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The Commission Distribution Agreement is a crucial commercial contract used in Saudi Arabia when a company (principal) wishes to establish a distribution network through local partners who will market and sell products for a commission-based compensation. This document type is particularly important in the Saudi market due to specific local commercial agency regulations and Sharia law requirements. The agreement must be structured to comply with Saudi Arabian commercial laws, including the Commercial Agencies Law and related regulations. It typically includes detailed provisions on territory rights, commission calculations, performance expectations, and compliance requirements. This type of agreement is commonly used when entering the Saudi market and requires careful consideration of local business practices, regulatory requirements, and cultural aspects.

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

2. Background: Context of the agreement, including the principal's business, products, and desire to appoint a distributor

3. Definitions: Key terms used throughout the agreement, including Products, Territory, Commission, Customers, etc.

4. Appointment and Territory: Scope of distributor's appointment and defined geographical territory for operations

5. Commission Structure: Detailed breakdown of commission rates, calculation methods, and payment terms

6. Obligations of the Principal: Principal's duties including product supply, support, training, and marketing materials

7. Obligations of the Distributor: Distributor's duties including marketing, sales targets, reporting, and customer service

8. Term and Termination: Duration of agreement, renewal terms, and grounds for termination

9. Intellectual Property Rights: Protection and usage rights of trademarks, patents, and other IP

10. Confidentiality: Protection of confidential information and trade secrets

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

12. Dispute Resolution: Process for resolving disputes under Saudi law, including jurisdiction and applicable courts

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