Purchase Agency Agreement Template for Saudi Arabia

The Purchase Agency Agreement is essential for businesses operating in Saudi Arabia where commercial agency relationships are strictly regulated. This document is particularly crucial when a company (usually foreign) needs to appoint a local Saudi representative to handle purchase transactions on their behalf. The agreement must align with Saudi Arabia's Commercial Agency Law and Islamic Sharia principles, requiring careful consideration of local legal requirements and business practices. It typically includes detailed provisions about the scope of authority, territorial limitations, commission structures, compliance obligations, and reporting requirements. The document is especially important as Saudi regulations often require foreign companies to work through local agents for certain commercial activities, making it a fundamental tool for establishing legally compliant business operations in the Kingdom.

1. Parties: Identification of the Principal and Agent, including full legal names, addresses, and commercial registration details as required by Saudi law

2. Background: Context of the agreement, business objectives, and confirmation of Agent's qualifications under Saudi regulations

3. Definitions: Key terms used throughout the agreement, including specific Saudi legal and commercial terms

4. Appointment and Scope: Express appointment of Agent, territory definition, and detailed scope of authority in line with Commercial Agency Law

5. Agent's Rights and Obligations: Comprehensive listing of Agent's duties, responsibilities, and rights under Saudi law

6. Principal's Rights and Obligations: Principal's commitments, support obligations, and rights in relation to the Agent

7. Commission Structure: Detailed commission calculations, payment terms, and currency specifications

8. Term and Renewal: Duration of the agreement and conditions for renewal

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

10. Confidentiality: Protection of confidential information and trade secrets

11. Termination: Grounds for termination, notice requirements, and consequences of termination

12. Post-Termination Obligations: Duties and restrictions following agreement termination

13. Governing Law and Jurisdiction: Confirmation of Saudi law governance and dispute resolution procedures

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

15. General Provisions: Standard clauses including entirety, amendments, and severability