Supply of goods agreement Template for Indonesia

A Supply of goods agreement sets the rules and expectations when one business regularly provides products to another in Indonesia. It covers essential details like product specifications, delivery schedules, pricing, and payment terms - protecting both the supplier and buyer under Indonesian Commercial Code provisions.

These agreements play a vital role in Indonesia's business landscape, especially for manufacturing, retail, and distribution sectors. They help prevent disputes by clearly stating quality standards, handling procedures for defective goods, and remedies if either party fails to meet their obligations. Most Indonesian businesses use these contracts for ongoing supply relationships lasting six months or longer.

Use a Supply of goods agreement when establishing regular product deliveries with suppliers in Indonesia, especially for orders worth over Rp 100 million or lasting beyond three months. This contract becomes essential when dealing with critical inventory items, custom-manufactured goods, or products that require specific quality standards or handling.

The agreement proves particularly valuable in Indonesia's manufacturing, retail, and distribution sectors where consistent supply chains matter most. It helps prevent costly disruptions, quality issues, and payment disputes by documenting exact specifications, delivery schedules, and pricing mechanisms upfront. Indonesian law offers stronger protection for businesses with written supply agreements compared to informal arrangements.

• Contract Agreement Between Supplier And Purchaser: Focuses on ongoing business relationships with detailed terms for multiple deliveries, quality standards, and payment schedules. Commonly used in manufacturing and wholesale trade.
• Contract For Supply And Delivery Of Goods: Emphasizes logistics and delivery specifications, including transportation requirements, delivery timelines, and risk transfer points. Ideal for import-export operations and retail distribution in Indonesia.

• Manufacturers and Suppliers: Companies providing goods under the agreement, responsible for quality control, timely delivery, and meeting product specifications per Indonesian manufacturing standards.
• Purchasing Companies: Businesses buying the goods, often retailers or distributors, who specify their requirements and payment terms.
• Legal Departments: In-house lawyers or external firms who draft and review Supply of goods agreements to ensure compliance with Indonesian commercial law.
• Procurement Officers: Managers who negotiate terms, monitor deliveries, and maintain supplier relationships.
• Quality Control Teams: Staff responsible for inspecting goods and ensuring they meet agreed specifications.

• Basic Details: Gather complete legal names, addresses, and registration numbers of both supplier and buyer companies.
• Product Specifications: Document detailed descriptions, quantities, quality standards, and packaging requirements.
• Delivery Terms: Define delivery schedules, locations, and transportation responsibilities under Indonesian shipping regulations.
• Payment Structure: Outline pricing, payment schedules, and acceptable payment methods in Indonesian Rupiah.
• Quality Control: Specify inspection procedures, acceptance criteria, and rejection protocols.
• Risk Management: Include warranty terms, liability limits, and dispute resolution mechanisms under Indonesian law.

• Party Identification: Complete legal names, addresses, and authorized signatories of both supplier and buyer.
• Goods Description: Detailed specifications, quantities, and quality standards as per Indonesian Commercial Code.
• Payment Terms: Price, payment schedule, and currency specifications in Indonesian Rupiah.
• Delivery Details: Timelines, locations, and Incoterms for risk transfer under Indonesian law.
• Default Provisions: Consequences of breach, termination rights, and dispute resolution procedures.
• Force Majeure: Events excusing non-performance under Indonesian civil law principles.
• Governing Law: Clear statement of Indonesian law application and jurisdiction.

A Supply of goods agreement differs significantly from a Supply Chain Agreement in several key aspects under Indonesian law. While both deal with business relationships, they serve distinct purposes and have different scopes.

• Scope and Coverage: Supply of goods agreements focus specifically on product delivery between two parties, while Supply Chain Agreements manage multiple relationships across an entire distribution network.
• Complexity Level: Supply of goods agreements typically involve straightforward product exchanges, whereas Supply Chain Agreements coordinate logistics, warehousing, and multiple vendor relationships.
• Legal Requirements: Under Indonesian Commercial Code, Supply of goods agreements need only basic elements like product specifications and delivery terms. Supply Chain Agreements require additional provisions for third-party rights, logistics coordination, and broader liability frameworks.
• Duration and Flexibility: Supply of goods agreements often cover fixed-term arrangements, while Supply Chain Agreements usually establish long-term frameworks with more complex modification procedures.