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Frame Agreement for Saudi Arabia

Frame Agreement Template for Saudi Arabia

A Frame Agreement governed by Saudi Arabian law establishes a long-term contractual framework between parties for recurring business transactions. This document sets out the principal terms and conditions that will govern subsequent specific agreements or purchase orders, while ensuring compliance with Saudi regulations and Sharia principles. It includes provisions for pricing mechanisms, service delivery standards, compliance requirements, and dispute resolution procedures, all structured to accommodate both local and international business practices while maintaining adherence to Saudi Arabian legal requirements.

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What is a Frame Agreement?

The Frame Agreement serves as a master agreement template designed for use in Saudi Arabia, establishing the foundational terms and conditions for ongoing business relationships between parties. It is particularly useful when parties anticipate multiple transactions or services over time and want to avoid negotiating separate agreements for each instance. The document must comply with Saudi Arabian law and Sharia principles while incorporating international best practices. This Frame Agreement typically includes mechanisms for subsequent purchase orders or specific agreements, pricing structures, performance standards, and compliance requirements. It's especially valuable for businesses establishing long-term partnerships in Saudi Arabia, whether in government contracts, private sector collaborations, or international business relationships.

What sections should be included in a Frame Agreement?

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

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

3. Definitions: Key terms used throughout the agreement, including terms specific to the business relationship and Saudi law concepts

4. Scope of Agreement: General framework of cooperation, types of goods/services covered, and relationship structure

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

6. Call-off Procedures: Process for placing specific orders or entering into individual agreements under the framework

7. Pricing and Payment Terms: General pricing principles, payment mechanisms, and compliance with Sharia principles

8. Obligations of the Parties: General responsibilities and commitments of each party

9. Quality and Performance Standards: Minimum standards and requirements for goods/services

10. Compliance with Laws: Obligation to comply with Saudi laws, regulations, and Sharia principles

11. Confidentiality: Protection of confidential information and trade secrets

12. Intellectual Property: Ownership and usage rights of IP under the framework

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

14. Force Majeure: Events excusing performance and their consequences

15. Termination: Grounds and procedures for termination of the framework agreement

16. Dispute Resolution: Mechanism for resolving disputes, typically referencing Saudi courts or arbitration

17. Governing Law: Explicit reference to Saudi law and Sharia principles as governing law

18. General Provisions: Standard boilerplate clauses adapted to Saudi law requirements

What sections are optional to include in a Frame Agreement?

1. Insurance: Required when specific insurance coverage is needed for high-risk activities or valuable goods

2. Performance Guarantees: Used when additional security for performance is required, such as bank guarantees

3. Exclusivity: Include when parties agree to exclusive arrangements in specific territories or for specific products

4. Change Control: Needed for complex relationships requiring formal processes for changes to services or products

5. Service Levels: Required when specific performance metrics need to be maintained

6. Personnel Requirements: Include when specific staffing or Saudization requirements apply

7. Anti-Corruption: Important for international parties or government-related contracts

8. Data Protection: Required when personal data processing is involved

9. Environmental Compliance: Include for activities with environmental impact

10. Import/Export Compliance: Necessary for international trade activities

What schedules should be included in a Frame Agreement?

1. Schedule 1 - Pricing Schedule: Detailed pricing mechanisms, rates, and payment terms

2. Schedule 2 - Products/Services Description: Detailed description of products or services covered under the framework

3. Schedule 3 - Service Levels: Detailed performance metrics and measurement methods

4. Schedule 4 - Call-off Terms and Conditions: Standard terms for individual agreements under the framework

5. Schedule 5 - Technical Specifications: Detailed technical requirements and standards

6. Schedule 6 - Key Personnel: List of key contacts and responsible personnel from each party

7. Schedule 7 - Form of Purchase Order: Template for placing specific orders under the framework

8. Schedule 8 - Compliance Requirements: Detailed regulatory and compliance requirements

9. Appendix A - Required Documents: List of mandatory documents, permits, and certificates

10. Appendix B - Form of Performance Guarantee: Template for any required performance guarantees or bonds

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

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions
















































Clauses









































Relevant Industries

Manufacturing

Technology

Construction

Healthcare

Energy

Professional Services

Retail

Telecommunications

Financial Services

Defense

Education

Transportation

Oil & Gas

Infrastructure

Real Estate

Relevant Teams

Legal

Procurement

Commercial

Operations

Supply Chain

Sales

Compliance

Finance

Risk Management

Business Development

Project Management

Relevant Roles

Legal Counsel

Commercial Director

Procurement Manager

Contract Manager

Business Development Director

Chief Executive Officer

Chief Commercial Officer

Operations Director

Supply Chain Manager

Sales Director

Compliance Officer

Project Manager

General Manager

Chief Financial Officer

Risk 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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