12 October، 2026
Supply Contract Template: Clauses That Protect Supplier and Buyer

Whether you are the supplier or the buyer, the supply contract decides when goods are delivered, to what specifications, when the price is paid, and what happens on delay or defect. Most commercial disputes we see start with an incomplete supply contract. Here is a supply contract template ready to copy, and the clauses that protect each side.

Supply contract template (general form)

Supply Contract This contract is made on [ / / ] between: First Party (Supplier): [company name], CR no. [ ], address [ ], represented by [name and title]. Second Party (Buyer): [company name], CR no. [ ], address [ ], represented by [name and title]. Clause 1: Subject. The Supplier shall supply [description of goods] according to the attached specifications and schedule of quantities, which form an integral part of this contract. Clause 2: Quantities and Dates. Supply shall be [in one delivery on ... / in instalments under the attached schedule] at [location]. Clause 3: Price and Payment. The contract value is SAR [ ] [including / excluding] VAT, payable: [ ]% in advance, [ ]% on delivery, and [ ]% within ( ) days of invoice. Clause 4: Delivery and Inspection. The Buyer shall inspect the goods within ( ) days of delivery and notify the Supplier in writing of any defect or shortfall, failing which delivery is deemed final, except for hidden defects. Clause 5: Warranty. The Supplier warrants the goods are sound and conform to the specifications for [ ] from delivery, and shall repair or replace defective goods within ( ) days of notice. Clause 6: Delay. If the Supplier delivers late, it shall pay a penalty of [ ]% of the late instalment's value for each week of delay, up to a maximum of [ ]%, and the Buyer may terminate if the delay exceeds ( ) days. Clause 7: Late Payment. If the Buyer pays late, the Supplier may suspend further deliveries until payment, without prejudice to its claim. Clause 8: Force Majeure. Neither party is liable for delay caused by force majeure, provided it notifies the other party in writing within ( ) days of the event. Clause 9: Governing Law and Disputes. This contract is governed by the laws of the Kingdom of Saudi Arabia; disputes shall be settled amicably within ( ) days, failing which [the competent Commercial Court in ... / arbitration under ...]. First Party: [name, signature and stamp] Second Party: [name, signature and stamp]

Clauses that protect each side

For the buyerFor the supplier
Precise, attached specificationsAn advance payment
A delay penalty and right to terminateA set inspection period after which delivery is final
Warranty and replacement of defectsThe right to suspend supply on non-payment
The right to reject non-conforming goodsA cap on penalties
Clauses that protect each side — Supply Contract Template (Usus Law Firm infographic)

For other mistakes that cause disputes read mistakes in commercial contracts, and to collect a late price read debt collection.

Frequently asked questions

Is a purchase order enough instead of a supply contract?

A signed purchase order proves the agreement, but it usually lacks delay, warranty and dispute clauses; a contract protects better for repeated or large supplies.

Which court hears supply disputes between companies?

Usually the Commercial Court. Read the Commercial Courts Law.

Can a delay penalty be unlimited?

It is better to set a cap, and the court may review an excessive penalty clause.

A high-value supply contract?

The Usus Law Firm team drafts and reviews supply contracts within contract drafting and handles their disputes within commercial cases, in Riyadh and Tabuk.

Legal review: the Usus Law Firm team

A select team of lawyers and legal advisers licensed by the Saudi Ministry of Justice, working from Riyadh and Tabuk, with experience before the general, commercial, labor, criminal, personal status and administrative courts. Every article is reviewed before publication and updated when laws or regulations change.

Last reviewed: 12 October 2026

This article is general legal information and is not a substitute for advice on your specific case. Court proceedings in Saudi Arabia are in Arabic; the official Arabic text of each law prevails.

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