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Settlement Agreement Contract Template for Saudi Arabia

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Settlement Agreement Contract

"I need a Settlement Agreement Contract under Saudi law to resolve a construction dispute between our company and a subcontractor regarding project delays and defective work, with an agreed settlement amount of 2.5 million SAR to be paid by March 2025."

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What is a Settlement Agreement Contract?

The Settlement Agreement Contract is a crucial legal instrument in Saudi Arabia used to formally document the resolution of disputes between parties without (or as a result of) court proceedings. This document type is essential when parties wish to settle their differences through mutual agreement rather than litigation or arbitration. It must comply with Saudi Arabian law, including both civil law requirements and Sharia principles, making it particularly important to include specific provisions that ensure enforceability within this jurisdiction. The agreement typically covers various aspects including financial settlements, mutual releases, confidentiality obligations, and future conduct of the parties. It's commonly used in commercial disputes, employment matters, construction conflicts, and financial disagreements, providing a legally binding framework that prevents future litigation on the settled matters.

What sections should be included in a Settlement Agreement Contract?

1. Parties: Identification of all parties to the settlement agreement, including full legal names, addresses, and registration details if companies

2. Background: Description of the dispute or circumstances leading to the settlement, including reference to any existing legal proceedings

3. Definitions: Definitions of key terms used throughout the agreement to ensure clarity and prevent misinterpretation

4. Settlement Terms: Clear statement of the agreed settlement terms, including any admissions or denials of liability

5. Payment Terms: Detailed description of any monetary settlements, including amounts, payment schedule, and method of payment

6. Release and Waiver: Mutual release of claims and waiver of rights related to the disputed matter

7. Confidentiality: Obligations regarding confidentiality of the settlement terms and related information

8. Compliance with Sharia: Explicit statement confirming the agreement's compliance with Islamic Sharia principles

9. Governing Law and Jurisdiction: Specification of Saudi law as governing law and designation of competent courts

10. Entire Agreement: Statement that this document represents the complete agreement between parties

11. Execution: Signature requirements and execution formalities in accordance with Saudi law

What sections are optional to include in a Settlement Agreement Contract?

1. Non-Disparagement: Include when parties wish to prevent negative statements about each other after settlement

2. Future Cooperation: Include when parties need to specify ongoing obligations or cooperation after settlement

3. Tax Implications: Include when settlement involves significant monetary compensation with tax consequences

4. Insurance Provisions: Include when settlement involves insurance claims or future insurance obligations

5. Intellectual Property Rights: Include when settlement involves transfer or licensing of intellectual property

6. Third Party Rights: Include when settlement affects rights of parties not directly involved in the agreement

7. Force Majeure: Include when future performance obligations are part of the settlement

What schedules should be included in a Settlement Agreement Contract?

1. Schedule 1 - Payment Schedule: Detailed breakdown of payment amounts, dates, and methods if settlement involves installment payments

2. Schedule 2 - Released Claims: Comprehensive list of all claims being settled and released

3. Schedule 3 - Required Actions: List of specific actions parties must take to implement the settlement

4. Schedule 4 - Related Proceedings: List of any legal proceedings to be discontinued as part of settlement

5. Schedule 5 - Form of Release: Template of any additional release documents to be executed

6. Appendix A - Supporting Documents: Copies of relevant documents referenced in the settlement

7. Appendix B - Corporate Authorizations: Copies of corporate approvals and authorizations if parties are companies

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



























Clauses






























Relevant Industries

Financial Services

Construction

Real Estate

Manufacturing

Oil & Gas

Technology

Healthcare

Retail

Professional Services

Transportation & Logistics

Education

Telecommunications

Insurance

Mining & Materials

Relevant Teams

Legal

Compliance

Risk Management

Executive Leadership

Finance

Human Resources

Commercial Operations

Corporate Affairs

Business Development

Contract Administration

Dispute Resolution

Relevant Roles

Legal Counsel

Chief Legal Officer

Compliance Manager

Risk Manager

Chief Executive Officer

Chief Financial Officer

Contract Manager

Dispute Resolution Specialist

Human Resources Director

Commercial Director

Settlement Officer

Claims Manager

General Counsel

Corporate Secretary

Business Development 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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