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Commercial Purchase Agreement for Saudi Arabia

Commercial Purchase Agreement Template for Saudi Arabia

A comprehensive legal document governed by Saudi Arabian law that establishes the terms and conditions for the purchase of goods or services between commercial entities. This agreement incorporates requirements from both Sharia law principles and Saudi commercial regulations, including the Commercial Court Law and Law of Commerce. It details essential elements such as product specifications, pricing, delivery terms, quality standards, warranties, and dispute resolution mechanisms, while ensuring compliance with local legal requirements including VAT regulations and anti-fraud provisions.

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What is a Commercial Purchase Agreement?

The Commercial Purchase Agreement serves as a fundamental legal instrument for business transactions in Saudi Arabia, establishing clear terms and conditions for the purchase of goods or services between commercial entities. This document is essential when businesses engage in significant or recurring purchase transactions that require formal documentation and legal protection. It addresses key aspects such as product specifications, pricing, delivery terms, warranties, and compliance with both Sharia principles and Saudi commercial regulations. The agreement is particularly important in the Saudi context as it must balance international commercial practices with local legal requirements, including the Commercial Court Law, VAT regulations, and anti-fraud provisions. It provides a structured framework for managing commercial relationships while ensuring enforceability under Saudi jurisdiction.

What sections should be included in a Commercial Purchase Agreement?

1. Parties: Identification of buyer and seller with full legal names, commercial registration numbers, and authorized representatives

2. Background: Context of the transaction and relationship between the parties

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

4. Scope of Purchase: Detailed description of goods/services being purchased, including specifications and quantities

5. Price and Payment Terms: Purchase price, payment schedule, currency, and payment methods, including VAT considerations

6. Delivery Terms: Delivery schedule, location, shipping terms, and transfer of risk (incorporating Incoterms if applicable)

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

8. Warranties and Representations: Standard warranties regarding product quality, compliance with laws, and authority to enter into agreement

9. Term and Termination: Duration of agreement and circumstances allowing early termination

10. Compliance with Laws: Commitment to comply with Saudi laws, including Sharia principles

11. Confidentiality: Protection of confidential information exchanged during the transaction

12. Dispute Resolution: Process for resolving disputes, including jurisdiction and governing law provisions

13. Force Majeure: Events excusing performance, aligned with Saudi law principles

14. Notices: Method and addresses for formal communications between parties

15. General Provisions: Standard boilerplate clauses including entire agreement, amendments, and assignment

What sections are optional to include in a Commercial Purchase Agreement?

1. Insurance: Required when dealing with high-value goods or specific risk factors

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

3. Training and Support: Include when the purchase requires after-sales support or training services

4. Import/Export Compliance: Required for international transactions involving customs clearance

5. Performance Bond: Include when security for performance is required, especially in high-value transactions

6. Anti-Corruption: Detailed compliance provisions for transactions with government entities or high-risk sectors

7. Environmental Compliance: Required when dealing with goods that have environmental implications

8. Subcontracting: Include when seller may need to subcontract certain obligations

9. Change Control: Necessary for long-term or complex purchase arrangements where specifications may change

What schedules should be included in a Commercial Purchase Agreement?

1. Schedule 1 - Product Specifications: Detailed technical specifications of products being purchased

2. Schedule 2 - Pricing Schedule: Detailed breakdown of prices, including unit prices and volume discounts

3. Schedule 3 - Delivery Schedule: Detailed timeline for deliveries, especially for multiple shipments

4. Schedule 4 - Quality Standards: Specific quality requirements and testing procedures

5. Schedule 5 - Service Level Agreement: Performance metrics for any service components

6. Appendix A - Form of Purchase Order: Standard form for issuing purchase orders under the agreement

7. Appendix B - Acceptance Test Procedures: Detailed procedures for testing and accepting deliveries

8. Appendix C - Required Certifications: List of required regulatory or quality certifications

9. Appendix D - Contact Details: Key contract management personnel and escalation matrix

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Saudi Arabia

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions

















































Clauses















































Relevant Industries

Manufacturing

Retail

Technology

Construction

Healthcare

Energy

Automotive

Consumer Goods

Industrial Equipment

Telecommunications

Food and Beverage

Pharmaceuticals

Electronics

Logistics

Chemical Industry

Relevant Teams

Legal

Procurement

Finance

Operations

Supply Chain

Compliance

Risk Management

Commercial

Quality Control

Logistics

Business Development

Contract Administration

Relevant Roles

Procurement Manager

Legal Counsel

Commercial Director

Supply Chain Manager

Contract Administrator

Chief Financial Officer

Operations Manager

Compliance Officer

Risk Manager

Business Development Manager

General Counsel

Purchase Officer

Finance Director

Quality Control Manager

Logistics Manager

Industries









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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