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Construction Subcontractor Agreement for Saudi Arabia

Construction Subcontractor Agreement Template for Saudi Arabia

A comprehensive legal agreement governed by Saudi Arabian law that establishes the terms and conditions between a main contractor and a subcontractor for the execution of specific construction works. The agreement incorporates local regulatory requirements, including compliance with Sharia law principles, Saudi building codes, labor laws, and health and safety regulations. It details the scope of work, payment terms, timelines, quality standards, and dispute resolution mechanisms while ensuring alignment with Saudi Arabian construction industry practices and legal framework.

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Construction Subcontractor Agreement

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What is a Construction Subcontractor Agreement?

The Construction Subcontractor Agreement is essential for projects in Saudi Arabia where main contractors need to delegate specific construction works to specialized subcontractors. This document is crucial for establishing clear contractual relationships in compliance with Saudi Arabian law, including Sharia principles and local construction regulations. It is typically used when a main contractor wants to subcontract specific portions of their scope, such as mechanical, electrical, or specialized construction works. The agreement encompasses key elements including scope definition, payment mechanisms, performance requirements, and risk allocation, while ensuring compliance with Saudi building codes, labor laws, and safety regulations. This document type is particularly important given the complex nature of construction projects in Saudi Arabia and the need for clear documentation of rights, obligations, and responsibilities between contracting parties.

What sections should be included in a Construction Subcontractor Agreement?

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

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

3. Definitions: Key terms used throughout the agreement, including technical construction terms and contract-specific definitions

4. Scope of Work: Detailed description of the subcontracted works, including specifications, standards, and deliverables

5. Contract Price and Payment Terms: Subcontract value, payment schedule, retention amounts, and payment procedures in compliance with Saudi law

6. Duration and Timeline: Project schedule, completion dates, milestones, and provisions for extensions of time

7. Subcontractor Obligations: Key responsibilities including labor, materials, equipment, safety compliance, and quality standards

8. Main Contractor Obligations: Responsibilities including site access, coordination, information provision, and payment obligations

9. Quality Control and Inspection: Quality standards, inspection procedures, and acceptance criteria

10. Health, Safety and Environmental Requirements: HSE compliance requirements, reporting procedures, and incident management

11. Insurance and Indemnities: Required insurance coverage and indemnification obligations

12. Performance Security: Requirements for performance bonds or guarantees

13. Variations: Procedures for handling changes to scope, pricing, or timeline

14. Suspension and Termination: Grounds and procedures for work suspension and contract termination

15. Dispute Resolution: Dispute resolution procedures compliant with Saudi law, including arbitration provisions

16. General Provisions: Standard legal provisions including notices, assignment, and governing law

What sections are optional to include in a Construction Subcontractor Agreement?

1. Materials Supply: Detailed provisions for materials procurement and supply when the subcontractor is responsible for significant material procurement

2. Equipment Provision: Specific provisions regarding equipment supply and maintenance when significant equipment is involved

3. Design Obligations: Additional provisions when the subcontractor has design responsibilities

4. Interface Management: Specific provisions for coordination with other subcontractors when multiple subcontractors are involved

5. Local Content Requirements: Specific provisions addressing Saudization and local content requirements for larger projects

6. Intellectual Property Rights: Provisions for IP rights when the scope includes design or innovative construction methods

7. Advance Payment: Terms for advance payment when applicable, including bank guarantee requirements

8. Force Majeure: Detailed force majeure provisions for high-risk or long-duration projects

What schedules should be included in a Construction Subcontractor Agreement?

1. Schedule 1 - Scope of Works: Detailed technical specifications and drawings for the subcontracted works

2. Schedule 2 - Bill of Quantities: Detailed breakdown of quantities and rates for the works

3. Schedule 3 - Program of Works: Detailed project timeline, milestones, and completion dates

4. Schedule 4 - Payment Schedule: Detailed payment terms, milestone payments, and payment procedures

5. Schedule 5 - Key Personnel: List of key personnel and their qualifications

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

7. Schedule 7 - Forms of Bonds and Guarantees: Templates for required performance bonds and guarantees

8. Schedule 8 - HSE Requirements: Detailed health, safety, and environmental requirements

9. Schedule 9 - Quality Assurance Requirements: Detailed quality control procedures and standards

10. Schedule 10 - Required Submittals: List of required technical submittals and approval procedures

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

Construction

Infrastructure

Real Estate Development

Oil & Gas Construction

Industrial Construction

Commercial Construction

Residential Construction

Healthcare Construction

Educational Facilities

Hospitality Construction

Religious Buildings Construction

Transportation Infrastructure

Energy Infrastructure

Relevant Teams

Legal

Procurement

Operations

Commercial

Finance

Risk Management

Compliance

Engineering

Project Management

Construction Management

Health Safety Environment

Quality Assurance

Contract Administration

Business Development

Relevant Roles

Construction Manager

Project Manager

Contract Manager

Legal Counsel

Procurement Manager

Commercial Manager

Operations Director

Technical Director

Site Supervisor

QA/QC Manager

HSE Manager

Finance Manager

Risk Manager

Compliance Officer

Chief Executive Officer

Managing Director

Engineering Manager

Quantity Surveyor

Cost Controller

Business Development 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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