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Drafting Legally Commercial Contracts is Prerequisite to Protect your Business

  • 20 Aug, 2023

Legal experts point out the importance of drafting commercial contracts, and that it is one of the fundamentals of the success and growth of your company’s business. Since you are seeking success and development, the first thing you should do is look for an experienced contract lawyer who will advise you on any potential legal risks or problems to protect your rights through drafting. Legal, regulatory and legal, which includes all the basic aspects that preserve and preserve all the rights and obligations of contractors.

In this article, we will shed light on everything you need to know about commercial contracts in the Saudi system in terms of their concept, what they must include, the correct mechanisms for managing them, and how to obtain the service of drafting your commercial contracts with professionalism and high efficiency.

What are commercial contracts?

A commercial contract is a legally binding agreement between two or more companies that agree to complete a deal, or agree on the mechanism used that governs and controls the mechanism of dealing in the commercial activity for which the contract was made. The primary goal of this type of contract is to regulate the transactions that take place between companies. And commercial institutions, and ensure that all parties fulfill what they have committed to each other in terms of promises, terms and conditions.

The types of commercial contracts that are dealt with between institutions and companies vary, including, for example: contracts for supply and sale, operation, maintenance, contracting, transportation, commercial franchising, distribution, brokerage, mortgage, agencies, and trademarks.

Each of these contracts is properly drafted and includes specifications and obligations that make it enforceable, achieve its objectives, and avoid its parties from being exposed to any problems or legal issues in the future.

The importance of commercial contracts in growing and protecting your business:

How important are commercial contracts? A question that may be asked among some merchants and owners of startup companies, especially those who do not have sufficient experience in establishing companies and the details of their management to protect their rights and ensure the implementation of their obligations, and they overlook that these contracts are the basis for the company’s growth and success. Let us answer this question in brief points below:

  1. Commercial contracts formalize relationships within your company, as well as relationships between them and external parties that have common interests with your company or business.
  2. Providing legal protection for your company, and reducing the risks resulting from violating the law or commercial system adopted and in force in the place of implementation of the contracted obligations and the country to which it is subject to in applying the provisions of the commercial contract system.
  3. Establish clear expectations and possibilities for all contracting parties, while ensuring that these expectations can be implemented.
  4. Commercial contracts also play a big role in making your company look more professional and proving that you are serious about concluding deals with other companies, and that you are willing to fulfill your obligations towards what the contract stipulates.
  5. Achieving commercial goals such as completing projects according to what was planned, maintaining customer satisfaction, enhancing trust between merchants and companies, and other goals that commercial establishments seek to achieve.

In what cases are commercial contracts legally binding?

All types of commercial contracts are legally enforceable if they include the following elements:

  1. The offer, which is made by one of the parties.
  2. Acceptance, which means the second party’s approval of the offer submitted by the first party.
  3. The consideration, which is what each contracting party provides as part of the deal that is the subject of the contract, whether the consideration is material if the subject of the contract is a product or an intangible consideration if the subject of the contract is a service.
  4. Capacity, which is the ability of the contracting parties to conclude the contract as the legal representative of the company, its manager, or its representative according to the legally and legally applicable methods of representation, such as the legal agent.
  5. Intention, which means the intention of the contracting parties to abide by the terms and conditions contained in the contract, and this is done by signing and ratifying the obligations of the contracting parties on the terms and conditions stated in the agreed upon contract.

There are also a number of items that should be taken into account when drafting commercial contracts, including clarifying the subject and subject of the contract, the agreed upon value or amount of money, or the agreed upon service in an accurate and clear description that eliminates ignorance between the two parties to the contract, the personal data of each contracting party, their legal status, and methods of Communicating with them and the notification mechanism in place between them, determining the duration of the contract for its implementation and the mechanism for renewing or terminating it, as well as the judicial authority, the guarantees that guarantee the clear implementation of the obligations of each party, the penal conditions and fines, the mechanism for implementing and applying them…etc.

You can draft your own commercial contracts yourself, but you certainly want to obtain specialized drafting that is legally and legally binding, protects your business and commercial activity, and contributes to its growth and success. This is only achieved by communicating with our office, as this service is provided to you by an elite group of lawyers and legal advisors who have sufficient experience. In this field for various types of contracts, and they have a proven track record of success, they make it a priority to meet your requirements and needs in the best possible way.

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