Sales Representative Contract Template for Saudi Arabia

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Key Requirements PROMPT example:

Sales Representative Contract

"I need a Sales Representative Contract for appointing an exclusive agent in Saudi Arabia to sell our medical devices, with specific performance targets and quarterly reviews, starting from March 2025."

Document background
The Sales Representative Contract is a crucial document for companies seeking to establish or maintain a sales presence in Saudi Arabia through local representatives. This agreement is specifically designed to comply with Saudi Arabian legal requirements, including the Commercial Agencies Law, Labor Law, and Islamic Sharia principles. It defines the commercial relationship between a principal company and its authorized sales representative, covering essential aspects such as territory rights, commission structures, performance expectations, and compliance requirements. The document is particularly important as Saudi law requires certain products and services to be sold through registered local representatives, making it essential for international companies entering the Saudi market. The contract also addresses specific local business practices, regulatory requirements, and cultural considerations unique to Saudi Arabia.
Suggested Sections

1. Parties: Identification of the Principal company and the Sales Representative, including full legal names, addresses, and commercial registration details

2. Background: Context of the agreement, business purpose, and confirmation that the Sales Representative meets Saudi legal requirements for commercial agency

3. Definitions: Key terms used throughout the agreement, including Products, Territory, Customers, Commission, etc.

4. Appointment and Scope: Terms of appointment, whether exclusive or non-exclusive, and defined territory

5. Term and Termination: Duration of the agreement, renewal terms, and termination provisions compliant with Saudi law

6. Duties and Obligations of Sales Representative: Detailed responsibilities, sales targets, reporting requirements, and compliance obligations

7. Principal's Obligations: Support, training, marketing materials, and other obligations of the principal company

8. Commission Structure: Commission rates, calculation method, payment terms, and conditions for commission eligibility

9. Intellectual Property Rights: Usage rights for trademarks, trade names, and other IP during the agreement term

10. Confidentiality: Protection of confidential information and trade secrets

11. Compliance with Laws: Obligation to comply with Saudi laws, anti-corruption requirements, and Sharia principles

12. Dispute Resolution: Process for resolving disputes, applicable law, and jurisdiction provisions

13. General Provisions: Standard clauses including notices, amendments, assignment, and entire agreement

Optional Sections

1. Non-Competition: Restrictions on representing competing products, used when exclusive representation is required

2. Performance Targets: Specific sales targets and consequences of not meeting them, used for performance-based agreements

3. Training Requirements: Detailed training obligations and certification requirements, used for technical products

4. Marketing and Advertising: Specific requirements for local marketing activities, used when representative handles marketing

5. Insurance Requirements: Specific insurance coverage requirements, used for high-value products or regulated industries

6. Stock and Inventory: Requirements for maintaining inventory, used when representative handles product storage

7. Sub-agents: Terms for appointing sub-agents, used when allowed under the business model

8. Customer Service: Post-sale service requirements, used for products requiring ongoing support

Suggested Schedules

1. Schedule 1 - Products: Detailed list of products covered by the agreement

2. Schedule 2 - Territory: Detailed description of geographical territory and any excluded areas

3. Schedule 3 - Commission Rates: Detailed commission structure, including any variations by product or customer type

4. Schedule 4 - Sales Targets: Quarterly/annual sales targets and performance metrics

5. Schedule 5 - Reporting Templates: Standard forms for sales reports and performance tracking

6. Schedule 6 - Principal's Trademarks: List of trademarks and usage guidelines

7. Appendix A - Compliance Procedures: Detailed compliance requirements and procedures

8. Appendix B - Training Requirements: Detailed training programs and certification requirements

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

Relevant legal definitions
Clauses
Relevant Industries

Consumer Goods

Industrial Equipment

Technology and Software

Healthcare and Medical Devices

Automotive

Construction Materials

Electronics

Telecommunications

Fashion and Luxury Goods

Food and Beverage

Manufacturing

Pharmaceuticals

Professional Services

Oil and Gas Equipment

Chemical Products

Agricultural Products

Relevant Teams

Legal

Sales

Commercial

Compliance

Business Development

Operations

Finance

International Trade

Contract Administration

Risk Management

Relevant Roles

Sales Director

Commercial Director

Business Development Manager

Legal Counsel

Compliance Officer

Contract Manager

Sales Operations Manager

Regional Sales Manager

Country Manager

Managing Director

Chief Commercial Officer

Sales Representative

Account Manager

Channel Manager

Export Manager

Distribution Manager

Industries
Commercial Agencies Law (Royal Decree No. M/11 of 1962): Primary legislation governing commercial agency and sales representation relationships in Saudi Arabia. Regulates the registration, rights, and obligations of commercial agents and sales representatives.
Implementing Regulations of the Commercial Agencies Law: Detailed regulations that supplement the Commercial Agencies Law, providing specific requirements for agency agreements and registration procedures.
Saudi Labor Law (Royal Decree No. M/51): Governs employment relationships and may be relevant if the sales representative is considered an employee rather than an independent contractor. Covers working hours, compensation, and termination provisions.
Commercial Courts Law (Royal Decree No. M/93 of 2020): Governs commercial disputes and enforcement of commercial contracts, including sales representation agreements.
Islamic Sharia Law: Fundamental source of law in Saudi Arabia that governs all contracts. Principles of Sharia must be adhered to in commercial relationships and contract formation.
Anti-Corruption Law (Royal Decree No. M/36): Relevant for provisions related to bribery and corruption prevention in sales activities and commercial relationships.
Commercial Registration Law: Requires business entities and commercial agents to maintain proper registration with the Ministry of Commerce.
Saudi Competition Law (Royal Decree No. M/75 of 2019): Relevant for provisions related to exclusive arrangements and territorial restrictions in sales representation agreements.
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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