Sales Service Agreement Template for Saudi Arabia

A Sales Service Agreement is a comprehensive legal contract that governs business relationships in Saudi Arabia where one party provides both products and associated services to another. This document is essential for establishing clear terms, responsibilities, and expectations when your business model combines tangible sales with service delivery under Saudi Arabian law.

When do you need this document?

You need a Sales Service Agreement when your business provides products alongside related services such as installation, maintenance, training, or technical support in Saudi Arabia. This applies to technology companies selling software with implementation services, equipment suppliers offering installation and maintenance, automotive dealers providing servicing packages, or construction companies combining material supply with installation services. The agreement is particularly crucial for international companies entering the Saudi market through local agents or establishing partnerships with Saudi entities, as it ensures compliance with local commercial regulations and Sharia principles.

Key legal considerations

Your agreement must clearly define the scope of both sales and service components, including detailed specifications, delivery timelines, and performance standards. Payment structures should address both product pricing and service fees, ensuring compliance with VAT regulations and Islamic finance principles. Risk allocation clauses are critical, particularly regarding product defects, service failures, and liability limitations. Include termination provisions that protect both parties while allowing for contract dissolution under specific circumstances. Intellectual property clauses should address any proprietary technology or processes involved in service delivery. Dispute resolution mechanisms must comply with Saudi commercial court procedures and may include arbitration options acceptable under Sharia Law.

Legal requirements in Saudi Arabia

Your Sales Service Agreement must comply with Islamic Sharia Law as the fundamental source of commercial regulation in Saudi Arabia. The Commercial Court Law (2020) governs dispute resolution and enforcement procedures for your agreement. If your business involves foreign entities, compliance with the Saudi Commercial Agencies Law is mandatory, requiring proper registration and local representation. Electronic service components must adhere to the Electronic Commerce Law (2019), particularly for digital delivery or online service platforms. VAT Law compliance is essential for proper tax treatment of both sales and service components. Anti-Money Laundering Law requirements apply to payment structures and customer verification processes. All contracting parties must provide proper identification including commercial registration numbers, and foreign companies must ensure authorized representation through registered local agents or subsidiaries.