Seller Agreement Template for Saudi Arabia

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Seller Agreement

"I need a Seller Agreement for my Saudi-based medical equipment company, covering the Eastern Province territory, with specific provisions for regulatory compliance and product training requirements, to be effective from March 1, 2025."

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What is a Seller Agreement?

The Seller Agreement serves as a crucial legal framework for companies operating in Saudi Arabia who engage individuals or entities to sell their products or services. This document is essential when establishing formal selling relationships, whether with individual sellers, distributors, or sales agents. The agreement must comply with Saudi Arabian commercial law, including the Commercial Agencies Law and E-commerce Law, while adhering to Sharia principles. It typically covers key aspects such as territory rights, commission structures, performance metrics, compliance requirements, and operational procedures. The Seller Agreement is particularly important in the Saudi Arabian context due to specific local regulatory requirements and the need to balance modern commercial practices with traditional legal frameworks.

What sections should be included in a Seller Agreement?

1. Parties: Identification of the company and the seller, including full legal names, commercial registration numbers, and authorized representatives

2. Background: Context of the agreement and brief description of the business relationship

3. Definitions: Definitions of key terms used throughout the agreement, including technical and commercial terms

4. Scope of Agreement: Detailed description of the selling arrangement, including territory, products, and selling rights

5. Seller Obligations: Comprehensive list of seller's duties, responsibilities, and performance requirements

6. Company Obligations: Company's commitments, support, and obligations to the seller

7. Compliance Requirements: Obligations to comply with Saudi laws, regulations, and Sharia principles

8. Commission Structure: Details of compensation, payment terms, and commission calculations

9. Performance Standards: Required performance levels, targets, and quality standards

10. Term and Termination: Duration of agreement, renewal terms, and termination conditions

11. Confidentiality: Protection of confidential information and trade secrets

12. Non-Competition: Restrictions on competing activities during and after the agreement

13. Dispute Resolution: Process for resolving disputes, including jurisdiction and applicable law

14. General Provisions: Standard legal clauses including notices, amendments, and severability

What sections are optional to include in a Seller Agreement?

1. Intellectual Property Rights: Protection and usage of trademarks, patents, and other IP when seller has access to company's intellectual property

2. Training and Support: Details of training programs and ongoing support when company provides extensive training

3. Insurance Requirements: Specific insurance coverage requirements for high-risk products or services

4. Marketing and Advertising: Guidelines for marketing activities when seller is authorized to conduct marketing

5. Product Warranty: Warranty terms and conditions when selling physical products

6. Data Protection: Data handling and privacy requirements when personal data processing is involved

7. Import/Export Compliance: Requirements for international trade when cross-border sales are involved

8. Inventory Management: Stock handling requirements when physical inventory is maintained

9. Sub-contracting: Terms for engaging sub-contractors when permitted by the agreement

What schedules should be included in a Seller Agreement?

1. Schedule 1 - Product List: Detailed list of products or services authorized for sale

2. Schedule 2 - Commission Rates: Detailed commission structure, rates, and calculation methods

3. Schedule 3 - Territory Definition: Specific geographical areas or market segments covered

4. Schedule 4 - Performance Metrics: Detailed KPIs and performance measurement criteria

5. Schedule 5 - Required Documentation: List of required licenses, permits, and compliance documents

6. Schedule 6 - Standard Operating Procedures: Detailed procedures for order processing, reporting, and other operational matters

7. Schedule 7 - Training Requirements: Specific training and certification requirements

8. Appendix A - Reporting Templates: Standard forms and templates for required reports

9. Appendix B - Compliance Checklist: Detailed compliance requirements and verification checklist

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

Retail

E-commerce

Consumer Goods

Electronics

Automotive

Healthcare Products

Industrial Equipment

Fashion and Apparel

Food and Beverage

Construction Materials

Technology

Telecommunications

Home and Garden

Professional Services

Manufacturing

Relevant Teams

Legal

Sales

Compliance

Finance

Operations

Business Development

Commercial

Contract Administration

Risk Management

Supply Chain

Relevant Roles

Sales Director

Commercial Manager

Legal Counsel

Compliance Officer

Business Development Manager

Sales Operations Manager

Channel Manager

Contract Administrator

Chief Commercial Officer

Sales Representative

Account Manager

Regional Sales Manager

Distribution Manager

Procurement Manager

Finance Director

Industries
Commercial Law (Royal Decree No. M/32): Primary legislation governing commercial transactions and business relationships in Saudi Arabia, including basic requirements for commercial contracts
E-Commerce Law (Royal Decree No. M/126): Regulates electronic commercial transactions and provides framework for online selling activities and electronic contracts
Value Added Tax (VAT) Law: Governs the application of VAT on goods and services, including registration requirements and tax obligations for sellers
Anti-Commercial Fraud Law (Royal Decree No. M/19): Protects against commercial fraud and ensures product quality and authenticity in commercial transactions
Competition Law (Royal Decree No. M/75): Regulates fair competition and prevents monopolistic practices in commercial activities
Commercial Agencies Law (Royal Decree No. M/11): Governs commercial agency relationships and distribution agreements in Saudi Arabia
Islamic Sharia Principles: Fundamental principles of Islamic law that govern all contracts and commercial transactions in Saudi Arabia, including prohibition of riba (interest) and gharar (excessive uncertainty)
Consumer Protection Law (Royal Decree No. M/75): Protects consumer rights and establishes obligations for sellers regarding product quality, warranties, and fair trading practices
Commercial Registration Law: Requires businesses to maintain proper registration and licensing for conducting commercial activities
Anti-Money Laundering Law: Establishes requirements for financial transactions and reporting obligations to prevent money laundering
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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