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Service Provider Agreement for Saudi Arabia

Service Provider Agreement Template for Saudi Arabia

A comprehensive legal agreement governed by Saudi Arabian law that establishes the terms and conditions under which a service provider will deliver specified services to a client. The document incorporates Sharia law principles and Saudi commercial regulations, detailing service scope, performance standards, payment terms, and compliance requirements. It includes provisions for risk allocation, confidentiality, dispute resolution, and termination rights, while ensuring alignment with local regulatory requirements including Saudi Labor Law and relevant industry-specific regulations. The agreement also addresses data protection, intellectual property rights, and mandatory local content requirements under Saudi Vision 2030.

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What is a Service Provider Agreement?

The Service Provider Agreement is a fundamental commercial contract used when engaging external service providers in Saudi Arabia. It serves as the primary legal framework governing the relationship between service providers and their clients, whether for one-time projects or ongoing services. This document is essential in the Saudi Arabian business context, where it must comply with both Sharia law principles and modern commercial regulations. The agreement typically covers all aspects of the service relationship, including detailed service descriptions, performance metrics, payment structures (designed to avoid prohibited interest elements), and compliance with local laws including Saudi Labor Law, VAT regulations, and industry-specific requirements. It's particularly important given Saudi Arabia's increasing focus on formal documentation of commercial relationships and the growing emphasis on local content under Vision 2030 initiatives.

What sections should be included in a Service Provider Agreement?

1. Parties: Identification of the service provider and client, including full legal names, commercial registration numbers, and authorized representatives

2. Background: Context of the agreement and brief description of the parties' business relationship

3. Definitions: Key terms used throughout the agreement, ensuring clarity and consistent interpretation

4. Scope of Services: Detailed description of services to be provided, including core obligations and deliverables

5. Term and Commencement: Duration of the agreement, including start date and any renewal provisions

6. Service Provider's Obligations: Comprehensive list of service provider's duties, standards of service, and compliance requirements

7. Client's Obligations: Client's responsibilities, including cooperation, access, and information provision

8. Fees and Payment Terms: Pricing structure, payment schedule, and invoicing procedures (ensuring Sharia compliance)

9. Service Levels: Performance standards, KPIs, and measurement criteria

10. Confidentiality: Protection of confidential information and trade secrets

11. Liability and Indemnification: Allocation of risks, limitation of liability, and indemnification obligations

12. Force Majeure: Events excusing performance and related procedures

13. Termination: Grounds for termination, notice requirements, and consequences

14. Governing Law and Dispute Resolution: Saudi law application and dispute resolution mechanisms

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

What sections are optional to include in a Service Provider Agreement?

1. Intellectual Property Rights: Required when services involve creation, licensing, or use of intellectual property

2. Data Protection and Privacy: Necessary when personal data processing is involved, ensuring PDPL compliance

3. Anti-Corruption Compliance: Important for international service providers or government-related services

4. Insurance: Required for high-risk services or when significant liability exposure exists

5. Security Requirements: Necessary for services involving IT systems, sensitive data, or physical security

6. Change Control: Important for long-term or complex service arrangements

7. Business Continuity: Required for critical services or regulated industries

8. Subcontracting: Needed when service provider may use subcontractors

9. Export Control: Required for services involving cross-border technology or data transfer

10. Localization Requirements: Important for compliance with Saudi Arabia's localization policies

What schedules should be included in a Service Provider Agreement?

1. Schedule 1 - Service Description: Detailed technical specifications and scope of services

2. Schedule 2 - Service Levels and KPIs: Detailed performance metrics, measurement methods, and reporting requirements

3. Schedule 3 - Fee Schedule: Detailed pricing, payment terms, and any variable fee calculations

4. Schedule 4 - Implementation Plan: Timeline and milestones for service implementation

5. Schedule 5 - Contact Details and Escalation Matrix: Key personnel and communication procedures

6. Schedule 6 - Required Insurance Coverage: Types and levels of insurance required

7. Schedule 7 - Compliance Requirements: Specific regulatory and industry compliance requirements

8. Appendix A - Form of Reports: Templates for required service reports and documentation

9. Appendix B - Security Protocols: Detailed security procedures and requirements

10. Appendix C - Change Request Form: Template for requesting and documenting changes to services

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

Information Technology

Professional Services

Management Consulting

Engineering Services

Healthcare Services

Facilities Management

Financial Services

Education and Training

Telecommunications

Construction Services

Environmental Services

Security Services

Marketing and Advertising

Human Resources Services

Logistics and Supply Chain

Relevant Teams

Legal

Procurement

Operations

Commercial

Finance

Compliance

Risk Management

Business Development

Project Management

Supply Chain

Vendor Management

Contract Administration

Relevant Roles

Legal Counsel

Procurement Manager

Contract Manager

Commercial Director

Operations Manager

Project Manager

Compliance Officer

Risk Manager

Finance Director

Business Development Manager

Account Manager

Service Delivery Manager

Chief Operating Officer

General Counsel

Managing Director

Supply Chain 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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