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The Cost Plus Construction Agreement is particularly suited for complex construction projects in Saudi Arabia where the final scope or costs cannot be accurately determined at the outset. This document is essential when parties prefer a transparent pricing mechanism that allows for flexibility while maintaining cost control. It is commonly used in large-scale industrial, infrastructure, or specialized construction projects where the scope may evolve during execution. The agreement must comply with Saudi Arabian law, including Shariah principles and construction regulations, while addressing key aspects such as cost components, contractor's fee structure, payment mechanisms, and project management requirements. It includes provisions for cost verification, reporting procedures, quality control, and risk allocation, making it suitable for projects requiring detailed cost oversight and collaborative project execution.

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

2. Background: Context of the agreement and brief description of the project

3. Definitions: Definitions of key terms used throughout the agreement, including cost components and markup structure

4. Scope of Work: Detailed description of the construction work to be performed

5. Contractor's Obligations: Primary responsibilities and duties of the contractor

6. Employer's Obligations: Primary responsibilities and duties of the employer

7. Cost Definition and Components: Detailed breakdown of what constitutes costs and how they are calculated

8. Fee Structure and Payment: Definition of the contractor's fee/markup and payment mechanisms

9. Cost Control and Reporting: Procedures for cost monitoring, reporting, and control

10. Time for Completion: Project timeline, milestones, and completion requirements

11. Quality and Standards: Quality requirements and applicable construction standards

12. Changes and Variations: Procedures for handling changes to scope or specifications

13. Insurance and Liability: Insurance requirements and allocation of risks

14. Force Majeure: Events constituting force majeure and consequences

15. Termination: Grounds and procedures for contract termination

16. Dispute Resolution: Procedures for resolving disputes, including Saudi arbitration requirements

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