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Supply agreement template for goods (Word & PDF)
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For two companies, and the counsel drafting a framework for the supply of goods in the GCC. It covers purchase orders, delivery, inspection, delay compensation, force majeure and hardship. It is not a one-off sale and not a supply of labour.
Sources: 8 official sourcesNot legal advice
What this template includes
Agreed compensation and hardship are not the same rule
A goods supply agreement in Arabic and English between two companies in Saudi Arabia, the UAE, Qatar, Bahrain and Oman. It is a framework of purchase orders, not a one-off sale, which is the sale agreement, and not a supply of labour. A standalone confidentiality contract is the non-disclosure agreement, and the step before a contract is the memorandum of understanding. For a contract to perform a service, see the service agreement. This is a starting point. Have it reviewed by a lawyer licensed in the relevant jurisdiction before you use it.
What the supply agreement contains
Scope and the purchase order, delivery and the Incoterms term you choose, inspection, title and risk, price without a hard-coded tax rate, warranty, delay compensation, force majeure, hardship, a liability cap, assignment, confidentiality, and termination after notice where the statute requires notice.
- Saudi Arabia: agreed compensation in Articles 178 and 179, negotiation on hardship in Article 97, and a commercial claim is not heard after five years.[1][7]
- UAE: Article 224 of Decree-Law No. 25 of 2025 for exceptional circumstances. Agreed compensation in the repealed law was Article 390. No article number is stated for the new law.[2][3]
- Bahrain Articles 130, 226 and 227, Qatar Article 171, and Oman Articles 159, 267 and 172.[4][5][6]
- Kuwait: no article number. See penalty clause, force majeure, hardship and compensation.
The template
Supply agreement for goods
A framework contract for the supply of goods between two companies in the GCC. It is not a one-off sale, which is the sale agreement, and it is not a supply of labour. Replace every [bracket] and delete the option that does not apply. This is a starting point. Have it reviewed by a lawyer licensed in the relevant jurisdiction before you use it.
This agreement is made on [date] between [the supplier], registration [●] (the “Supplier”) and [the buyer], registration [●] (the “Buyer”). The annexes are Annex 1 (prices), [the specifications], and [the purchase-order form]. If they conflict, [this agreement / the signed purchase order] prevails.
The Supplier supplies [the goods] against purchase orders the Buyer issues. The estimated quantity is [●]. It is not a minimum unless this clause says so. Exclusivity: [exclusive in ● / not exclusive].
Drafting note
This framework is not a commercial agency and it does not register an agent.
Place of delivery: [●]. Time: [●] from the purchase order. Delivery term: [Incoterms 2020: ●]. Packing: [●].
Drafting note
Incoterms are a term the parties choose. They are not an article of the Civil Transactions Law.
The Buyer inspects the goods within [●] days of arrival. Notice of a patent defect is within [●] days of discovery, and of a latent defect within [●] days of discovery. Rejection is in writing and states the defect.
Title passes on [delivery / payment of the price]. Risk passes on [delivery / the point in the delivery term].
Prices are in Annex 1. They are [inclusive / exclusive] of value-added tax. The invoice is electronic as the applicable rules require. Payment is within [●] days of [an accepted invoice / acceptance].
Drafting note
Do not hard-code a tax rate. The invoice states the rate in force.
The Supplier warrants conformity to the specifications for [●] from acceptance. A defect in that period is replaced or repaired within [●] days of notice, without dropping a claim for compensation that remains.
If delivery is late, the Supplier pays [●] per day, capped at [●], unless the obligation is to pay a sum of money. A court may adjust the sum where the law allows.
Drafting note
In Saudi Arabia the agreed sum is not due if the debtor proves there was no loss, the court may reduce or increase it, and notice is not required where the obligation is not a sum of money.[1] In Bahrain it is not due if the debtor proves there was no loss and the court may reduce it, and the creditor cannot claim more except in case of fraud or gross fault.[4] In Oman it may be fixed in advance if the obligation is not a sum of money, and the court may adjust it.[6] See penalty clause and compensation.
A party is not liable for delay caused by an event beyond its reasonable control if it notifies the other in writing once it knows. If performance becomes impossible, the part that is impossible ends. The parties may agree that the Supplier bears force majeure: [bears it / does not].
Drafting note
In Saudi Arabia impossibility for a cause not attributable to the debtor ends the obligation and what corresponds to it, and the parties may agree that the debtor bears force majeure.[1] In Oman force majeure dissolves a bilateral contract of itself.[6] See force majeure.
If an exceptional general event that was not foreseeable makes performance onerous, the affected party requests negotiation within [●] days. The request does not stop performance. The parties amend in writing, or the matter is left to the court where the law allows.
Drafting note
In Saudi Arabia the debtor may request negotiation, and that does not entitle it to withhold performance.[1] In the UAE, Article 224: the court may reduce the onerous obligation to a reasonable limit or terminate, and an agreement to the contrary is void.[2] In Bahrain the judge may reduce an onerous obligation to a reasonable limit.[4] In Qatar, Article 171, and an agreement to the contrary is void.[5] In Oman the court may reduce the onerous obligation.[6]
The Supplier’s liability under this agreement does not exceed [●]. The cap does not cover fraud, gross fault, or bodily injury. Insurance: [policy type and limit].
Drafting note
A cap is an agreement. It does not override a rule the parties cannot contract out of, including Article 224 in the UAE.[2]
Rights and obligations under this agreement are not assigned without written consent. Set-off: [allowed for sums due under this agreement / not allowed].
Each party keeps non-public prices and specifications confidential for [●]. If the information includes personal data, that party follows the law in force in the country chosen in clause 16. If a standalone confidentiality contract is needed, use the non-disclosure agreement.
Drafting note
For the term, see personal data protection. This clause does not recite a statutory article.
The term is [●] from [date]. It renews [● / it does not renew]. Either party may end it on [●] days’ notice, or immediately for [a material breach after notice / insolvency]. Purchase orders accepted before the end are performed.
Drafting note
In Saudi Arabia termination for non-performance follows notice of default.[1]
The parties comply with the anti-bribery and sanctions rules in force in the chosen country. Saudi local content, if a programme applies: [● / not applicable].
Drafting note
This page does not name a programme whose text was not read. Write the programme if the contract is inside it.
This agreement is governed by the law of [the country]. A dispute goes to [the commercial courts of ● / arbitration under ●]. If the languages conflict, [Arabic] prevails.
Drafting note
In Saudi Arabia commercial claims are not heard after five years from when the right arose, unless a specific text says otherwise.[7] On arbitration see arbitration. Before signature the draft can be read in contract review.
Supplier: name [●] · signature [●] · date [●]
Buyer: name [●] · signature [●] · date [●]
Notes for Saudi Arabia
The Civil Transactions Law, and the Commercial Courts Law on hearing a claim.[1][7]
| Point | Text |
|---|---|
| Agreed compensation | It may be fixed in advance unless the obligation is a sum of money, and notice is not required (Article 178).[1] |
| Adjustment | It is not due if the debtor proves there was no loss, and the court may reduce or increase it (Article 179).[1] |
| Hardship | The debtor may request negotiation, and that does not entitle it to withhold performance (Article 97).[1] |
| Impossibility | If performance becomes impossible for a cause not attributable to the debtor, what corresponds to it ends (Article 110).[1] |
| Force majeure | The parties may agree that the debtor bears it (Article 174).[1] |
| Termination | It follows notice of default (Article 107).[1] |
| Hearing the claim | Commercial claims are not heard after five years from when the right arose, unless a specific text says otherwise (Commercial Courts Law, Article 24).[7] |
Notes for the United Arab Emirates
Decree-Law No. 25 of 2025, and the repealed law on agreed compensation.[2][3]
| Point | Text |
|---|---|
| Exceptional circumstances | The court may reduce an onerous obligation to a reasonable limit or terminate, and an agreement to the contrary is void (Article 224).[2] |
| Agreed compensation | Article 390 of Law No. 5 of 1985 allowed compensation to be fixed in advance, with a power in the judge to adjust it. It is repealed from 1 June 2026. This page states no corresponding article of the new law.[3] |
| Commercial transactions | Commercial contracts are also governed by Decree-Law No. 50 of 2022. No article number of it is stated here.[8] |
Notes for Bahrain
The Civil Code, Decree-Law No. 19 of 2001.[4]
| Point | Text |
|---|---|
| Hardship | The judge may reduce an onerous obligation to a reasonable limit (Article 130).[4] |
| Agreed compensation | It is not due if the debtor proves there was no loss, and the court may reduce it (Article 226).[4] |
| Above the sum | The creditor cannot claim more except in case of fraud or gross fault (Article 227).[4] |
Notes for Qatar and Oman
The Qatar Civil Law and the Oman Civil Transactions Law.[5][6]
| Country | Text |
|---|---|
| Qatar | Where exceptional general events were unforeseeable, the judge may reduce an onerous obligation to a reasonable limit, and an agreement to the contrary is void (Article 171).[5] |
| Oman | The court may reduce an onerous obligation (Article 159). Compensation may be fixed in advance if the obligation is not a sum of money, and the court may adjust it (Article 267). Force majeure dissolves a bilateral contract of itself (Article 172).[6] |
Kuwait
- Article numbers for hardship and the penalty clause in the Kuwait Civil Code were not verified. Do not copy a number from another country. Read the text with a Kuwaiti lawyer.
Annex 1: Prices
A purchase order refers to this annex. Add rows for the items.
| Item | Description | Unit | Price | Lead time |
|---|---|---|---|---|
| 1 | [Item] | [Unit] | [●] | [●] |
| 2 | [Item] | [Unit] | [●] | [●] |
| 3 | [Item] | [Unit] | [●] | [●] |