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Debt Transfer Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Debt Transfer Agreement

"I need a Debt Transfer Agreement under Saudi law for transferring a construction project debt of SAR 5 million from ABC Construction LLC to XYZ Developers Ltd, with completion required by March 2025 and including provisions for existing performance bonds."

Document background
The Debt Transfer Agreement is a crucial instrument in Saudi Arabian commercial practice, used when one party wishes to transfer its debt obligations to another party. This document is particularly relevant in corporate restructuring, asset sales, or business succession scenarios. It must comply with both Saudi civil law and Sharia principles, particularly the concept of hawalah (debt transfer). The agreement typically includes detailed provisions about the original debt, transfer mechanics, payment terms, and any security arrangements. It's essential in situations where businesses need to reorganize their debt obligations or when a third party agrees to assume existing debt responsibilities. The document must be carefully structured to ensure enforceability under Saudi law and include appropriate provisions for regulatory compliance, especially when involving regulated entities or significant debt amounts.
Suggested Sections

1. Parties: Identification of the Original Creditor, Original Debtor, and New Debtor

2. Background: Description of the original debt, reason for transfer, and confirmation of Sharia compliance

3. Definitions and Interpretation: Key terms used in the agreement, including Arabic legal terms where relevant

4. Transfer of Debt: Core provisions detailing the transfer of debt obligations from Original Debtor to New Debtor

5. Consideration: Details of any consideration paid between Original Debtor and New Debtor

6. Effective Date: Specification of when the transfer becomes effective

7. Representations and Warranties: Statements from all parties confirming their capacity, authority, and Sharia compliance

8. Original Debtor's Obligations: Ongoing obligations and responsibilities of the Original Debtor

9. New Debtor's Obligations: Commitments and responsibilities assumed by the New Debtor

10. Creditor's Acknowledgments: Creditor's consent and acknowledgments regarding the transfer

11. Notices: Process for sending and receiving formal communications

12. Governing Law and Jurisdiction: Confirmation of Saudi law application and jurisdiction of Saudi courts

Optional Sections

1. Security Arrangements: Required if any security or guarantees are being transferred or new security is being provided

2. Regulatory Compliance: Needed if the transfer involves regulated entities or requires regulatory approvals

3. Tax Provisions: Include if there are specific tax implications or Zakat considerations

4. Confidentiality: Optional section for sensitive commercial arrangements

5. Further Assurance: Include if additional documents or actions may be needed post-completion

6. Partial Transfer Provisions: Required if only part of the debt is being transferred

Suggested Schedules

1. Schedule 1 - Original Debt Details: Complete details of the original debt being transferred, including amount, payment terms, and history

2. Schedule 2 - Transfer Documents: Forms and notices required to effect the transfer

3. Schedule 3 - Existing Security: Details of any existing security arrangements

4. Schedule 4 - Payment Schedule: New payment terms and schedule if different from original debt

5. Appendix A - Required Notices: Template notices required for various parties

6. Appendix B - Regulatory Approvals: Copies of any required regulatory approvals or correspondence

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

Relevant legal definitions













































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Relevant Industries

Banking & Financial Services

Real Estate

Construction

Manufacturing

Trading & Commerce

Infrastructure

Energy

Healthcare

Telecommunications

Professional Services

Relevant Teams

Legal

Finance

Treasury

Credit Control

Risk Management

Compliance

Corporate Secretariat

Commercial Operations

Business Development

Corporate Finance

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Financial Controller

Treasury Manager

Credit Manager

Risk Manager

Compliance Officer

Company Secretary

Business Development Director

Restructuring Officer

Commercial Director

Managing Director

Board Member

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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