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Domestic Subcontract Agreement for Saudi Arabia

Domestic Subcontract Agreement Template for Saudi Arabia

A comprehensive legal agreement governed by Saudi Arabian law that establishes the relationship between a main contractor and a subcontractor for the execution of specific works within a larger project. The agreement complies with Sharia law principles and Saudi regulations, including the Government Tenders and Procurement Law, Saudi Labor Law, and relevant construction regulations. It details the scope of work, payment terms, timelines, quality requirements, and obligations of both parties while incorporating local content requirements and Saudization policies.

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What is a Domestic Subcontract Agreement?

The Domestic Subcontract Agreement is essential for projects in Saudi Arabia where a main contractor needs to delegate specific portions of work to specialized subcontractors. This document is crucial for compliance with Saudi Arabian regulations and Sharia law principles, particularly when executing complex projects that require specialized expertise. The agreement addresses key aspects including scope definition, payment mechanisms, quality standards, and dispute resolution within the Saudi legal framework. It incorporates requirements from various Saudi regulations including labor laws, contractor classification requirements, and local content rules. This type of agreement is particularly important given Saudi Arabia's Vision 2030 initiatives and the increasing focus on major development projects across the kingdom.

What sections should be included in a Domestic Subcontract Agreement?

1. Parties: Identification of the main contractor and subcontractor with full legal names, commercial registration numbers, and authorized representatives

2. Background: Context of the main contract, project details, and basis for subcontracting

3. Definitions: Definitions of key terms used throughout the agreement, including technical terms and project-specific terminology

4. Scope of Work: Detailed description of the works to be performed by the subcontractor, including specifications and standards

5. Duration and Timeline: Project schedule, completion dates, and milestones

6. Payment Terms: Pricing, payment schedule, invoicing requirements, and retention amounts

7. Contractor's Obligations: Main contractor's responsibilities, including provision of access, information, and materials

8. Subcontractor's Obligations: Subcontractor's duties, warranties, and performance requirements

9. Materials and Equipment: Requirements for materials, equipment, and quality standards

10. Health, Safety and Environment: HSE requirements and compliance with Saudi regulations

11. Quality Control: Quality assurance procedures and inspection requirements

12. Workforce Requirements: Labor regulations compliance, Saudization requirements, and workforce management

13. Insurance and Liability: Required insurance coverage and allocation of risks

14. Termination: Grounds and procedures for contract termination

15. Dispute Resolution: Procedures for resolving disputes under Saudi law

16. General Provisions: Standard contractual clauses including notices, amendments, and governing law

What sections are optional to include in a Domestic Subcontract Agreement?

1. Performance Bond: Required when project value exceeds certain thresholds or when specified by main contract

2. Advance Payment: Include when advance payment is to be made to the subcontractor

3. Intellectual Property: Required when subcontract involves design work or proprietary information

4. Force Majeure: Detailed force majeure provisions beyond standard terms, particularly relevant for long-term projects

5. Confidentiality: Required when sensitive information will be shared

6. Environmental Compliance: Detailed environmental requirements for environmentally sensitive projects

7. Training and Technology Transfer: Required when project involves training of Saudi nationals or technology transfer

8. Warranty Period: Extended warranty provisions beyond standard terms

What schedules should be included in a Domestic Subcontract Agreement?

1. Schedule 1 - Scope of Works: Detailed technical specifications and drawings

2. Schedule 2 - Bill of Quantities: Itemized pricing and quantities

3. Schedule 3 - Project Timeline: Detailed project schedule and milestones

4. Schedule 4 - Payment Schedule: Detailed payment terms and milestone payments

5. Schedule 5 - Key Personnel: List of key personnel and their qualifications

6. Schedule 6 - Required Insurances: Details of insurance requirements and coverage

7. Schedule 7 - HSE Requirements: Detailed health, safety, and environmental requirements

8. Schedule 8 - Quality Assurance Plan: Quality control procedures and requirements

9. Appendix A - Forms and Templates: Standard forms for notices, claims, and variations

10. Appendix B - Main Contract Excerpts: Relevant portions of the main contract that apply to the subcontractor

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

Cost

Free to use
Relevant legal definitions





























































Clauses










































Relevant Industries

Construction

Oil & Gas

Infrastructure Development

Real Estate Development

Industrial Projects

Energy

Transportation

Manufacturing

Mining

Telecommunications

Relevant Teams

Legal

Commercial

Procurement

Operations

Project Management

Finance

Risk & Compliance

Technical

Quality Assurance

Health Safety & Environment

Engineering

Construction Management

Relevant Roles

Project Manager

Contract Manager

Legal Counsel

Commercial Manager

Construction Manager

Procurement Manager

Technical Director

Operations Manager

Risk Manager

Compliance Officer

Finance Manager

Quality Assurance Manager

HSE Manager

Site Supervisor

Engineering 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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