Contract drafting and review – contract lawyer in Riyadh

Most commercial disputes that reach the courts don't start with bad faith. They start with a contract that was written incompletely: a vague clause, an undefined period, or nothing about what happens if someone is late. A good contract won't always prevent a dispute, but it makes the dispute quick to resolve, with a predictable outcome. Here are the most common commercial contract mistakes in Saudi Arabia, and how to avoid each one before you sign.

Ten common mistakes in commercial contracts

The mistakeWhat happens in a disputeHow to avoid it
1. Parties not precisely identifiedArgument over who is bound: the company or the owner personallyWrite the official name, the Commercial Registration number, and the signatory's capacity and authority
2. A general description of the work or goodsEach side reads "what was required" its own wayA detailed specifications annex and a delivery schedule
3. A price with no payment mechanismDisputes over when instalments are due and on what termsPayments tied to clear delivery milestones
4. Nothing about delayYou must prove the loss and its amount in courtA clear penalty clause, and a notice period before termination
5. No payment securityA judgment for the amount takes time and is then hard to collectA promissory note, a bank guarantee or a surety
6. No delivery and acceptance procedureDisputes over whether and when the work was deliveredA signed handover record, and a set period for objections
7. No termination clauseOne party is stuck in a contract that no longer serves itThe grounds for termination, its effects, and what is paid on termination
8. Ignoring intellectual property and confidentialityDisputes over who owns designs, software or customer listsAn express clause on ownership, confidentiality and a reasonable non-compete
9. No chosen method of dispute resolutionAn extra dispute over which court or body has jurisdictionChoose the competent court or arbitration, plus its seat and language
10. Verbal amendmentsLater agreements with no evidenceA clause requiring every amendment to be in writing and signed

The penalty clause: why it deserves attention

A penalty clause (الشرط الجزائي) sets in advance what the late or defaulting party pays, which spares you the burden of proving your loss in detail. The Civil Transactions Law regulates agreed compensation, including the court's power in certain cases to review the amount if it is excessive or if the actual loss is greater. So keep the clause reasonable and linked to a real, foreseeable loss.

Contracts and security: make enforcement easy

The difference between a contract that "wins you the case" and a contract that "gets you paid" is security. A document that counts as an enforceable instrument (سند تنفيذي), such as a promissory note, often lets you go straight to the Enforcement Court without a long lawsuit. Read promissory notes and the Enforcement Court.

Before you sign: a quick checklist

  • Does the person signing for the other party have authority to sign?
  • Is every number, amount and period written down, with no phrases like "as soon as possible"?
  • Does the contract say what happens on delay, on breach and on termination?
  • Is there security for payment or performance?
  • Are the annexes signed and referred to in the contract?
  • Is the dispute resolution method clear? Read commercial arbitration.

If you sign a bilingual contract, check that the Arabic and English texts match. Saudi courts work in Arabic, so the Arabic text is the one a judge will read.

Frequently asked questions

Are an electronic contract or emails enough?

They can serve as evidence, especially since the Law of Evidence recognised digital evidence, but a detailed written contract remains stronger and resolves a dispute faster.

Should I use a ready-made contract template from the internet?

A generic template is a starting point, but it knows nothing about the details or risks of your deal. The most dangerous clauses in a contract are the ones that were never written.

Need a contract drafted or reviewed?

The Usus Law Firm team handles contract drafting and review and commercial claims between companies, in Riyadh and Tabuk, with advice in English.

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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