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Subcontractor Agreement For Services for Saudi Arabia

Subcontractor Agreement For Services Template for Saudi Arabia

A comprehensive legal agreement governed by Saudi Arabian law that establishes the terms and conditions under which a subcontractor provides specific services to a main contractor. The document incorporates requirements from Saudi Labor Law, Commercial Law, and Shari'ah principles, addressing key aspects such as service scope, payment terms, Saudization requirements, and compliance with local regulations. It includes provisions for risk allocation, dispute resolution through Saudi courts or arbitration centers, and necessary protections for both parties while ensuring alignment with the main contract obligations.

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What is a Subcontractor Agreement For Services?

The Subcontractor Agreement For Services is a critical document used when a main contractor needs to delegate specific portions of their contractual obligations to another party in Saudi Arabia. This agreement is particularly important in complex projects where specialized expertise or additional resources are required. The document must comply with Saudi Arabian law, including Labor Law, Commercial Law, and Shari'ah principles, while also addressing specific requirements such as Saudization quotas and local business practices. It typically includes detailed provisions for service scope, performance standards, payment terms, compliance requirements, risk allocation, and dispute resolution mechanisms. The agreement is designed to protect both parties' interests while ensuring clear alignment with the main contract and local regulatory requirements. It's especially crucial in government projects or sectors where subcontracting is heavily regulated in Saudi Arabia.

What sections should be included in a Subcontractor Agreement For Services?

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 agreement, reference to the main contract, and general purpose of the subcontracting arrangement

3. Definitions: Key terms used throughout the agreement, including specific Saudi legal and technical terms

4. Scope of Services: Detailed description of the services to be provided by the subcontractor, including deliverables and performance standards

5. Term and Timeline: Duration of the agreement, key milestone dates, and any extension provisions

6. Payment Terms: Compensation structure, payment schedule, invoicing requirements, and currency specifications compliant with Saudi law

7. Obligations of the Subcontractor: Key responsibilities, compliance requirements, reporting obligations, and performance standards

8. Obligations of the Main Contractor: Support, access, and information to be provided by the main contractor

9. Compliance with Laws: Specific reference to Saudi laws, regulations, and Shari'ah principles that must be adhered to

10. Personnel: Requirements for staff, Saudization requirements, work permits, and labor law compliance

11. Confidentiality: Protection of confidential information and trade secrets

12. Intellectual Property: Ownership and usage rights of IP created during the service provision

13. Liability and Indemnification: Risk allocation, limitation of liability, and indemnification obligations

14. Insurance: Required insurance coverage in accordance with Saudi law

15. Termination: Grounds for termination, notice requirements, and consequences of termination

16. Dispute Resolution: Process for resolving disputes, including reference to Saudi courts or arbitration centers

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

What sections are optional to include in a Subcontractor Agreement For Services?

1. Performance Bond: Required when the project value exceeds certain thresholds or when dealing with government contracts

2. Parent Company Guarantee: Included when the subcontractor is a subsidiary and additional financial security is required

3. Health and Safety: Detailed section required for high-risk services or construction-related activities

4. Environmental Compliance: Required for services with potential environmental impact

5. Quality Assurance: Detailed quality requirements for technical or specialized services

6. Security Requirements: For services involving sensitive information or access to secure facilities

7. Force Majeure: Detailed provisions for unforeseen circumstances, particularly relevant in long-term or high-value contracts

8. Technology Transfer: Required when the service involves transfer of technical knowledge or technology

9. Zakat and Tax: Detailed tax provisions when significant tax implications exist

What schedules should be included in a Subcontractor Agreement For Services?

1. Schedule 1 - Scope of Services: Detailed technical specifications and service requirements

2. Schedule 2 - Pricing and Payment Schedule: Detailed breakdown of fees, payment milestones, and pricing mechanisms

3. Schedule 3 - Performance Standards: Key performance indicators and service level requirements

4. Schedule 4 - Required Personnel: Key personnel requirements, qualifications, and Saudization targets

5. Schedule 5 - Equipment and Materials: List of equipment and materials to be provided by each party

6. Schedule 6 - Form of Performance Bond: Template for performance bond if required

7. Schedule 7 - Required Insurance: Detailed insurance requirements and minimum coverage levels

8. Schedule 8 - Project Timeline: Detailed project schedule and milestones

9. Appendix A - Main Contract Excerpts: Relevant portions of the main contract that affect subcontractor obligations

10. Appendix B - Required Forms and Reports: Templates for progress reports, invoices, and other required documentation

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

Service Agreement

Cost

Free to use
Relevant legal definitions


















































Clauses
















































Relevant Industries

Construction

Information Technology

Oil & Gas

Manufacturing

Professional Services

Telecommunications

Engineering

Facilities Management

Healthcare

Education

Defense

Infrastructure

Mining

Transportation

Logistics

Relevant Teams

Legal

Procurement

Operations

Commercial

Risk & Compliance

Finance

Project Management

Supply Chain

Human Resources

Technical Services

Relevant Roles

Contract Manager

Legal Counsel

Procurement Manager

Project Manager

Commercial Director

Operations Manager

Risk Manager

Compliance Officer

Finance Manager

Technical Director

Business Development Manager

General Counsel

Supply Chain Manager

Chief Operating Officer

HR 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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