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Outsourcing Agreement Between Two Companies

Outsourcing Agreement Between Two Companies Template for Saudi Arabia

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Key Requirements PROMPT example:

Outsourcing Agreement Between Two Companies

"I need an Outsourcing Agreement Between Two Companies under Saudi law for outsourcing our IT infrastructure management services to a multinational service provider, with specific provisions for data localization and Saudization requirements, planned to commence in March 2025."

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Document background
The Outsourcing Agreement Between Two Companies is a critical legal instrument used when a business entity in Saudi Arabia wishes to delegate specific functions or services to an external service provider. This document is essential for establishing clear contractual relationships in compliance with Saudi Arabian law and Shariah principles. It is particularly relevant in today's business environment where companies increasingly focus on core competencies while outsourcing peripheral functions. The agreement covers essential elements including service definitions, performance metrics, pricing structures, governance frameworks, and compliance requirements. It must specifically address Saudi-specific requirements such as Saudization policies, data protection regulations, and local commercial laws. The document is typically used for long-term business relationships and requires careful consideration of both operational and legal aspects to ensure successful service delivery and risk management.
Suggested Sections

1. Parties: Identification of the contracting parties, including full legal names, commercial registration numbers, and registered addresses

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

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

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

5. Term and Termination: Duration of the agreement, renewal provisions, and termination rights

6. Service Levels: Performance standards, KPIs, and measurement criteria

7. Charges and Payment: Pricing structure, payment terms, invoicing requirements, and VAT considerations

8. Governance and Management: Management structure, reporting requirements, and oversight procedures

9. Personnel and Resources: Staff requirements, qualifications, and resource allocation

10. Data Protection and Security: Data handling obligations, security requirements, and compliance with Saudi data protection laws

11. Confidentiality: Protection of confidential information and trade secrets

12. Intellectual Property Rights: Ownership and licensing of IP created or used during service provision

13. Compliance with Laws: Obligations to comply with Saudi laws, including Shariah principles

14. Liability and Indemnification: Allocation of risks, limitations of liability, and indemnification obligations

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

16. Dispute Resolution: Process for resolving disputes, including Saudi law compliance and jurisdiction

Optional Sections

1. Business Continuity: Required for critical services where service interruption would significantly impact operations

2. Transition Services: Needed when complex implementation or handover periods are required

3. Change Control: Include when service requirements are likely to evolve significantly

4. Anti-corruption Compliance: Important when dealing with government entities or high-risk sectors

5. Insurance: Required for high-risk services or when significant assets are involved

6. Environmental Compliance: Necessary for services with environmental impact

7. Saudization Requirements: Include when service delivery involves local workforce requirements

8. Parent Company Guarantee: Required when seeking additional financial security

9. Marketing and Publicity: Include when parties want to control public announcements

10. Non-Competition: Required when protecting against competitive threats

Suggested Schedules

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

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

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

4. Governance Procedures: Detailed procedures for meetings, reporting, and escalation

5. Security Requirements: Specific security protocols and compliance requirements

6. Staff and Key Personnel: Details of key staff, qualifications, and replacement procedures

7. Transition Plan: Detailed implementation and service transition timeline

8. Exit Plan: Procedures and requirements for service termination and transition

9. Business Continuity Plan: Detailed procedures for maintaining service during disruptions

10. Approved Subcontractors: List of approved subcontractors and their roles

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Agreement
Applicable Law
Business Day
Charges
Client
Client Data
Client Materials
Confidential Information
Data Protection Laws
Deliverables
Dispute
Effective Date
Force Majeure Event
Good Industry Practice
Governance Procedures
Initial Term
Intellectual Property Rights
Key Personnel
Material Breach
Notice
Personal Data
Regulatory Requirements
Renewal Term
Service Credits
Service Levels
Services
Service Provider
Service Provider Personnel
Service Provider Systems
Service Recipient
Shariah Law
SLA
Specifications
Subcontractor
Term
Termination Date
Transition Period
Transition Plan
VAT
Working Hours
Change Control Procedure
Compliance Requirements
Exit Plan
Implementation Plan
Key Performance Indicators
Loss
Milestone
Quality Standards
Related Parties
Representatives
Security Requirements
Service Commencement Date
Service Locations
Software
Third Party Materials
Clauses
Definitions
Interpretation
Term and Duration
Services Scope
Service Levels
Charges and Payment
Invoicing
Performance Monitoring
Service Provider Obligations
Client Obligations
Governance
Change Control
Personnel
Key Personnel
Subcontracting
Data Protection
Confidentiality
Intellectual Property
Security
Compliance with Laws
Shariah Compliance
Anti-corruption
Force Majeure
Limitation of Liability
Indemnification
Insurance
Termination Rights
Termination Consequences
Exit Management
Transition Services
Business Continuity
Disaster Recovery
Audit Rights
Records and Reports
Notices
Assignment
Amendment
Waiver
Severability
Entire Agreement
Third Party Rights
Relationship of Parties
Dispute Resolution
Governing Law
Jurisdiction
Language
Counterparts
Non-solicitation
Warranties
Service Credits
Step-in Rights
Saudization Requirements
VAT and Taxation
Relevant Industries

Information Technology

Business Process Outsourcing

Manufacturing

Healthcare

Financial Services

Telecommunications

Logistics and Supply Chain

Facilities Management

Human Resources Services

Professional Services

Energy and Utilities

Construction

Real Estate

Relevant Teams

Legal

Procurement

Operations

Finance

Risk and Compliance

Information Technology

Human Resources

Vendor Management

Project Management

Information Security

Business Development

Strategy

Internal Audit

Relevant Roles

Chief Executive Officer

Chief Operating Officer

Chief Financial Officer

Legal Counsel

Procurement Manager

Operations Director

Vendor Management Director

Risk Manager

Compliance Officer

Project Manager

Service Delivery Manager

Contract Manager

Business Unit Head

Information Security Officer

Human Resources Director

Finance Director

Industries
Saudi Labor Law (Royal Decree No. M/51): Governs employment relationships, working conditions, and rights of workers. Crucial for defining permissible outsourcing arrangements and ensuring compliance with local employment regulations.
Personal Data Protection Law (PDPL): Regulates the collection, processing, and transfer of personal data in Saudi Arabia. Essential for data handling provisions in the outsourcing agreement.
Commercial Courts Law (Royal Decree No. M/93): Governs commercial disputes and transactions between businesses. Relevant for dispute resolution and enforcement of contractual obligations.
Islamic Law (Shariah): Fundamental basis of Saudi legal system. Contract must comply with Shariah principles, including prohibition of riba (interest) and gharar (excessive uncertainty).
Electronic Transactions Law (Royal Decree No. M/18): Regulates electronic transactions and digital signatures. Important for digital service delivery and electronic communications between parties.
Law of Commercial Agencies: Regulates commercial agency relationships and business representations. Relevant if the outsourcing arrangement involves agency-like relationships.
Foreign Investment Law (Royal Decree No. M/1): Regulates foreign investment and business activities in Saudi Arabia. Essential if one party is a foreign entity.
Competition Law (Royal Decree No. M/75): Ensures fair competition and prevents monopolistic practices. Relevant for exclusivity clauses and market conduct.
Value Added Tax Law: Governs VAT obligations in service provisions. Important for financial terms and invoicing requirements.
Law on the Protection of Confidential Commercial Information: Protects trade secrets and confidential business information. Critical for confidentiality and non-disclosure provisions.
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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