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The Sole Agency Agreement is a critical document for companies seeking to establish exclusive commercial representation in Saudi Arabia through a local agent. This agreement type is specifically regulated under Saudi Commercial Agencies Law (Royal Decree No. M/11) and must be registered with the Ministry of Commerce. It's particularly important for foreign companies entering the Saudi market, as it provides a legally recognized framework for conducting business through a local representative. The agreement covers essential elements such as territorial exclusivity, commission structures, performance requirements, and compliance with local regulations. It must be Sharia-compliant and typically includes provisions for product/service representation, marketing rights, and dispute resolution under Saudi jurisdiction.

1. Parties: Identification of Principal and Agent, including full legal names, commercial registration numbers, and addresses

2. Background: Context of the agreement, brief description of the Principal's business and the purpose of appointing the Agent

3. Definitions: Key terms used throughout the agreement, including Territory, Products/Services, and Effective Date

4. Appointment and Scope: Express appointment of Agent as sole and exclusive agent, detailed scope of authority and territory

5. Term and Renewal: Duration of the agreement, conditions for renewal, and notice periods

6. Agent's Rights and Obligations: Detailed responsibilities including promotion, sales targets, reporting requirements, and compliance with local laws

7. Principal's Rights and Obligations: Support to be provided, supply commitments, and training obligations

8. Commission Structure: Detailed commission calculations, payment terms, and currency specifications

9. Intellectual Property: Usage rights for Principal's trademarks, trade names, and other IP in the Territory

10. Confidentiality: Protection of confidential information and trade secrets

11. Termination: Grounds for termination, notice requirements, and consequences of termination

12. Post-Termination: Obligations after termination, including return of materials and settlement of accounts

13. Governing Law and Jurisdiction: Specification of Saudi law as governing law and jurisdiction for disputes

14. General Provisions: Standard boilerplate clauses including notices, amendments, and entire agreement