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The Forward Purchase Agreement is a crucial commercial document used in Saudi Arabia when parties wish to establish legally binding terms for the future purchase and delivery of specific goods or commodities. It is particularly valuable in industries where advance planning and price certainty are essential, such as manufacturing, commodities trading, and construction. The agreement must carefully balance commercial requirements with Saudi legal frameworks, including both civil law principles and Sharia requirements. Key elements typically include detailed specifications of the goods, pricing mechanisms, delivery schedules, and quality standards. The document is structured to provide certainty while avoiding prohibited elements under Islamic law, such as excessive uncertainty or interest-based transactions. This type of agreement is commonly used in large-scale commercial transactions and requires careful consideration of Saudi Arabian commercial laws, regulatory requirements, and enforcement mechanisms.

1. Parties: Identification of the parties entering into the agreement, including full legal names, registration details, and addresses

2. Background: Context of the agreement and brief description of the parties' intentions

3. Definitions: Detailed definitions of terms used throughout the agreement

4. Subject Matter of Purchase: Detailed description of the goods or assets to be purchased

5. Purchase Price and Payment Terms: Specification of the purchase price, payment schedule, and payment methods in compliance with Sharia principles

6. Delivery Terms: Details of delivery schedule, location, and conditions

7. Quality Specifications: Required quality standards, specifications, and inspection procedures

8. Representations and Warranties: Statements of fact and guarantees made by both parties

9. Conditions Precedent: Conditions that must be satisfied before the agreement becomes effective

10. Risk and Title: Transfer of risk and ownership provisions

11. Events of Default: Circumstances constituting default and consequences

12. Termination: Conditions and procedures for terminating the agreement

13. Force Majeure: Provisions for unforeseen circumstances preventing performance

14. Governing Law and Jurisdiction: Specification of Saudi law as governing law and jurisdiction for disputes

15. Notices: Procedures for formal communications between parties

16. Counterparts and Execution: Provisions for agreement execution and number of counterparts