Contract Drafting
Protecting Your Interests Through Solid Legal Contracts
Contract drafting is one of the most crucial steps in any business transaction, whether it involves forming a partnership, employment, supply, or service provision. A well-crafted contract protects your rights, clearly defines the obligations of each party, and minimizes the risks of future disputes.
Contract drafting in the Kingdom of Saudi Arabia is subject to strict requirements to ensure its validity. Among the most notable of these requirements is the clarity of the contract for all contracting parties and its freedom from any significant ambiguity that may lead to the contract’s invalidity. Ambiguity can encompass several aspects, such as uncertainty regarding the subject matter, compensation, or terms, and the means of documentation must be clear.
Key Conditions:
- The contract must be free of ambiguity or coercion.
- It must not contain any invalidating conditions that conflict with Sharia or law.
- The subject matter must be deliverable without harm.
- The contract should be free of options that allow one party to terminate the contract, except in cases specified by law.
Contract Drafting and Execution Period
Contract drafting in Saudi Arabia includes a set of regulatory rules outlined in the Government Procurement and Competition System. Contracts must be written in Arabic, with the option to add another language, provided that Arabic serves as the reference in case of disputes.
Rules Related to Contract Execution:
- Contracts and their documents must be drafted in Arabic.
- Continuous service contracts, such as maintenance and cleaning, should not exceed five years.
- The duration should be determined based on the size and nature of the work.
- Include performance and continuous review terms in ongoing contracts.
- Include clauses related to knowledge transfer and training.
Types of Contracts
Contracts in Saudi law are divided into several types based on their formation, subject matter, effects, and nature. Each type of contract has its own provisions and handling methods.
1.Contracts by Formation :
Consensual Contract
Established through mutual consent between the parties.
Formal Contract
Requires a specific formality, such as writing.
Real Contract
Requires delivery to be completed.
2. Contracts by Subject Matter :
Named Contract
Regulated according to the law.
Unnamed Contract
Does not have a specific designation in the law.
3. Contracts by Effect:
Bilateral Obligatory Contract
Requires mutual obligations from both parties.
Unilateral Obligatory Contract
Imposes an obligation on only one party.
4. Contracts by Nature:
Specific Contract
The parties agree on all details
Contingent Contract
The parties are not fully aware of the extent of their obligations.
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Commercial Contract Drafting
Commercial contracts form an essential part of economic activity, and their drafting requires consideration of several points, such as clarity of language and detailed rights and duties of the parties. Provisions regulating contract termination in case of disputes should also be included.
Key Elements in Commercial Contract Drafting:
- Clarity of language and use of precise expressions.
- Specification of the method of contract execution and imposed restrictions.
- Inclusion of termination clauses and dispute provisions.
- Avoiding any clauses that violate the law
Importance of Contract Drafting and Review
Drafting and reviewing contracts help ensure that the contracting parties understand their obligations correctly and comply with the law. Additionally, it contributes to protecting rights and avoiding potential legal disputes.
Benefits:
- Alerts contractors to legal and Sharia provisions.
- Offers suggestions to ensure the success of the contractual relationship.
- Clarifies the procedures to follow before and after contracting.
- Includes clauses that facilitate the future development of the contractual relationship.
Conclusion
At ” Al-Safadi Business Services, we recognize that every business has its unique characteristics. Therefore, we offer customized contract drafting services based on your needs and requirements. We ensure that the contracts we prepare comply with Saudi regulations, accurately reflect the details of the agreement, and safeguard your legal interests.
Our legal team has expertise in handling various types of commercial contracts, ranging from company formation contracts, partnership agreements, supply and service agreements, to real estate contracts. Additionally, we review existing contracts to ensure their compliance with local laws and update them as necessary to keep pace with legal changes.