The Sales Partnership Agreement is a crucial document used when a company wishes to expand its sales operations in Saudi Arabia through a partnership model. It's particularly important given Saudi Arabia's unique legal framework, which combines modern commercial law with Sharia principles. The agreement must comply with the Commercial Agencies Law (Royal Decree No. M/11) and other relevant regulations. This document is essential for businesses seeking to establish a formal sales relationship while ensuring proper registration with Saudi authorities. It covers critical aspects such as territory definition, commission structures, performance metrics, and compliance requirements. The agreement is especially relevant for foreign companies entering the Saudi market, as it helps navigate local business requirements and cultural considerations.
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1. Parties: Identifies the contracting parties with full legal names, addresses, and registration details
2. Background: Sets out the context of the agreement and parties' intentions
3. Definitions: Defines key terms used throughout the agreement
4. Appointment and Territory: Defines the nature of partnership, exclusivity status, and geographical territory
5. Term and Renewal: Specifies duration of agreement and renewal conditions
6. Rights and Obligations: Details core responsibilities of both parties
7. Sales Targets and Performance: Establishes sales objectives and performance metrics
8. Commission Structure: Details the compensation model and payment terms
9. Intellectual Property Rights: Addresses usage of trademarks, logos, and other IP
10. Confidentiality: Protects confidential information and trade secrets
11. Termination: Sets out grounds and procedures for ending the agreement
12. Post-Termination Obligations: Specifies obligations surviving termination
13. Governing Law and Jurisdiction: Confirms Saudi law application and dispute resolution method
14. Force Majeure: Addresses unforeseen circumstances preventing performance
15. General Provisions: Contains standard boilerplate clauses
1. Training and Support: Include when partner requires specific product or sales training
2. Marketing and Promotion: Add when parties share marketing responsibilities
3. Non-Competition: Include when restricting partner from competing activities
4. Insurance: Add when specific insurance requirements exist
5. Minimum Purchase Requirements: Include for partnerships with mandatory purchase volumes
6. Product Warranty: Add when dealing with physical products requiring warranties
7. Compliance with Anti-Corruption Laws: Include for international partnerships or high-value contracts
8. Data Protection: Add when partnership involves handling personal data
1. Product List: Detailed list of products/services covered by the agreement
2. Commission Rates: Detailed breakdown of commission structures and calculations
3. Sales Targets: Specific sales targets and measurement criteria
4. Territory Map: Detailed definition of geographical territory
5. Marketing Guidelines: Brand guidelines and marketing requirements
6. Reporting Templates: Standard forms for performance reporting
7. Training Program: Details of required training and certification processes
8. Service Level Agreement: Performance standards and metrics
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