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Simplified Distribution Contract

Simplified Distribution Contract Template for Saudi Arabia

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Key Requirements PROMPT example:

Simplified Distribution Contract

"I need a Simplified Distribution Contract for appointing an exclusive distributor in Riyadh for our consumer electronics products, with the agreement to commence on March 1, 2025, including minimum purchase requirements and local warranty support obligations."

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Document background
The Simplified Distribution Contract is specifically designed for use in the Saudi Arabian market where distribution relationships must comply with both civil law requirements and Sharia principles. This document is particularly useful for companies seeking to establish distribution channels in Saudi Arabia without the complexity of a full-scale distribution agreement. It covers essential elements required by Saudi Commercial Agency Law while remaining flexible enough to accommodate various business models. The agreement is typically used when a supplier wishes to appoint a distributor in Saudi Arabia for their products or services, requiring a straightforward yet legally compliant framework that addresses key commercial terms, regulatory requirements, and risk allocation. It's especially suitable for medium-sized transactions or relationships where parties prefer a more streamlined approach while maintaining legal enforceability.
Suggested Sections

1. Parties: Identification of the parties, including full legal names, commercial registration numbers, and addresses

2. Background: Context of the distribution arrangement and brief description of each party's business

3. Definitions: Key terms used throughout the agreement, including Territory, Products, and other important concepts

4. Appointment and Scope: Terms of distributor appointment, whether exclusive or non-exclusive, and territorial scope

5. Term and Termination: Duration of the agreement and circumstances under which it can be terminated

6. Distributor Obligations: Core responsibilities including minimum purchase requirements, marketing efforts, and reporting obligations

7. Supplier Obligations: Responsibilities including product supply, support, and training commitments

8. Pricing and Payment Terms: Product pricing structure, payment terms, and currency specifications

9. Intellectual Property Rights: Usage rights for trademarks, branding, and other intellectual property

10. Confidentiality: Protection of confidential information exchanged between parties

11. Governing Law and Jurisdiction: Specification of Saudi Arabian law as governing law and jurisdiction for disputes

12. Force Majeure: Provisions for unforeseen circumstances preventing contract performance

13. Notices: Process and addresses for formal communications between parties

Optional Sections

1. Non-Competition: Restrictions on distributor's ability to represent competing products - include when exclusivity is important

2. Performance Targets: Specific sales targets and consequences for missing them - include for performance-driven relationships

3. Training and Support: Detailed provisions for technical support and training - include for complex products

4. Insurance: Insurance requirements for the distributor - include for high-value or high-risk products

5. Compliance with Laws: Specific compliance obligations including anti-corruption - include for regulated industries

6. Data Protection: Provisions for handling customer data - include if personal data is processed

7. Post-Termination Obligations: Detailed provisions for wind-down period - include for complex distribution relationships

8. Bank Guarantee: Requirements for financial security - include for high-value contracts or new business relationships

Suggested Schedules

1. Schedule 1 - Products: Detailed list of products covered by the agreement, including specifications and prices

2. Schedule 2 - Territory: Detailed definition of the geographical territory, including any excluded areas

3. Schedule 3 - Minimum Purchase Requirements: Specific quantities or values of required purchases, often broken down by period

4. Schedule 4 - Commercial Terms: Detailed pricing, payment terms, and delivery conditions

5. Schedule 5 - Technical Requirements: Product storage, handling, and quality control requirements

6. Schedule 6 - Authorized Sub-distributors: List of approved sub-distributors if permitted under the agreement

7. Schedule 7 - Service Level Requirements: Specific performance metrics and service standards

8. Appendix A - Trademark Usage Guidelines: Specific rules for use of supplier's trademarks and branding

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Agreement
Applicable Laws
Business Day
Commencement Date
Confidential Information
Contract Year
Distributor
Effective Date
Force Majeure Event
Initial Term
Intellectual Property Rights
Minimum Purchase Requirements
Notice
Products
Purchase Order
Quarter
Renewal Term
Saudi Arabia
Sharia
Specifications
Supplier
Term
Territory
Trademarks
Working Hours
Zakat
VAT
Marketing Materials
Net Sales
Payment Terms
Performance Targets
Price List
Quality Standards
Related Party
Sales Report
Stock Requirements
Sub-distributor
Technical Documentation
Trade Terms
Warranty Period
Clauses
Parties
Recitals
Definitions
Appointment
Territory
Term and Duration
Product Supply
Pricing and Payment
Minimum Purchase Requirements
Delivery Terms
Title and Risk
Marketing and Promotion
Intellectual Property
Performance Obligations
Exclusivity
Training and Support
Quality Control
Compliance
Record Keeping
Audit Rights
Confidentiality
Non-Competition
Warranties
Indemnification
Force Majeure
Termination
Post-Termination
Governing Law
Dispute Resolution
Notices
Assignment
Amendment
Entire Agreement
Severability
Waiver
Language
Counterparts
Relevant Industries

Consumer Goods

Electronics and Technology

Automotive

Healthcare and Pharmaceuticals

Industrial Equipment

Food and Beverage

Construction Materials

Fashion and Retail

Telecommunications

Home Appliances

Software and Digital Products

Manufacturing

Relevant Teams

Legal

Commercial

Sales

Business Development

Operations

Supply Chain

Compliance

International Trade

Distribution

Procurement

Relevant Roles

Commercial Director

Sales Manager

Business Development Manager

Legal Counsel

Contracts Manager

Distribution Manager

Country Manager

Chief Commercial Officer

Operations Director

Supply Chain Manager

Regional Sales Director

Compliance Officer

General Manager

Import/Export Manager

Industries
Commercial Agencies Law (Royal Decree No. M/11 of 1962): Primary legislation governing commercial agency and distributorship relationships in Saudi Arabia, including registration requirements and rights of distributors
Companies Law (Royal Decree No. M/3 of 2015): Regulates business entities and commercial operations in Saudi Arabia, providing framework for business relationships and obligations
Competition Law (Royal Decree No. M/75 of 2019): Ensures fair competition and prevents monopolistic practices in distribution agreements
Commercial Courts Law (Royal Decree No. M/93 of 2020): Governs commercial dispute resolution and enforcement of contracts in Saudi Arabia
Electronic Commerce Law (Royal Decree No. M/126 of 2019): Relevant if the distribution agreement includes online sales or electronic transactions
Sharia Law Principles: Fundamental Islamic legal principles that govern all contracts in Saudi Arabia, including prohibitions on uncertainty (gharar) and usury (riba)
Value Added Tax Law (Royal Decree No. M/113 of 2017): Relevant for financial aspects of the distribution agreement and tax obligations
Anti-Commercial Fraud Law (Royal Decree No. M/19 of 2008): Protects against counterfeit goods and ensures product authenticity in distribution chains
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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