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Construction Payment Contract Template for Saudi Arabia

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Key Requirements PROMPT example:

Construction Payment Contract

"I need a Construction Payment Contract for a large-scale residential development project in Riyadh, with milestone-based payments and a 10% retention clause, incorporating specific requirements for Shariah-compliant bank guarantees."

Document background
The Construction Payment Contract is a critical document used in Saudi Arabian construction projects to establish and regulate payment arrangements between contracting parties. It is particularly relevant in an environment where construction projects must comply with both modern commercial practices and Islamic Shariah principles. This document is essential when parties need to establish clear payment terms, mechanisms, and securities for construction works, whether in public or private sector projects. It incorporates requirements from Saudi Arabian legislation, including the Government Tenders and Procurement Law and Commercial Courts Law, while providing flexibility for project-specific requirements. The contract typically addresses progress payments, milestone payments, retention amounts, payment security, and dispute resolution procedures, making it suitable for various construction project types and sizes in the Saudi market.
Suggested Sections

1. Parties: Identification of the parties entering into the contract, including full legal names, addresses, and registration details

2. Background: Context of the agreement, including project reference and relationship between parties

3. Definitions: Definitions of key terms used throughout the contract

4. Scope of Works: Clear description of the construction works for which payments are being made

5. Contract Price: Total contract value and breakdown of payment components

6. Payment Terms: Detailed payment schedule, milestones, and conditions for payment

7. Payment Procedures: Process for submitting and processing payment applications, including required documentation

8. Payment Security: Requirements for payment bonds, guarantees, or other security measures

9. Variations and Adjustments: Process for handling changes to scope and corresponding payment adjustments

10. Default and Late Payment: Consequences of payment defaults and late payments, including applicable interest

11. Dispute Resolution: Procedures for resolving payment-related disputes in accordance with Saudi law

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

13. Notices: Process for serving notices related to payments

14. Execution: Signature blocks and execution requirements

Optional Sections

1. Advance Payment: Terms for advance payments, typically used for large projects requiring significant upfront costs

2. Performance Bonds: Requirements for performance bonds, used when additional security is needed

3. Retention: Terms for retention money, used when withholding part of payment is required

4. Currency and Exchange Rates: Provisions for handling multiple currencies, used in international contracts

5. Government Approvals: Requirements for government permits affecting payment, used for regulated projects

6. Force Majeure: Impact on payment obligations during force majeure events

7. Assignment and Subcontracting: Rules for payment rights assignment, used when subcontractors are involved

8. Insurance Requirements: Insurance obligations affecting payment, used for high-risk projects

Suggested Schedules

1. Schedule 1 - Payment Schedule: Detailed breakdown of payment milestones and amounts

2. Schedule 2 - Rate Sheet: Unit rates and prices for various components of work

3. Schedule 3 - Form of Payment Application: Template for submitting payment applications

4. Schedule 4 - Form of Payment Certificate: Template for payment certificates to be issued

5. Schedule 5 - Project Timeline: Project schedule aligned with payment milestones

6. Schedule 6 - Scope of Works Details: Detailed technical specifications linked to payment items

7. Appendix A - Required Documentation: List of documents required for payment processing

8. Appendix B - Bank Details: Banking information for payment transfers

9. Appendix C - Performance Security Forms: Templates for various security instruments

Authors

Alex Denne

Head of Growth (Open Source Law) @ 黑料视频 | 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

Real Estate Development

Infrastructure Development

Civil Engineering

Commercial Property

Residential Property

Industrial Construction

Government Infrastructure

Energy Construction

Transportation Infrastructure

Relevant Teams

Legal

Finance

Commercial

Operations

Project Management

Construction

Procurement

Risk Management

Contract Administration

Claims Management

Relevant Roles

Project Manager

Construction Manager

Contract Administrator

Commercial Director

Finance Manager

Quantity Surveyor

Construction Director

Legal Counsel

Chief Financial Officer

Operations Director

Project Engineer

Site Manager

Procurement Manager

Claims Manager

Risk 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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