��������Ƶ

A Project-Based Contract outlines the terms for completing a specific project in Saudi Arabia, with payment tied to reaching defined milestones or deliverables. These agreements are especially common in construction, IT, and consulting sectors, where clients need precise control over project scope and outcomes.

Under Saudi commercial law, these contracts must clearly specify the project timeline, payment schedule, and performance standards. They differ from traditional employment contracts because they focus on project completion rather than ongoing work relationships, and typically end once the defined objectives are met. This structure helps both parties manage risks while ensuring compliance with local labor regulations.

Use a Project-Based Contract when you need specialized expertise or services for a defined goal in Saudi Arabia—like building a new facility, developing custom software, or managing a marketing campaign. This agreement works perfectly for time-bound initiatives where you need clear deliverables and milestone-based payments.

The contract becomes essential when working with external consultants, contractors, or service providers, especially for projects exceeding SAR 500,000. It helps navigate Saudi labor laws while protecting both parties through detailed scope definitions, quality standards, and payment terms. This structure proves particularly valuable for complex projects requiring multiple phases or specialized technical expertise.

• Fixed-Price Project Contracts: Set a predetermined total cost for the entire project scope, common in construction and IT projects across Saudi Arabia
• Time-and-Materials Contracts: Bill based on actual hours worked plus material costs, ideal for projects with uncertain scope or evolving requirements
• Milestone-Based Contracts: Link payments to specific project achievements, popular in consulting and development projects
• Cost-Plus Contracts: Cover actual costs plus an agreed profit margin, typically used in large-scale industrial or infrastructure projects
• Unit-Price Contracts: Price work by measurable units, common in maintenance and renovation projects under Saudi procurement rules

• Project Owners: Saudi companies, government entities, or private organizations who commission and fund the project
• Contractors: Professional service providers, construction firms, or consultants who execute the project deliverables
• Legal Counsel: In-house or external lawyers who draft and review Project-Based Contracts to ensure compliance with Saudi law
• Project Managers: Professionals who oversee contract implementation and milestone completion
• Finance Teams: Staff responsible for managing payment schedules and financial compliance
• Technical Experts: Specialists who define project specifications and quality standards within the contract

• Project Scope: Define detailed deliverables, technical specifications, and quality standards expected
• Timeline Planning: Map out project phases, milestones, and completion deadlines aligned with Saudi working calendars
• Budget Details: Calculate all costs, payment schedules, and any penalties for delays or non-performance
• Party Information: Gather complete legal names, commercial registration numbers, and authorized signatories
• Performance Metrics: Establish clear success criteria and measurement methods
• Risk Assessment: Identify potential challenges and include appropriate mitigation clauses under Saudi law
• Compliance Check: Ensure alignment with local labor laws and industry-specific regulations

• Party Details: Full legal names, commercial registration numbers, and authorized representatives
• Project Scope: Detailed description of deliverables, specifications, and quality standards
• Payment Terms: Clear payment schedule, amounts in Saudi Riyals, and milestone-linked disbursements
• Timeline: Project start date, completion date, and specific milestone deadlines
• Termination Clauses: Conditions for contract ending and dispute resolution mechanisms
• Force Majeure: Provisions aligned with Saudi commercial law for unforeseen circumstances
• Governing Law: Explicit reference to Saudi Arabian law and jurisdiction
• Confidentiality: Data protection and information handling requirements

A Project-Based Contract differs significantly from an Employment Contract in several key ways, particularly under Saudi labor law. While both involve work arrangements, their fundamental structures and legal implications vary considerably.

• Duration and Scope: Project-Based Contracts focus on specific deliverables with a clear end date, while Employment Contracts establish ongoing work relationships
• Benefits and Protection: Employment Contracts must include statutory benefits like end-of-service awards and leave entitlements; Project-Based Contracts typically exclude these
• Payment Structure: Project contracts usually link payment to milestones or deliverables, whereas employment agreements specify regular salaries
• Legal Framework: Project contracts fall under commercial law, while employment contracts are governed by Saudi labor regulations
• Management Control: Employment agreements establish direct supervisory relationships; project contracts maintain contractor independence