Document background
The Sales With Buyback Agreement is utilized in commercial transactions where a party sells an asset with the intention of repurchasing it at a future date under predetermined terms. This document type is particularly relevant in Saudi Arabia's business environment, where it must comply with both commercial regulations and Islamic law principles. The agreement is commonly used for asset financing, inventory management, or temporary transfer of valuable equipment while maintaining Sharia compliance. It details the initial sale price, buyback terms, maintenance obligations, and risk allocation during the interim period. The document is structured to avoid any elements of conventional interest (Riba) while providing a legally enforceable framework for the transaction. This type of agreement is particularly valuable in sectors requiring significant capital investment or dealing with high-value assets, where traditional financing methods may not be suitable or permissible under Saudi law.
