Product Sales Agreement Contract Template for Saudi Arabia

The Product Sales Agreement Contract is a fundamental commercial document used in Saudi Arabia to formalize the sale and purchase of products between parties. It serves as the primary instrument for establishing clear commercial terms while ensuring compliance with Saudi law, including Sharia principles, the Commercial Courts Law, and other relevant regulations. This agreement is essential for businesses engaged in product sales within or into Saudi Arabia, whether for single transactions or ongoing supply relationships. The document typically covers critical aspects such as product specifications, pricing, delivery terms, warranties, and dispute resolution mechanisms, while incorporating necessary provisions for VAT compliance and commercial agency requirements where applicable. It's particularly important as it must balance international commercial practices with local legal requirements, including the prohibition of gharar (excessive uncertainty) and riba (interest) under Islamic law.

1. Parties: Identification of seller and buyer with full legal names, addresses, and commercial registration details as required under Saudi law

2. Background: Context of the agreement and general commercial purpose

3. Definitions: Key terms used throughout the agreement, including product specifications, delivery terms, and payment-related definitions

4. Product Specifications: Detailed description of products to be sold, including quality standards and compliance with Saudi technical regulations

5. Pricing and Payment: Price structure, payment terms (Sharia-compliant), currency, and VAT provisions

6. Ordering Process: Procedures for placing and accepting orders, minimum order quantities if applicable

7. Delivery and Risk: Delivery terms, timing, logistics, risk transfer, and Incoterms where applicable

8. Quality and Inspection: Quality standards, inspection rights, and acceptance/rejection procedures

9. Warranties: Product warranties, compliance with Saudi standards, and warranty claim procedures

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

11. Force Majeure: Events excusing performance, aligned with Saudi law principles

12. Governing Law and Jurisdiction: Reference to Saudi law application and Saudi courts' jurisdiction

13. Notices: Communication procedures and contact details for official notices