Supply Contract Form for Saudi Arabia

Supply Contract Form Template for Saudi Arabia

A comprehensive legal document governed by Saudi Arabian law and Shariah principles, designed to establish and regulate the commercial relationship between a supplier and purchaser. The contract details the terms and conditions for the supply of goods or materials, including specifications, delivery requirements, pricing structures, and quality standards. It incorporates key provisions required under Saudi commercial law while ensuring compliance with local regulations, including those related to commercial agencies, import/export requirements, and technical standards set by SASO. The document also addresses Islamic finance principles and includes provisions for dispute resolution under Saudi jurisdiction.

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What is a Supply Contract Form?

The Supply Contract Form is a fundamental commercial document used in Saudi Arabia to establish legally binding supply relationships between parties. It is particularly important given Saudi Arabia's position as a major commercial hub and its distinct legal framework combining Shariah law with modern commercial regulations. This document is essential when establishing ongoing supply arrangements, whether for domestic or international trade, and must comply with various Saudi regulations including the Commercial Court Law, Government Tenders and Procurement Law (for government contracts), and SASO requirements. The contract addresses critical aspects such as delivery terms, payment conditions, quality standards, and dispute resolution mechanisms, while ensuring alignment with Islamic principles of commerce. It's commonly used in both private sector transactions and government procurement, requiring careful consideration of local content requirements, Saudization policies, and technical standards.

What sections should be included in a Supply Contract Form?

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

2. Background: Context of the supply arrangement and primary commercial purpose

3. Definitions: Key terms used throughout the agreement, including technical and commercial definitions

4. Scope of Supply: Detailed description of goods/materials to be supplied, including quantities and specifications

5. Delivery Terms: Delivery schedule, locations, packaging requirements, and Incoterms

6. Price and Payment: Pricing structure, payment terms, invoicing requirements, and VAT treatment

7. Quality and Inspection: Quality standards, inspection procedures, and acceptance criteria

8. Warranty: Warranty terms, defect resolution, and remedies for non-conforming goods

9. Title and Risk: Transfer of ownership and risk in the goods

10. Term and Termination: Contract duration, renewal provisions, and termination rights

11. Force Majeure: Events excusing performance and related procedures

12. Compliance: Compliance with Saudi laws, regulations, and Shariah principles

13. Dispute Resolution: Dispute resolution procedures, governing law, and jurisdiction

14. General Provisions: Standard boilerplate clauses including notices, amendments, and entire agreement

What sections are optional to include in a Supply Contract Form?

1. Intellectual Property: Required if the supply involves branded products, technology transfer, or licensed materials

2. Confidentiality: Needed if sensitive information will be exchanged during the supply relationship

3. Insurance: Detailed insurance requirements for high-value or high-risk supplies

4. Performance Bond: Include if security for performance is required

5. Local Content Requirements: Required for contracts subject to Saudi Aramco or government local content requirements

6. Training and Support: Include if supplier must provide training or technical support

7. Spare Parts and After-Sales Service: Relevant for technical equipment or machinery supply

8. Environmental Compliance: Required for supplies involving environmental risks or hazardous materials

9. Import/Export Requirements: Include for international supply arrangements

10. Saudization Requirements: Required if the supply involves service components subject to Saudization

What schedules should be included in a Supply Contract Form?

1. Schedule 1 - Product Specifications: Detailed technical specifications of goods to be supplied

2. Schedule 2 - Pricing Schedule: Detailed pricing, including unit prices and volume-based discounts

3. Schedule 3 - Delivery Schedule: Detailed delivery timeline and locations

4. Schedule 4 - Quality Standards and Testing Procedures: Specific quality requirements and testing protocols

5. Schedule 5 - Service Level Agreement: Performance metrics and service levels if applicable

6. Schedule 6 - Form of Purchase Order: Standard form for ordering under the agreement

7. Schedule 7 - Key Personnel: List of key personnel from both parties responsible for contract management

8. Appendix A - Required Certifications: Copies of required regulatory or quality certifications

9. Appendix B - Insurance Requirements: Detailed insurance coverage requirements and certificates

10. Appendix C - Bank Guarantee Format: Standard format for any required bank guarantees or bonds

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

Jurisdiction

Saudi Arabia

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use

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