المملكة: No dues without completion…and fines for delay in engineering design contracts

The Saudi Council of Engineers approved a unified contractual document to regulate engineering design work between consulting offices and owners.
The document aims to control the mechanisms for making financial payments, ensure the quality of outputs, and protect the rights of contracting parties legally and technically.

Completion of the actual stages of the project

The document revealed that the payment of financial dues is linked to the completion of the actual stages of the project and their documentation via an approved electronic platform.
The procedures indicated that the contract includes four basic stages that begin with the primary project and end with the completion of all procedures and the delivery of the building permit to the client.
The new regulations imposed strict compensation agreements on engineering offices in the event of delay in delivering the specified stages.

Five additional days

The terms confirmed that the office was given a maximum of five additional days, after which a daily fine not exceeding ten percent of the total contract value would begin.
The Authority explained the role of the electronic platform as a basic and neutral reference for settling initial disputes regarding the completion of the work stages between the two parties.
She pointed out that if the owner rejects the payment request, the dispute will be referred to the platform to issue a binding technical report within seven days that determines the eligibility for payment.
The contract obligated the engineering designer to apply the highest technical standards and ensure that the design outputs conform to the requirements of the Saudi building code according to the building classification.
The instructions indicated that the owner has the right to make non-essential amendments to the initial designs twice without incurring any additional financial costs.

Preview the project site

The terms stressed the commitment of the engineering office to conduct a field visit to inspect the project site and study the regulatory repercussions to avoid obstacles before implementation.
The document added that it is necessary to hand over to the client all the original design files that can be modified and the final copies according to which the official licenses were issued.
The rules preserved the intellectual property rights of engineering offices, preventing owners from reusing the plans in other projects without prior written permission.

Judicial rulings

The document specified cases of automatic termination of the contract, indicating that it includes the issuance of judicial rulings to transfer ownership of the property or sell it without the documented approval of the designer.
The provisions warned against suspending or stopping work by the owner, obligating him to pay all dues until the end of the stage at which it was stopped.
The document concluded by confirming that any future dispute would be subject to Saudi regulations, giving the parties the option of litigating before the competent courts or resorting to the Saudi Engineering Arbitration Center.