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Subcontract Template: Linking the Contractor to the Subcontractor, Certified by a Licensed Saudi Lawyer
- Category
- Commercial contracts
- Language
- Arabic + English
- Format
- Editable DOCX
CERTIFICATION RECORD
This template was prepared and reviewed by a licensed Saudi lawyer and is kept current as the Kingdom's regulations change.
Where an Arabic and an English text exist, the Arabic text prevails
A subcontract governing scope, pricing, retention, delay compensation, defects liability, and termination, aligned with the prime contract and bilingual.
A subcontractor works on a site whose terms they do not fully know: the prime contract between the contractor and the client carries dates, penalties, and acceptance standards, and the subcontractor is practically bound by them without being a party to them. That is where most disputes begin: a delay caused by the client borne by the subcontractor, retention that is never released because the prime contract has not closed, or work rejected against a standard that was never communicated. A well-drafted subcontract handles this by linking the two contracts clearly: what passes down from the prime contract, and what stays between the contractor and the subcontractor alone. Sighaty template C-12 is written for the Saudi context and the provisions of the Civil Transactions Law, and it covers scope, pricing, payment, retention, delay compensation, defects liability, termination, and the dispute forum, in two parallel languages with the Arabic text prevailing on any difference.
Get the Subcontract TemplateC-12What this contract is and when you need it
A subcontract is the agreement by which a main contractor passes part of its obligations to another business that performs them in its own name and at its own responsibility, while the main contractor remains answerable to its client for the whole of the work. You need it in construction, contracting, operation and maintenance, information technology, and any project whose works are split across more than one performer. And the first thing to verify before signing is not the price but the permission: does the prime contract allow subcontracting at all, or do you need the client's written consent? Subcontracting without permission can put the main contractor in breach of its own contract, and it places the subcontractor in a fragile position from the outset.
- Assigning specialist works within a larger construction or operations project.
- Splitting a prime contract's scope across several performers with schedules and acceptance standards.
- Subcontracting under a prime contract with a government entity or a state-owned company.
- A subcontractor needing payment and retention terms documented before starting work.
What the smart-fill asks and what you receive
The smart-fill starts from the prime contract rather than from yours: the prime contract's date in both the Hijri and Gregorian calendars, its client's name in Arabic and English, then a direct question about permission, namely whether the client's written consent to subcontract is attached or whether you are relying on a permission granted in the prime contract itself. That order is deliberate, because the chain of contracts is what actually governs your liability.
It then handles the financial side: the subcontract price before value added tax, the pricing basis between a lump sum and remeasurement, the payment period in days after the contractor certifies the work, the retention percentage held from each invoice, and whether retention is released in full on final acceptance or half on completion with the other half after the defects period. It then asks for delay compensation per week as a percentage of the price together with a cap it may not exceed, the defects liability period in days from acceptance, the cure period for a material breach before the right to terminate arises, and the dispute forum between the court and arbitration under the Saudi Center for Commercial Arbitration.
And one question opens an entire section: is the prime contract with a government entity or a state-owned company? If you answer yes, a local content and Mandatory List compliance clause is inserted into the contract and the clause numbering adjusts automatically, after which you are asked for the notice period to the buyer if an item is added to the Mandatory List after signature, the good-faith renegotiation window following that notice, the retention period for local content records in years, and the notice period in business days before those records are audited. The fill closes with the names and capacities of the main contractor's and the subcontractor's signatories.
Within minutes you receive a formatted bilingual Word document, ready to sign, with unused options stripped out, so what reaches you is a contract fitted to your project rather than a generic form that suits everything and protects against nothing.
Why a lawyer-certified template beats a free download
A subcontract lives inside a chain, and that is what free forms fail to grasp. In them you find a generic payment clause with no link to certification of the work, retention with no statement of when and why it is released, and delay exposure with no cap to protect the subcontractor from compensation that swallows the entire price. When the prime contract is with a government entity the gap becomes more serious still, because local content obligations pass down the chain in practice and the free form does not mention them at all. The Sighaty template is certified by a licensed Saudi lawyer, written for the local regulatory context, and updated as the regulations change, putting in your hands a contract that knows its place in the prime contract instead of a page suspended in mid-air.
Frequently asked questions
Do I need the client's consent before subcontracting?
It depends on what the prime contract provides. Some prime contracts permit subcontracting within limits, and others require prior written approval for each subcontractor. That is why the template asks expressly whether the written consent is attached or whether you are relying on a permission in the prime contract, so the answer is documented inside the contract itself rather than left as a verbal assumption that is hard to prove later.
When is retention released from the subcontractor's invoices?
You set that during fill-in. The template lets you choose whether retention is released in full on final acceptance or split in half, one half on completion and the other after the defects liability period. The first option is simpler and the second is fairer to the subcontractor because it does not hold the whole retention hostage until the warranty period ends. What matters in either case is that the date is stated, since retention with no stated release date is the clause most likely to turn into a claim.
What does the local content clause mean in a subcontract?
When the prime contract is with a government entity or a state-owned company, local content and Mandatory List requirements apply along the supply chain and not to the main contractor alone. When you select that situation, the template inserts a clause addressing your compliance, the notice period to the buyer if an item is added to the Mandatory List after signature, a good-faith renegotiation window after that notice, and the retention of records together with the notice period before they are audited. Having that clause in writing spares you a later argument over who absorbs the impact of the change.
The content is general guidance, not legal advice; consult a licensed lawyer for your specific case.