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The Subcontractor Framework Agreement is essential for businesses operating in Saudi Arabia that require regular engagement of subcontractors for various projects or services. This agreement type is particularly valuable when a main contractor anticipates multiple work packages or service requirements over time, as it streamlines the contracting process while ensuring compliance with Saudi regulations, including labor law, Saudization requirements, and Sharia principles. The framework structure allows for efficient deployment of subcontractors through individual work orders while maintaining consistent terms, standards, and protections. It includes comprehensive provisions for performance management, risk allocation, and dispute resolution, making it suitable for both technical services and construction projects. The agreement must align with Saudi Arabian commercial law and regulatory requirements while providing practical mechanisms for ongoing business relationships.

1. Parties: Identification of the main contractor and subcontractor, including commercial registration details and authorized signatories

2. Background: Context of the framework agreement, business relationship, and general scope of intended services

3. Definitions: Key terms used throughout the agreement, including technical, commercial, and legal definitions

4. Scope of Framework: General description of services/works covered, process for work orders, and framework operation

5. Work Order Process: Procedures for issuing, accepting, and executing individual work orders under the framework

6. Subcontractor Obligations: Core duties, performance standards, compliance requirements, and delivery obligations

7. Main Contractor Obligations: Responsibilities including payment, information provision, and coordination

8. Pricing and Payment: Fee structure, payment terms, invoicing requirements, and VAT provisions

9. Performance Standards: Quality requirements, KPIs, and performance monitoring processes

10. Workforce Requirements: Labor law compliance, Saudization requirements, and workforce management

11. Health, Safety and Environment: HSE standards, compliance requirements, and reporting obligations

12. Insurance and Liability: Required insurance coverage, liability limits, and indemnification provisions

13. Confidentiality: Protection of confidential information and trade secrets

14. Intellectual Property: Ownership and usage rights of IP created during project execution

15. Term and Termination: Duration, renewal provisions, and termination rights

16. Force Majeure: Events constituting force majeure and consequent rights and obligations

17. Dispute Resolution: Dispute resolution procedures compliant with Saudi law

18. Governing Law: Confirmation of Saudi law application and Sharia compliance

19. General Provisions: Standard boilerplate clauses including notices, amendments, and entire agreement