{"id":7153,"date":"2026-10-05T12:35:58","date_gmt":"2026-10-05T09:35:58","guid":{"rendered":"https:\/\/ususlawfirm.com\/commercial-contract-mistakes-saudi\/"},"modified":"2026-10-11T15:14:18","modified_gmt":"2026-10-11T12:14:18","slug":"commercial-contract-mistakes-saudi","status":"publish","type":"post","link":"https:\/\/ususlawfirm.com\/en\/commercial-contract-mistakes-saudi\/","title":{"rendered":"Commercial Contract Mistakes: 10 Clauses That Cause Disputes"},"content":{"rendered":"<style>.usus-tbl{border-collapse:collapse;width:100%;max-width:760px;margin:12px 0 20px;font-size:15px}.usus-tbl th{background:#f4eff9;color:#2A124A;font-weight:700;text-align:right;padding:9px 12px;border-bottom:2px solid #C9A227}.usus-tbl td{padding:9px 12px;border-bottom:1px solid #e5ddec;vertical-align:top}<\/style>\n<div dir=\"ltr\" style=\"text-align: left;\">\n<p>Most commercial disputes that reach the courts don&#8217;t start with bad faith. They start with <strong>a contract that was written incompletely<\/strong>: a vague clause, an undefined period, or nothing about what happens if someone is late. A good contract won&#8217;t always prevent a dispute, but it makes the dispute quick to resolve, with a predictable outcome. Here are the <strong>most common commercial contract mistakes<\/strong> in Saudi Arabia, and how to avoid each one before you sign.<\/p>\n<h2>Ten common mistakes in commercial contracts<\/h2>\n<table class=\"usus-tbl\">\n<thead>\n<tr>\n<th>The mistake<\/th>\n<th>What happens in a dispute<\/th>\n<th>How to avoid it<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>1. Parties not precisely identified<\/td>\n<td>Argument over who is bound: the company or the owner personally<\/td>\n<td>Write the official name, the Commercial Registration number, and the signatory&#8217;s capacity and authority<\/td>\n<\/tr>\n<tr>\n<td>2. A general description of the work or goods<\/td>\n<td>Each side reads &#8220;what was required&#8221; its own way<\/td>\n<td>A detailed specifications annex and a delivery schedule<\/td>\n<\/tr>\n<tr>\n<td>3. A price with no payment mechanism<\/td>\n<td>Disputes over when instalments are due and on what terms<\/td>\n<td>Payments tied to clear delivery milestones<\/td>\n<\/tr>\n<tr>\n<td>4. Nothing about delay<\/td>\n<td>You must prove the loss and its amount in court<\/td>\n<td>A clear penalty clause, and a notice period before termination<\/td>\n<\/tr>\n<tr>\n<td>5. No payment security<\/td>\n<td>A judgment for the amount takes time and is then hard to collect<\/td>\n<td>A promissory note, a bank guarantee or a surety<\/td>\n<\/tr>\n<tr>\n<td>6. No delivery and acceptance procedure<\/td>\n<td>Disputes over whether and when the work was delivered<\/td>\n<td>A signed handover record, and a set period for objections<\/td>\n<\/tr>\n<tr>\n<td>7. No termination clause<\/td>\n<td>One party is stuck in a contract that no longer serves it<\/td>\n<td>The grounds for termination, its effects, and what is paid on termination<\/td>\n<\/tr>\n<tr>\n<td>8. Ignoring intellectual property and confidentiality<\/td>\n<td>Disputes over who owns designs, software or customer lists<\/td>\n<td>An express clause on ownership, confidentiality and a reasonable non-compete<\/td>\n<\/tr>\n<tr>\n<td>9. No chosen method of dispute resolution<\/td>\n<td>An extra dispute over which court or body has jurisdiction<\/td>\n<td>Choose the competent court or arbitration, plus its seat and language<\/td>\n<\/tr>\n<tr>\n<td>10. Verbal amendments<\/td>\n<td>Later agreements with no evidence<\/td>\n<td>A clause requiring every amendment to be in writing and signed<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<figure class=\"usus-ig usus-ig-7153-1\"><img class=\"wp-image-8070\" src=\"https:\/\/ususlawfirm.com\/wp-content\/uploads\/2026\/10\/usus-7153-1.webp\" width=\"1200\" height=\"1723\" alt=\"Ten common mistakes in commercial contracts \u2014 Commercial Contract Mistakes (Usus Law Firm infographic)\" loading=\"lazy\" decoding=\"async\" srcset=\"https:\/\/ususlawfirm.com\/wp-content\/uploads\/2026\/10\/usus-7153-1.webp 1200w, https:\/\/ususlawfirm.com\/wp-content\/uploads\/2026\/10\/usus-7153-1-768x1103.webp 768w, https:\/\/ususlawfirm.com\/wp-content\/uploads\/2026\/10\/usus-7153-1-1070x1536.webp 1070w, https:\/\/ususlawfirm.com\/wp-content\/uploads\/2026\/10\/usus-7153-1-640x919.webp 640w, https:\/\/ususlawfirm.com\/wp-content\/uploads\/2026\/10\/usus-7153-1-400x574.webp 400w, https:\/\/ususlawfirm.com\/wp-content\/uploads\/2026\/10\/usus-7153-1-367x527.webp 367w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><\/figure>\n<h2>The penalty clause: why it deserves attention<\/h2>\n<p>A penalty clause (\u0627\u0644\u0634\u0631\u0637 \u0627\u0644\u062c\u0632\u0627\u0626\u064a) sets in advance what the late or defaulting party pays, which spares you the burden of proving your loss in detail. The <a href=\"https:\/\/ususlawfirm.com\/en\/saudi-civil-transactions-law\/\">Civil Transactions Law<\/a> regulates agreed compensation, including the court&#8217;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.<\/p>\n<h2>Contracts and security: make enforcement easy<\/h2>\n<p>The difference between a contract that &#8220;wins you the case&#8221; and a contract that &#8220;gets you paid&#8221; is security. A document that counts as an enforceable instrument (\u0633\u0646\u062f \u062a\u0646\u0641\u064a\u0630\u064a), such as a promissory note, often lets you go straight to the Enforcement Court without a long lawsuit. Read <a href=\"https:\/\/ususlawfirm.com\/en\/promissory-note-saudi-arabia\/\">promissory notes<\/a> and <a href=\"https:\/\/ususlawfirm.com\/en\/enforcement-court-saudi-arabia\/\">the Enforcement Court<\/a>.<\/p>\n<h2>Before you sign: a quick checklist<\/h2>\n<ul>\n<li>Does the person signing for the other party have authority to sign?<\/li>\n<li>Is every number, amount and period written down, with no phrases like &#8220;as soon as possible&#8221;?<\/li>\n<li>Does the contract say what happens on delay, on breach and on termination?<\/li>\n<li>Is there security for payment or performance?<\/li>\n<li>Are the annexes signed and referred to in the contract?<\/li>\n<li>Is the dispute resolution method clear? Read <a href=\"https:\/\/ususlawfirm.com\/en\/commercial-arbitration-saudi-arabia\/\">commercial arbitration<\/a>.<\/li>\n<\/ul>\n<p>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.<\/p>\n<h2>Frequently asked questions<\/h2>\n<h3>Are an electronic contract or emails enough?<\/h3>\n<p>They can serve as evidence, especially since the <a href=\"https:\/\/ususlawfirm.com\/en\/saudi-law-of-evidence\/\">Law of Evidence<\/a> recognised digital evidence, but a detailed written contract remains stronger and resolves a dispute faster.<\/p>\n<h3>Should I use a ready-made contract template from the internet?<\/h3>\n<p>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.<\/p>\n<h2>Need a contract drafted or reviewed?<\/h2>\n<p>The <strong>Usus Law Firm<\/strong> team handles <a href=\"https:\/\/ususlawfirm.com\/en\/service\/contract-drafting-and-review\/\">contract drafting and review<\/a> and <a href=\"https:\/\/ususlawfirm.com\/en\/service\/commercial-claims-between-companies\/\">commercial claims between companies<\/a>, in <a href=\"https:\/\/ususlawfirm.com\/en\/lawyer-in-riyadh\/\">Riyadh<\/a> and <a href=\"https:\/\/ususlawfirm.com\/en\/lawyer-in-tabuk\/\">Tabuk<\/a>, with advice in English.<\/p>\n<p style=\"font-size:12.5px;color:#6a6178;border-top:1px solid #e6ddd0;padding-top:10px;margin-top:16px\"><em>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.<\/em><\/p>\n<div class=\"usus-qbox\">\n<h2>Request a quick consultation<\/h2>\n<p>Leave your name and mobile number, and a lawyer from our Riyadh or Tabuk office will call you during working hours. We advise in English.<\/p>\n\n<div class=\"wpcf7 no-js\" id=\"wpcf7-f6963-o1\" lang=\"en-US\" dir=\"ltr\" data-wpcf7-id=\"6963\">\n<div class=\"screen-reader-response\"><p role=\"status\" aria-live=\"polite\" aria-atomic=\"true\"><\/p> <ul><\/ul><\/div>\n<form action=\"\/en\/wp-json\/wp\/v2\/posts\/7153#wpcf7-f6963-o1\" method=\"post\" class=\"wpcf7-form init\" aria-label=\"Contact form\" novalidate=\"novalidate\" data-status=\"init\">\n<fieldset class=\"hidden-fields-container\"><input type=\"hidden\" name=\"_wpcf7\" value=\"6963\" \/><input type=\"hidden\" name=\"_wpcf7_version\" value=\"6.2.2\" \/><input type=\"hidden\" name=\"_wpcf7_locale\" value=\"en_US\" \/><input type=\"hidden\" name=\"_wpcf7_unit_tag\" value=\"wpcf7-f6963-o1\" \/><input type=\"hidden\" name=\"_wpcf7_container_post\" value=\"0\" \/><input type=\"hidden\" name=\"_wpcf7_posted_data_hash\" value=\"\" \/>\n<\/fieldset>\n<span id=\"wpcf7-6acbfbe43e2c3-wrapper\" class=\"wpcf7-form-control-wrap cf7apps-honeypot-wrap honeypot-qf-wrap\" style=\"position:absolute;width:1px;height:1px;padding:0;margin:-1px;overflow:hidden;clip:rect(0,0,0,0);white-space:nowrap;border:0;\"><label for=\"wpcf7-6acbfbe43e2c3-field\" class=\"hp-message\">Please leave this field empty.<\/label><input id=\"wpcf7-6acbfbe43e2c3-field\"  class=\"wpcf7-form-control wpcf7-text\" type=\"text\" name=\"honeypot-qf\" value=\"\" autocomplete=\"new-password\" tabindex=\"1000\" data-cf7apps-tabindex=\"1000\" \/><\/span>\n<div class=\"usus-qf\">\n<div class=\"f\"><label for=\"q-name\">Name<\/label><span class=\"wpcf7-form-control-wrap\" data-name=\"q-name\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-text wpcf7-validates-as-required\" id=\"q-name\" autocomplete=\"name\" aria-required=\"true\" aria-invalid=\"false\" placeholder=\"Your name\" value=\"\" type=\"text\" name=\"q-name\" \/><\/span><\/div>\n<div class=\"f\"><label for=\"q-phone\">Mobile<\/label><span class=\"wpcf7-form-control-wrap\" data-name=\"q-phone\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-tel wpcf7-validates-as-required wpcf7-text wpcf7-validates-as-tel\" id=\"q-phone\" autocomplete=\"tel\" aria-required=\"true\" aria-invalid=\"false\" placeholder=\"05xxxxxxxx\" value=\"\" type=\"tel\" name=\"q-phone\" \/><\/span><\/div>\n<div class=\"f\"><label for=\"q-city\">City<\/label><span class=\"wpcf7-form-control-wrap\" data-name=\"q-city\"><select class=\"wpcf7-form-control wpcf7-select wpcf7-validates-as-required\" id=\"q-city\" aria-required=\"true\" aria-invalid=\"false\" name=\"q-city\"><option value=\"Riyadh\">Riyadh<\/option><option value=\"Tabuk\">Tabuk<\/option><option value=\"Other city\">Other city<\/option><\/select><\/span><\/div>\n<div class=\"f w\"><label for=\"q-msg\">Your case in brief (optional)<\/label><span class=\"wpcf7-form-control-wrap\" data-name=\"q-msg\"><textarea cols=\"40\" rows=\"2\" maxlength=\"600\" class=\"wpcf7-form-control wpcf7-textarea\" id=\"q-msg\" aria-invalid=\"false\" placeholder=\"One or two lines are enough\" name=\"q-msg\"><\/textarea><\/span><\/div>\n<div class=\"s\"><input class=\"wpcf7-form-control wpcf7-submit has-spinner\" type=\"submit\" value=\"Request a call from a lawyer\" \/><\/div>\n<\/div><div class=\"wpcf7-response-output\" aria-hidden=\"true\"><\/div>\n<\/form>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Most commercial disputes that reach the courts don&#8217;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&#8217;t always prevent a dispute, but it makes the dispute quick to resolve, with a predictable [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":8274,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[83],"tags":[],"class_list":["post-7153","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commercial-law"],"acf":[],"featured_image_src":{"landsacpe":["https:\/\/ususlawfirm.com\/wp-content\/uploads\/2026\/10\/usus-cover-7153-1140x445.jpg?wsr",1140,445,true],"list":["https:\/\/ususlawfirm.com\/wp-content\/uploads\/2026\/10\/usus-cover-7153-463x348.jpg?wsr",463,348,true],"medium":["https:\/\/ususlawfirm.com\/wp-content\/uploads\/2026\/10\/usus-cover-7153-300x169.jpg?wsr",300,169,true],"full":["https:\/\/ususlawfirm.com\/wp-content\/uploads\/2026\/10\/usus-cover-7153.jpg?wsr",1200,675,false]},"_links":{"self":[{"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/posts\/7153","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/comments?post=7153"}],"version-history":[{"count":1,"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/posts\/7153\/revisions"}],"predecessor-version":[{"id":8071,"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/posts\/7153\/revisions\/8071"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/media\/8274"}],"wp:attachment":[{"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/media?parent=7153"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/categories?post=7153"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/tags?post=7153"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}