commencement: Duration of the agreement and conditions for commencement

6. Service Provider Obligations: Detailed responsibilities and commitments of the service provider

7. Client Obligations: Responsibilities and commitments of the client

8. Fees and Payment Terms: Pricing, payment schedule, invoicing, and payment methods

9. Service Levels: Performance metrics, measurement methods, and consequences of failure to meet SLAs

10. Governance and Reporting: Management structure, reporting requirements, and oversight mechanisms

11. Data Protection and Privacy: Compliance with Saudi data protection laws and data handling requirements

12. Confidentiality: Protection of confidential information and trade secrets

13. Intellectual Property: Ownership and usage rights of IP created or used during service provision

14. Liability and Indemnification: Limitation of liability and indemnification obligations

15. Force Majeure: Events beyond parties' control and their consequences

16. Termination: Grounds for termination, notice periods, and consequences of termination

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

18. General Provisions: Standard legal provisions including notices, amendments, and assignment

What sections are optional to include in a Outsourcing Agreement?

1. Transition Services: Details of knowledge transfer and transition arrangements, used when complex service transition is required

2. Business Continuity: Disaster recovery and business continuity requirements, essential for critical services

3. Security Requirements: Specific security protocols and requirements, particularly important for IT or sensitive data handling

4. Compliance with Specific Regulations: Additional regulatory compliance requirements, needed for regulated industries like financial services

5. Personnel Requirements: Specific qualifications or security clearances for service provider staff, used when specific expertise or clearance is required

6. Subcontracting: Terms for engaging subcontractors, included when subcontracting is permitted

7. Insurance: Specific insurance requirements, important for high-risk services

8. Change Control: Procedures for managing changes to services or terms, useful for long-term or complex arrangements

9. Anti-Corruption Compliance: Specific anti-corruption provisions, particularly important for international arrangements

What schedules should be included in a Outsourcing Agreement?

1. Service Description: Detailed technical and operational specifications of services

2. Service Levels and KPIs: Detailed performance metrics, measurement methods, and reporting requirements

3. Pricing and Payment Schedule: Detailed fee structure, payment terms, and pricing mechanisms

4. Data Processing Agreement: Specific terms for handling personal and sensitive data

5. Security Requirements: Detailed security protocols and standards

6. Approved Subcontractors: List of pre-approved subcontractors and their scope of work

7. Transition Plan: Detailed plan for service transition and implementation

8. Business Continuity Plan: Detailed procedures for ensuring service continuity

9. Key Personnel: List of key personnel from both parties and their roles

10. Required Insurance Coverage: Detailed insurance requirements and minimum coverage levels

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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