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Construction Contract Termination Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Construction Contract Termination Agreement

"I need a Construction Contract Termination Agreement under Saudi law for a mutual termination of a shopping mall development project in Riyadh, where construction is 60% complete and we need to address ongoing warranty obligations for the completed portions while ensuring Sharia compliance."

Document background
The Construction Contract Termination Agreement is a critical document used when parties need to formally end a construction contract before its natural completion in Saudi Arabia. It's particularly relevant in scenarios involving project cancellations, fundamental breaches, force majeure events, or mutual agreement to cease works. The document must comply with Saudi Arabian law, including the Government Tenders and Procurement Law for public projects and Civil Code principles derived from Sharia Law for private contracts. It covers essential elements such as financial reconciliation, asset handling, warranties, and liability allocation, while providing a clear framework for project closure and dispute prevention. The agreement is crucial for protecting parties' rights and ensuring a structured approach to contract termination in the Saudi Arabian construction sector.
Suggested Sections

1. Parties: Identification of all contracting parties, including the employer, contractor, and any guaranteed parties

2. Background: Details of the original construction contract, project description, and circumstances leading to termination

3. Definitions: Definitions of key terms used in the agreement, including relevant Arabic/English translations where necessary

4. Termination Effect and Date: Clear statement of termination, effective date, and immediate consequences

5. Financial Settlement: Terms of final payment, including outstanding payments, retention amounts, and any termination-related costs

6. Handover Requirements: Procedures for site handover, transfer of materials, equipment, and documentation

7. Warranties and Guarantees: Status of existing warranties, performance guarantees, and bonds

8. Release and Discharge: Mutual release of claims and obligations, subject to specified exceptions

9. Confidentiality: Obligations regarding confidential information post-termination

10. Governing Law and Jurisdiction: Confirmation of Saudi law application and jurisdiction for disputes

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

Optional Sections

1. Ongoing Disputes Resolution: Include when there are existing disputes that need specific resolution mechanisms

2. Intellectual Property Rights: Include when there are significant IP rights to be transferred or licensed

3. Employee Matters: Include when there are specific arrangements for employee transfer or termination

4. Insurance and Indemnities: Include when specific insurance arrangements need to continue or require special handling

5. Defects Liability: Include when there are ongoing defects liability obligations to be addressed

6. Third Party Rights: Include when there are significant subcontractor or supplier relationships to address

7. Anti-corruption Compliance: Include for public sector projects or when required by corporate policies

Suggested Schedules

1. Schedule 1 - Original Contract Documents: List of all relevant contract documents being terminated

2. Schedule 2 - Financial Statement: Detailed breakdown of final account, including all payments, deductions, and outstanding amounts

3. Schedule 3 - Handover Items: Comprehensive list of materials, equipment, and documents to be handed over

4. Schedule 4 - Outstanding Works: List of incomplete works and their status at termination

5. Schedule 5 - Performance Bonds and Guarantees: Details of all bonds and guarantees and their treatment

6. Schedule 6 - Known Claims and Disputes: List of existing claims and their agreed resolution

7. Appendix A - Handover Protocol: Detailed procedures and timeline for project handover

8. Appendix B - Release Certificates: Forms of mutual release certificates to be executed

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions














































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Relevant Industries

Construction

Infrastructure

Real Estate Development

Oil & Gas

Industrial Development

Commercial Property

Healthcare Facilities

Education Facilities

Government Infrastructure

Transportation

Energy

Mining

Hospitality

Relevant Teams

Legal

Commercial

Construction

Project Management

Finance

Operations

Engineering

Risk Management

Procurement

Compliance

Technical Services

Relevant Roles

Project Director

Construction Manager

Legal Counsel

Contract Manager

Chief Executive Officer

Commercial Director

Project Manager

Site Manager

Quantity Surveyor

Risk Manager

Finance Director

Operations Director

Technical Director

Engineering Manager

Procurement 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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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