Service Agency Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Service Agency Agreement

"I need a Service Agency Agreement for appointing an exclusive agent in Riyadh to represent our technology products and services, with a commission structure of 10% on all sales and a minimum performance target of SAR 2 million annually, starting March 1, 2025."

Document background
The Service Agency Agreement is a crucial document for businesses operating in Saudi Arabia who wish to appoint a service agent to represent their interests or provide specific services in the Kingdom. This agreement type is particularly important given Saudi Arabia's regulatory framework, which requires certain types of foreign businesses to work with local agents. The document ensures compliance with the Commercial Agency Law (Royal Decree No. M/11) and other relevant Saudi regulations while protecting both parties' interests. It typically includes detailed provisions for service scope, territorial rights, compensation, compliance requirements, and dispute resolution mechanisms, all structured to align with both Saudi law and Sharia principles. The agreement is essential for establishing clear operational parameters and maintaining a legally compliant business relationship in the Saudi market.
Suggested Sections

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

2. Background: Context of the agreement, relationship between parties, and general purpose of the agency arrangement

3. Definitions and Interpretation: Key terms used throughout the agreement, including interpretation rules and language governance

4. Appointment and Scope: Formal appointment of agent, territory definition, and detailed scope of services

5. Term and Renewal: Duration of the agreement and conditions for renewal

6. Agent's Rights and Obligations: Detailed responsibilities, performance standards, and authority limits of the agent

7. Principal's Rights and Obligations: Principal's commitments, support provisions, and obligations to the agent

8. Compensation and Payment Terms: Commission structure, payment terms, and calculation methods

9. Compliance and Reporting: Regulatory compliance requirements, regular reporting obligations, and record-keeping

10. Confidentiality: Protection of confidential information and trade secrets

11. Non-Competition and Non-Solicitation: Restrictions on competitive activities and client solicitation

12. Termination: Grounds for termination, notice requirements, and consequences

13. Post-Termination Obligations: Duties and responsibilities after agreement termination

14. Governing Law and Dispute Resolution: Saudi law governance and dispute resolution mechanisms

15. General Provisions: Standard clauses including force majeure, notices, and amendments

Optional Sections

1. Intellectual Property Rights: Include when the agent will handle branded products or use principal's IP

2. Training and Support: Include when principal provides specific training or technical support

3. Performance Targets: Include when setting specific sales or performance metrics

4. Insurance Requirements: Include when specific insurance coverage is required

5. Bank Guarantee: Include when financial security is required from the agent

6. Marketing and Promotion: Include when agent has specific marketing responsibilities

7. Sub-Agents: Include when agent is permitted to appoint sub-agents

8. Data Protection: Include when personal data processing is involved

9. Shariah Compliance: Include specific provisions when dealing with financial services or banking

Suggested Schedules

1. Schedule 1 - Services Description: Detailed description of services to be provided by the agent

2. Schedule 2 - Territory Definition: Detailed description of geographical territory and any exclusions

3. Schedule 3 - Commission Structure: Detailed breakdown of commission calculations and payment terms

4. Schedule 4 - Performance Metrics: Specific KPIs and performance evaluation criteria

5. Schedule 5 - Required Reports: Templates and specifications for required periodic reports

6. Schedule 6 - Compliance Requirements: Specific regulatory and compliance requirements

7. Schedule 7 - Contact Details: Key contact persons and communication protocols

8. Appendix A - Power of Attorney: If required, formal power of attorney document

9. Appendix B - Required Licenses: Copies of mandatory licenses and registrations

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

Manufacturing

Technology

Consumer Goods

Industrial Equipment

Healthcare

Automotive

Construction

Professional Services

Telecommunications

Energy

Chemical

Retail

Logistics

Financial Services

Pharmaceuticals

Relevant Teams

Legal

Commercial

Business Development

Compliance

Operations

Senior Management

Sales

Regulatory Affairs

Corporate Secretariat

Risk Management

International Business

Contract Administration

Relevant Roles

Legal Counsel

Commercial Director

Business Development Manager

Compliance Officer

Country Manager

Managing Director

Operations Director

Contract Manager

Regional Director

Chief Executive Officer

Chief Legal Officer

Sales Director

General Manager

Regulatory Affairs Manager

Company Secretary

Industries
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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