Vendor Supplier Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Vendor Supplier Agreement

"I need a Vendor Supplier Agreement for my Saudi-based manufacturing company to engage with multiple international suppliers of industrial equipment, with specific focus on compliance with local content requirements and including provisions for technical support and maintenance services."

Document background
The Vendor Supplier Agreement is a fundamental commercial document used to establish and manage supply relationships in Saudi Arabia. It is particularly important given the kingdom's unique legal framework, which combines modern commercial law with Shariah principles. This agreement is essential when a company needs to establish a formal, long-term supply arrangement with vendors, whether local or international, operating within Saudi Arabia. The document addresses crucial aspects such as commercial terms, regulatory compliance, local content requirements, and Saudization policies. It includes specific provisions required under Saudi law while maintaining international commercial standards. The agreement is designed to protect both parties' interests while ensuring compliance with Saudi Arabian regulations and commercial practices.
Suggested Sections

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

2. Background: Context of the agreement and general relationship between the parties

3. Definitions: Key terms used throughout the agreement, including Arabic translations where necessary

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

5. Term and Renewal: Duration of the agreement and renewal mechanisms

6. Ordering Process: Procedures for placing and accepting orders, including minimum order quantities if applicable

7. Pricing and Payment: Price structure, payment terms, and invoicing requirements (ensuring Shariah compliance)

8. Delivery and Acceptance: Delivery terms, timelines, inspection rights, and acceptance procedures

9. Quality Requirements: Quality standards, warranties, and compliance with Saudi specifications

10. Compliance with Laws: Obligation to comply with Saudi laws, including labor laws and Saudization requirements

11. Confidentiality: Protection of confidential information and trade secrets

12. Liability and Indemnification: Allocation of risks and responsibilities between parties

13. Force Majeure: Events excusing performance, including reference to pandemic situations

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

15. Dispute Resolution: Process for resolving disputes, typically through Saudi courts or arbitration

16. Governing Law: Explicit reference to Saudi law and Shariah principles as governing law

17. Notices: Format and method of delivering formal notices between parties

Optional Sections

1. Insurance: Required when supply involves high-value goods or on-site services

2. Intellectual Property: Necessary when supply involves software, technology or branded products

3. Export/Import Compliance: Required for international suppliers or cross-border transactions

4. Performance Guarantees: Include when specific performance levels need to be maintained

5. Environmental Compliance: Necessary for supplies involving environmental impacts or hazardous materials

6. Training and Support: Include when supplier must provide training or ongoing support

7. Exclusivity: Optional provisions for exclusive supply arrangements

8. Local Content Requirements: Include when subject to specific Saudi local content requirements

9. Change Control: Required for long-term agreements or complex supply arrangements

10. Business Continuity: Important for critical supply arrangements

Suggested Schedules

1. Schedule 1 - Products/Services Specification: Detailed technical specifications of goods/services to be supplied

2. Schedule 2 - Pricing Schedule: Detailed pricing structure, including any volume discounts or price adjustment mechanisms

3. Schedule 3 - Service Levels: Performance metrics and service level requirements

4. Schedule 4 - Key Personnel: Details of key supplier personnel responsible for contract management

5. Schedule 5 - Delivery Locations: List of approved delivery locations and specific requirements

6. Schedule 6 - Quality Control Procedures: Detailed quality control and testing procedures

7. Schedule 7 - Forms and Templates: Standard forms for purchase orders, acceptance certificates, etc.

8. Schedule 8 - Compliance Requirements: Specific regulatory or industry compliance requirements

9. Appendix A - Insurance Requirements: Detailed insurance coverage requirements and minimum limits

10. Appendix B - HSE Requirements: Health, safety and environmental requirements for supply activities

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

Retail

Oil & Gas

Construction

Technology

Healthcare

Automotive

Food & Beverage

Telecommunications

Industrial Equipment

Pharmaceuticals

Electronics

Chemical Industry

Consumer Goods

Relevant Teams

Legal

Procurement

Supply Chain

Finance

Operations

Compliance

Risk Management

Quality Assurance

Commercial

Vendor Management

Contract Administration

Relevant Roles

Procurement Manager

Supply Chain Director

Legal Counsel

Commercial Manager

Contracts Administrator

Vendor Relations Manager

Compliance Officer

Operations Director

Quality Assurance Manager

Finance Director

Risk Manager

Sourcing Specialist

Chief Financial Officer

General Counsel

Supply Chain Analyst

Industries
Commercial Law (Royal Decree No. M/32): Primary legislation governing commercial transactions and business relationships in Saudi Arabia, including basic contractual obligations and commercial rules
Commercial Agencies Law (Royal Decree No. M/11): Regulates relationships between foreign suppliers and local distributors/agents, including registration requirements and obligations
Government Tenders and Procurement Law (Royal Decree No. M/128): Relevant if the vendor will be supplying to government entities, setting out specific requirements and procedures
Value Added Tax (VAT) Law: Governs the application of VAT on goods and services, including invoicing requirements and tax obligations
Anti-Commercial Fraud Law (Royal Decree No. M/19): Provides protection against fraudulent commercial practices and ensures quality standards in goods and services
Electronic Transactions Law (Royal Decree No. M/18): Governs electronic communications, signatures, and records in commercial transactions
Foreign Investment Law (Royal Decree No. M/1): Regulates foreign investment in Saudi Arabia, including licensing requirements and restrictions
Competition Law (Royal Decree No. M/75): Ensures fair competition and prevents monopolistic practices in commercial relationships
Saudi Labor Law (Royal Decree No. M/51): Relevant for aspects of the agreement that might involve staffing, Saudization requirements, or on-site personnel
Islamic Law (Shariah) Principles: Fundamental principles that govern all contracts in Saudi Arabia, including prohibition of interest (riba) and uncertainty (gharar)
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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