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Contingency Agreement for Saudi Arabia

Contingency Agreement Template for Saudi Arabia

This document represents a Contingency Agreement governed by Saudi Arabian law, structured to comply with both commercial regulations and Shariah principles. It establishes conditional obligations between parties where specific actions, payments, or performance requirements are triggered by predetermined events or achievements. The agreement carefully balances the need for clear contingency terms while avoiding excessive uncertainty (gharar) that would be prohibited under Islamic law. It includes detailed provisions for triggering events, payment mechanisms, and dispute resolution procedures aligned with Saudi Arabian legal requirements and commercial practices.

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Contingency Agreement

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What is a Contingency Agreement?

The Contingency Agreement serves as a crucial legal instrument in Saudi Arabian business transactions where parties wish to establish conditional obligations based on specific triggers or achievements. This document type is particularly valuable when structuring performance-based arrangements, success fees, or conditional payment terms while ensuring compliance with both Saudi commercial regulations and Islamic law principles. The agreement must carefully navigate Shariah requirements regarding uncertainty (gharar) and speculation, while providing clear, enforceable terms for contingent obligations. It typically includes detailed mechanisms for verifying triggering events, calculating payments, and resolving disputes under Saudi jurisdiction. This document is commonly used in various commercial contexts, from business consulting to development projects, where payment or performance is contingent upon specific outcomes.

What sections should be included in a Contingency Agreement?

1. Parties: Identification of all contracting parties, including full legal names, addresses, and registration details

2. Background: Context of the agreement and relationship between the parties

3. Definitions: Key terms used throughout the agreement, including specific contingency-related definitions

4. Scope of Agreement: Clear description of the subject matter and objectives of the contingency arrangement

5. Contingency Events: Detailed description of the triggering events or conditions that activate contractual obligations

6. Obligations of the Parties: Specific duties and responsibilities of each party before and after contingency event occurrence

7. Payment Terms: Structure and timing of payments, including contingent payment mechanisms compliant with Shariah principles

8. Term and Termination: Duration of the agreement and circumstances under which it may be terminated

9. Representations and Warranties: Statements of fact and assurances by the parties

10. Compliance with Laws: Commitment to comply with Saudi laws and Shariah principles

11. Dispute Resolution: Process for resolving disputes, including reference to Saudi courts or arbitration

12. Governing Law: Specification of Saudi law and Shariah principles as governing law

13. Notices: Process and requirements for formal communications between parties

What sections are optional to include in a Contingency Agreement?

1. Force Majeure: Provisions for unforeseen circumstances preventing performance, used when specific risk allocation is needed

2. Confidentiality: Obligations regarding sensitive information, included when proprietary information is shared

3. Insurance: Insurance requirements and obligations, used when specific risks need to be covered

4. Assignment: Rights and restrictions regarding transfer of obligations, included when transfer rights need specification

5. Intellectual Property: IP rights and protections, included when IP assets are involved

6. Security Arrangements: Collateral or guarantee provisions, used when additional security is required

7. Change Control: Procedures for modifying agreement terms, included for long-term or complex arrangements

8. Audit Rights: Rights to audit compliance or calculations, used when verification needs are anticipated

What schedules should be included in a Contingency Agreement?

1. Schedule of Contingency Events: Detailed listing and description of all qualifying contingency events

2. Payment Schedule: Detailed breakdown of payment calculations and timing

3. Performance Metrics: Specific metrics or KPIs used to measure contingent conditions

4. Required Notices and Forms: Templates for required notifications and standard forms

5. Contact Details: List of key contacts and authorized representatives for each party

6. Compliance Requirements: Specific regulatory or Shariah compliance requirements

7. Service Level Requirements: Detailed performance standards if applicable to the contingency

8. Risk Matrix: Allocation of risks and responsibilities between parties

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

Jurisdiction

Saudi Arabia

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions
































Clauses








































Relevant Industries

Financial Services

Real Estate Development

Construction

Professional Services

Energy and Resources

Manufacturing

Technology

Healthcare

Education

Telecommunications

Infrastructure Development

Islamic Banking

Commercial Trading

Business Consulting

Relevant Teams

Legal

Finance

Commercial

Risk Management

Compliance

Operations

Business Development

Project Management

Investment

Executive Leadership

Shariah Advisory

Contract Administration

Corporate Strategy

Relevant Roles

Legal Counsel

Commercial Director

Business Development Manager

Contract Manager

Chief Financial Officer

Risk Manager

Compliance Officer

Project Manager

Investment Director

Operations Manager

General Manager

Chief Executive Officer

Shariah Compliance Officer

Commercial Manager

Finance Director

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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