Subcontractor Work Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Subcontractor Work Agreement

"I need a Subcontractor Work Agreement for a major solar power plant construction project in Riyadh, Saudi Arabia, with particular focus on local content requirements and environmental compliance, to be executed starting March 2025."

Document background
The Subcontractor Work Agreement is a crucial document used in Saudi Arabia when a main contractor needs to delegate specific portions of a project to specialized service providers. It's particularly important in complex projects where specialized expertise or additional workforce capacity is required. The agreement must comply with Saudi Arabian regulations, including the Saudi Labor Law, Commercial Law, and relevant industry-specific regulations. This document typically includes detailed specifications of work scope, quality standards, payment structures, and performance requirements, while ensuring compliance with local content requirements where applicable. The agreement should be structured to protect both parties' interests while maintaining alignment with Sharia law principles and Saudi Arabian business practices. It's essential for managing project risks, establishing clear accountability, and ensuring successful project delivery within the Saudi Arabian legal framework.
Suggested Sections

1. Parties: Identification of the main contractor and subcontractor, including full legal names, commercial registration numbers, and authorized representatives

2. Background: Context of the main contract, project details, and the reason for subcontracting

3. Definitions: Definitions of key terms used throughout the agreement

4. Scope of Work: Detailed description of the works to be performed by the subcontractor

5. Duration and Timeline: Project timeline, completion dates, and milestones

6. Payment Terms: Payment amount, schedule, method, and conditions for payment

7. Performance Standards: Quality requirements, technical standards, and acceptance criteria

8. Subcontractor Obligations: Key responsibilities including labor, materials, equipment, and compliance requirements

9. Main Contractor Obligations: Main contractor's responsibilities including site access, information provision, and coordination

10. Health and Safety: Safety requirements, procedures, and compliance with local regulations

11. Insurance and Liability: Required insurance coverage and allocation of risks between parties

12. Warranties and Guarantees: Workmanship warranties, performance guarantees, and quality assurance

13. Termination: Grounds for termination, procedures, and consequences

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

15. General Provisions: Standard contractual clauses including notices, amendments, and entire agreement

Optional Sections

1. Confidentiality: Required when sensitive information will be shared during the project

2. Intellectual Property Rights: Needed when the work involves creation of designs, software, or other IP

3. Force Majeure: Detailed force majeure provisions for high-risk or long-term projects

4. Environmental Compliance: Required for projects with environmental impact considerations

5. Local Content Requirements: Necessary when project falls under Saudi Aramco or government requirements for local content

6. Security Requirements: For projects involving sensitive locations or information

7. Training and Knowledge Transfer: When local workforce development is part of the project requirements

8. Equipment and Materials Supply: Detailed provisions when substantial equipment or materials are being supplied

9. Performance Bonds: When additional financial security is required for the project

Suggested Schedules

1. Schedule 1 - Scope of Work: Detailed technical specifications and requirements

2. Schedule 2 - Bill of Quantities: Itemized list of work items and their quantities

3. Schedule 3 - Payment Schedule: Detailed breakdown of payment milestones and amounts

4. Schedule 4 - Project Timeline: Detailed project schedule with milestones and deadlines

5. Schedule 5 - Key Personnel: List of key personnel from both parties with roles and responsibilities

6. Schedule 6 - Required Insurances: Detailed insurance requirements and coverage limits

7. Schedule 7 - HSE Requirements: Detailed health, safety, and environmental requirements

8. Schedule 8 - Quality Assurance Plan: Quality control procedures and requirements

9. Appendix A - Forms and Templates: Standard forms for notices, requests, and approvals

10. Appendix B - Site Rules and Procedures: Site-specific rules and procedures to be followed

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

Construction

Engineering

Oil & Gas

Infrastructure

Manufacturing

Technology

Telecommunications

Mining

Energy

Industrial Services

Facilities Management

Real Estate Development

Transportation

Utilities

Relevant Teams

Legal

Procurement

Operations

Commercial

Finance

Project Management

Risk & Compliance

Health & Safety

Quality Assurance

Technical Services

Contract Administration

Business Development

Relevant Roles

Project Manager

Contract Manager

Legal Counsel

Procurement Manager

Operations Director

Construction Manager

Technical Director

Chief Engineer

Commercial Manager

Risk Manager

Compliance Officer

HSE Manager

Quality Assurance Manager

Site Supervisor

Finance Director

Business Development Manager

Industries
Saudi Labor Law (Royal Decree No. M/51): Primary legislation governing employment relationships, working conditions, and labor rights in Saudi Arabia. Relevant for worker protection, working hours, and employment terms.
Government Tenders and Procurement Law (Royal Decree No. M/128): Regulates government procurement processes and subcontracting requirements for public projects. Sets standards for contractor qualification and performance.
Commercial Courts Law (Royal Decree No. M/93): Governs commercial disputes and contract enforcement, relevant for dispute resolution clauses and commercial relationship aspects.
Saudi Building Code (SBC): Establishes technical standards and requirements for construction work, which subcontractors must comply with in their scope of work.
Occupational Safety and Health Regulations: Mandates safety requirements and standards that must be followed in construction and technical work environments.
Value Added Tax (VAT) Law: Regulates tax obligations and requirements for business transactions and services provided by subcontractors.
Foreign Investment Law (Royal Decree No. M/1): Relevant if the subcontractor is a foreign entity, governing foreign business operations in Saudi Arabia.
Commercial Registration Law: Stipulates requirements for business registration and licensing, ensuring subcontractors are properly authorized to conduct business.
Saudi Contract Law (derived from Sharia Law): Provides the fundamental principles for contract formation, validity, and enforcement under Saudi law.
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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