The Third Party Contractor Agreement is essential for businesses operating in Saudi Arabia that engage external service providers or contractors. This document is designed to comply with Saudi Arabian legal requirements, including the Saudi Labor Law, Commercial Law, and Sharia principles. It is particularly important given the increasing focus on proper contractor classification, Saudization requirements, and regulatory compliance in the Kingdom. The agreement covers critical aspects such as service scope, payment terms (including VAT considerations), contractor independence, intellectual property rights, and dispute resolution mechanisms. It's specifically structured to address both local and international contractor relationships while ensuring alignment with Saudi Arabia's Vision 2030 economic reforms and regulatory framework.
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1. Parties: Identification of the contracting parties, including full legal names, commercial registration numbers, and authorized representatives
2. Background: Context of the agreement and brief description of the parties' business relationship
3. Definitions: Key terms used throughout the agreement, including specific Saudi legal and regulatory terminology
4. Scope of Services: Detailed description of services to be provided by the contractor, including deliverables and performance standards
5. Term and Renewal: Duration of the agreement, including commencement date and renewal provisions
6. Payment Terms: Compensation, payment schedule, VAT provisions, and invoicing requirements under Saudi law
7. Contractor's Obligations: Key responsibilities, compliance with Saudi regulations, and service delivery requirements
8. Company's Obligations: Support, access, and resources to be provided by the company
9. Independent Contractor Status: Clear statement of independent contractor relationship to avoid employment claims under Saudi Labor Law
10. Compliance with Laws: Obligation to comply with Saudi laws, including labor laws, Saudization requirements, and industry regulations
11. Confidentiality: Protection of confidential information and trade secrets
12. Intellectual Property: Ownership and protection of IP rights under Saudi law
13. Liability and Indemnification: Allocation of risks and responsibilities between parties
14. Termination: Grounds and procedures for termination, including notice requirements
15. Dispute Resolution: Process for resolving disputes under Saudi law, including jurisdiction and applicable courts
16. General Provisions: Standard clauses including notices, amendments, and governing law
1. Insurance: Required when contractor needs specific insurance coverage for high-risk services
2. Performance Bond: Include when security for performance is required, especially for high-value contracts
3. Health and Safety: Required for contractors working on-site or in hazardous environments
4. Data Protection: Include when contractor will handle personal or sensitive data
5. Force Majeure: Optional but recommended for long-term contracts or where service interruption risks exist
6. Non-Competition: Include when contractor will have access to sensitive business information or customer relationships
7. Training and Knowledge Transfer: Required when contractor must train company staff or transfer knowledge
8. Subcontracting: Include when contractor may need to engage subcontractors
9. Equipment and Materials: Required when specific equipment or materials are provided by either party
1. Schedule 1 - Service Specifications: Detailed description of services, deliverables, and performance metrics
2. Schedule 2 - Fee Schedule: Detailed breakdown of fees, rates, and payment terms including VAT calculations
3. Schedule 3 - Key Personnel: List of key contractor personnel and their qualifications
4. Schedule 4 - Service Levels: Performance standards, KPIs, and measurement criteria
5. Schedule 5 - Company Policies: Relevant company policies contractor must comply with
6. Appendix A - Required Permits and Licenses: List of regulatory approvals and licenses required under Saudi law
7. Appendix B - Technical Requirements: Technical specifications and standards for service delivery
8. Appendix C - Compliance Requirements: Specific regulatory and compliance requirements including Saudization obligations
Authors
Relevant legal definitions
Clauses
Relevant Industries
Construction
Information Technology
Oil & Gas
Manufacturing
Healthcare
Professional Services
Engineering
Telecommunications
Education
Facilities Management
Mining
Transportation & Logistics
Real Estate Development
Financial Services
Relevant Teams
Legal
Procurement
Operations
Human Resources
Finance
Compliance
Supply Chain
Commercial
Risk Management
Project Management
Facilities Management
Relevant Roles
Legal Counsel
Procurement Manager
Contract Manager
Project Manager
Operations Director
Human Resources Director
Compliance Officer
Finance Manager
Commercial Director
Supply Chain Manager
Facilities Manager
Risk Manager
Business Unit Head
General Manager
Chief Financial Officer
Chief Operating Officer
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