When should your business sign one master services agreement and then a statement of work for each project, and what must each state?

When a repeat relationship outgrows a single services agreement

A standalone services agreement fits when the deal is one closed project with a start, an end and a set consideration, which is what the Services Agreement template C-01 covers. When you deal repeatedly with the same client or the same vendor, repeating the full contract for every project eats negotiation time and creates diverging versions of the core terms, so the confidentiality clause in the first project ends up different from the second without anyone intending it. The master agreement solves this by separating what is fixed in the relationship from what changes from one project to the next.

• The same client or vendor comes back with more than one project in a year, or you expect that from the start of the relationship.
• The legal terms are the same across projects and differ only in scope, deliverables, consideration and dates.
• New work starts on a message or a call with no document referring to the terms agreed before.
• The client's procurement team issues purchase orders for each project and needs a fixed reference for them to point to.
• You work with more than one team or branch of the same client and want uniform terms for all of them.

If the relationship is still at the exploration stage and the scope is not yet defined, the first step is a mutual NDA, C-08, which protects what the parties share during preparation, and the master agreement follows once it is clear the relationship will continue. If the relationship is about supplying goods rather than providing services, the supply agreement guide is the closer reference.

What stays fixed in the master agreement and what moves into each statement of work

The simple rule: every term that governs the whole relationship and does not change from project to project belongs in the master agreement, and everything that describes a specific project belongs in the statement of work. If you repeat a fixed term inside the statement of work in different wording, you open the door to a conflict between the two documents. These are the clauses that stay in the master agreement:

• Confidentiality: what counts as confidential information, who may be given access to it, and how long the duty survives after the relationship ends.
• Intellectual property: who owns the deliverables, which prior tools and know-how remain the provider's, and when rights pass.
• Liability limits: the cap on compensation, the excluded types of loss, and the cases carved out of the cap.
• Indemnity: what each party must cover if its breach leads to a third-party claim.
• Governing law and dispute forum: Saudi law, and the competent court or arbitration as the parties agree.
• Term and renewal: the initial term of the master agreement, how it renews, and the non-renewal notice.

The statement of work, by contrast, is a short operational document written by the project team and reviewed by whoever handles legal, and it must set out the following clearly enough for a third party who does not know the project to understand it:

• Scope: what will be done, and what is expressly out of scope.
• Deliverables: each deliverable by name, form and specification.
• Milestones and dates: the stages of delivery and the delivery date of each stage.
• Consideration: the amount in riyals and how it is calculated, fixed, hourly or tied to milestones, and the invoicing schedule.
• Acceptance criteria: how conformity of a deliverable is measured, and who at the client has authority to accept.
• Reference: the number and date of the statement, and a statement that it is subject to the master agreement.

How work starts: a purchase order referencing the agreement, or a signed statement of work

This is a decision to make before drafting the ordering clause in the agreement, because the answer changes the wording of the clause itself. In the first option, work starts when the client issues a written purchase order that refers to the master agreement, an option that suits clients whose procurement systems run on purchase orders and who do not sign extra documents for each project. In that case the ordering clause must set the minimum details the purchase order contains, and state that terms printed on the purchase order do not change the agreement.

In the second option, no work starts until both parties sign a statement of work, and a purchase order, if issued, is only an internal finance document on the client's side. This option is a little slower but clearer in a disagreement, because scope, consideration and acceptance criteria are signed by both parties in one document. Whichever you choose, write into the same clause what happens if work actually starts before the required document is complete, because that is the situation that generates the most disputes.

The periods the parties fill in, which the template does not impose

Four periods recur in every master agreement, and all of them are fields the parties agree and write in, not fixed statutory periods. This guide states no default period as a legal requirement: the right period is the one that suits the nature of the service and what both parties can actually meet, and it must be written in days or months without ambiguity.

• Acceptance review window: the number of days the client has to review a deliverable after delivery, and what follows if it lapses without a reply. It can be set in the master agreement as a general rule and adjusted by the statement of work for a specific project.
• Invoice payment period: the number of days from receipt of a correct invoice to payment, and what makes an invoice correct and acceptable.
• Initial term: the start date and the number of months or years the master agreement runs.
• Non-renewal notice: if the agreement renews automatically, how many days before the end of the term the notice must be sent, and by what means.

Make sure the periods in the statement of work do not differ from those in the master agreement unless you intend it and say so expressly, which brings us to the order of precedence.

Order of precedence, change control and ending a single statement of work

The order of precedence settles which document prevails in a conflict. The common order is that the master agreement prevails over the statement of work, except in a clause where the statement expressly says it departs from the agreement for that project alone, with the purchase order last. What matters is that the order is written down, and that any exception is express rather than inferred.

Change control is how any change to the scope of a running project is recorded. A verbal change or one made in a passing message is what most often spoils a statement of work, because the provider does extra work and the parties then disagree on its price or its effect on the dates. A clear change procedure has the following elements:

• A written change request describing the requested change to scope or deliverables.
• The provider's estimate of the change's effect on consideration, dates and acceptance criteria.
• A numbered change order signed by both parties that refers to the number of the original statement of work.
• No start on the changed work before signature, unless the agreement says otherwise.

Ending a single statement of work must be kept separate from ending the master agreement. Write into the agreement that the expiry or termination of one statement does not end the agreement or any other running statements, and set out what is due on early termination for work done to date and which partial deliverables are handed over. Conversely, if the master agreement itself ends, state whether running statements continue to completion under its terms or end with it.

The Arabic text prevails, and the Commercial Transactions Law is on its way

Many master agreements with international partners or multinational companies are written in two languages. The risk in a bilingual contract is that the two versions differ on a core clause, such as the liability cap or the acceptance window, and each party holds on to the version that suits it. So the contract must state expressly which version prevails in case of difference. In Sighaty's bilingual templates the contract states that the Arabic text prevails. The same applies to statements of work and change orders: if they will be written in English only, state in the master agreement how they are treated and which text prevails for them.

As for the Commercial Transactions Law, the Council of Ministers approved it on 27 October 2026, and its text had not been published in the Umm Al-Qura gazette as of the date of this guide, so we build nothing on its provisions before they are published. What you can do now is keep your contract file organised: one master agreement for each repeat relationship, numbered statements of work, and signed change orders, so that review is easy once the text is published. Template C-02 stays under the review of a licensed Saudi lawyer who keeps it current as the law changes. To follow what we know about the law so far, see our guide on the Cabinet's approval of the Commercial Transactions Law.

The checklist: numbered steps before signing the agreement and the first statement

1. Sign a mutual NDA before exchanging the details of the first project, if one is not signed yet.
2. Decide whether the relationship is one closed project that a services agreement covers, or a repeat relationship that needs a master agreement.
3. Fix in the master agreement confidentiality, intellectual property, liability limits, indemnity, governing law and dispute forum, and term and renewal.
4. Choose how work starts, a purchase order referencing the agreement or a signed statement of work only, and draft the ordering clause on that basis.
5. Fill in the four periods in writing: the acceptance review window, the invoice payment period, the initial term, and the non-renewal notice.
6. Write the order of precedence between the agreement, the statement and the purchase order, and make any exception express.
7. Adopt a change control procedure with a numbered change order signed by both parties.
8. State that ending a statement of work does not end the agreement, and set out what happens to running statements if the agreement ends.
9. State that the Arabic text prevails, then draft the first statement of work with its scope, deliverables, milestones, consideration and acceptance criteria.

This guide was prepared under the supervision of Abdulaziz Sukkar, a licensed Saudi lawyer and the founder of Sighaty. Last updated: 2 November 2026. This guide is general information, not legal advice on a specific case, and the Arabic text prevails in case of difference.

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