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Framework Contract for Saudi Arabia

Framework Contract Template for Saudi Arabia

A Framework Contract under Saudi Arabian law establishes the fundamental terms and conditions governing future specific contracts or transactions between parties. This document incorporates both Sharia law principles and modern commercial practices, aligned with Saudi Arabia's legal framework including the Commercial Courts Law and relevant sector-specific regulations. It serves as a master agreement that streamlines future transactions by pre-establishing key commercial, operational, and legal terms while maintaining flexibility for specific orders or statements of work. The document must ensure compliance with local content requirements and Saudi Arabia's regulatory environment while facilitating efficient business operations.

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What is a Framework Contract?

Framework Contracts are essential commercial documents in Saudi Arabia used to establish long-term business relationships while ensuring compliance with both Sharia law and modern commercial regulations. This type of agreement is particularly valuable when parties anticipate multiple transactions or ongoing business relationships, as it provides a structured yet flexible foundation for future specific contracts. The Framework Contract defines general terms, pricing mechanisms, performance standards, and operational procedures while allowing for individual orders or statements of work to be executed under its umbrella. It's especially relevant in the context of Saudi Arabia's Vision 2030, which has introduced new regulations and requirements for business relationships, including local content requirements and specific sector regulations. The document must balance the need for commercial certainty with Sharia principles of fairness and mutual benefit.

What sections should be included in a Framework Contract?

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

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

3. Definitions and Interpretation: Key terms used throughout the agreement and rules for interpreting the contract

4. Scope of Framework: General description of the products/services covered and the framework for future specific contracts

5. Duration and Renewal: Term of the framework agreement, including commencement date and renewal provisions

6. Ordering Process: Procedures for placing and accepting orders under the framework

7. Pricing and Payment Terms: General pricing principles, payment terms, and mechanism for price adjustments

8. Performance Standards: Required quality standards, KPIs, and service levels

9. Compliance with Laws: Obligation to comply with Saudi laws, including Sharia principles and relevant regulations

10. Confidentiality: Protection of confidential information exchanged under the framework

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

12. Force Majeure: Provisions for unforeseen circumstances preventing performance

13. Termination: Grounds and process for terminating the framework agreement

14. Dispute Resolution: Procedures for resolving disputes, including jurisdiction and applicable law

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

What sections are optional to include in a Framework Contract?

1. Intellectual Property Rights: Include when framework involves creation, licensing or transfer of IP rights

2. Data Protection: Include when personal data processing is involved in the framework

3. Insurance Requirements: Include when specific insurance coverage is required for the activities

4. Anti-Corruption: Include when dealing with government entities or high-risk sectors

5. Environmental Compliance: Include when activities have environmental implications

6. Security Requirements: Include when dealing with sensitive information or facilities

7. Training and Support: Include when ongoing training or support services are part of the framework

8. Exclusivity: Include when parties agree to exclusive arrangements

9. Local Content Requirements: Include when compliance with Saudi Arabia's local content rules is relevant

What schedules should be included in a Framework Contract?

1. Schedule 1 - Pricing Schedule: Detailed pricing structure, rates, and any volume-based discounts

2. Schedule 2 - Service Specifications: Detailed technical specifications of products or services covered

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

4. Schedule 4 - Key Personnel: List of key personnel from both parties responsible for framework management

5. Schedule 5 - Form of Order: Template for individual orders under the framework

6. Schedule 6 - Reporting Requirements: Templates and requirements for regular reporting

7. Schedule 7 - Change Control Procedure: Process for implementing changes to services or terms

8. Appendix A - Compliance Requirements: Specific regulatory and compliance requirements applicable to the framework

9. Appendix B - Technical Standards: Applicable technical standards and certifications required

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

Oil and Gas

Construction

Healthcare

Information Technology

Manufacturing

Professional Services

Telecommunications

Defense

Education

Financial Services

Transportation and Logistics

Retail and Distribution

Energy and Utilities

Mining

Real Estate

Relevant Teams

Legal

Procurement

Commercial

Operations

Business Development

Compliance

Finance

Risk Management

Supply Chain

Contract Administration

Project Management

Sales

Relevant Roles

Chief Executive Officer

Chief Legal Officer

General Counsel

Commercial Director

Procurement Manager

Contract Manager

Legal Counsel

Business Development Manager

Operations Director

Project Manager

Supply Chain Manager

Compliance Officer

Risk Manager

Chief Financial Officer

Sales Director

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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