Commercial Agreement Template for Indonesia
Generate a bespoke document
What is a Commercial Agreement?
The Commercial Agreement template is designed for business transactions in Indonesia, providing a standardized framework for commercial relationships while ensuring compliance with Indonesian law and regulations. This document is essential when establishing formal business relationships, whether for supply of goods, provision of services, distribution arrangements, or other commercial transactions. It incorporates mandatory requirements of Indonesian law, including dual-language provisions under Law No. 24 of 2009, and addresses key commercial terms, risk allocation, and dispute resolution. The Commercial Agreement is particularly valuable for businesses seeking to establish clear, enforceable commercial relationships in Indonesia while managing legal and operational risks effectively. It can be customized for various business contexts while maintaining compliance with local legal requirements and business practices.
About the Commercial Agreement
A Commercial Agreement is a comprehensive legal contract that establishes the terms and conditions governing business relationships between parties in Indonesia. Whether you're dealing with Indonesian private limited companies (PT), foreign entities, state-owned enterprises (BUMN), or other commercial partners, this document ensures your business arrangements comply with Indonesian Civil Code and relevant commercial legislation while protecting your interests.
When do you need this document?
You need a Commercial Agreement when entering into any formal business relationship in Indonesia. This includes establishing supply chains with Indonesian manufacturers, appointing local distributors for your products, engaging service providers for business operations, or forming joint ventures with Indonesian partners. The document is particularly crucial when foreign companies conduct business with Indonesian entities, as it ensures compliance with investment laws and trade regulations. You'll also need this agreement when state-owned enterprises are involved, as they have specific procurement and contracting requirements under Indonesian law.
Key legal considerations
Several critical legal elements must be addressed in your Commercial Agreement. Performance obligations should be clearly defined with specific milestones and quality standards to avoid disputes. Payment terms must comply with Indonesian banking regulations and foreign exchange rules, particularly for international transactions. Risk allocation clauses are essential, covering force majeure events, liability limitations, and insurance requirements. Intellectual property protection should be explicitly addressed, especially given Indonesia's evolving IP landscape. Confidentiality provisions must balance business needs with transparency requirements under Indonesian corporate law. Termination clauses should specify grounds for termination, notice periods, and post-termination obligations to ensure enforceability.
Legal requirements in Indonesia
Indonesian law imposes specific mandatory requirements on Commercial Agreements. Under Law No. 24 of 2009, any agreement involving Indonesian parties must be drafted in Indonesian language, though an English version may accompany it for convenience. The Indonesian version takes precedence in case of conflicts. If your agreement involves foreign investment, compliance with Law No. 25 of 2007 on Investment is mandatory, including reporting requirements and sector-specific restrictions. Electronic transactions and digital signatures must comply with Law No. 11 of 2008 on Electronic Information and Transactions. Trade-related agreements must adhere to Law No. 7 of 2014 on Trade, particularly regarding import-export activities and domestic trade provisions. Additionally, all parties must be properly registered with relevant Indonesian authorities, and the agreement should specify the governing law and jurisdiction for dispute resolution, typically Indonesian courts or arbitration under Indonesian Arbitration Board rules.
GOVERNING LAW
Applicable law
This Commercial Agreement is drafted to comply with Indonesia law. Key legislation includes:
Law No. 24 of 2009 on National Flag, Language, Emblem and Anthem: Requires agreements involving Indonesian parties to be made in Indonesian language. English version can be used but Indonesian version must also exist and prevail
Law No. 7 of 2014 on Trade: Governs commercial activities and trade relationships in Indonesia, including domestic and international trade provisions
Law No. 25 of 2007 on Investment: Relevant if the commercial agreement involves foreign investment or foreign parties
Law No. 11 of 2008 on Electronic Information and Transactions: Governs electronic transactions and digital signatures if the agreement involves online elements or electronic execution
Law No. 7 of 2011 on Currency: Regulates the use of currency in transactions, particularly relevant for payment terms and currency denomination in agreements
Law No. 5 of 1999 on Anti-Monopoly and Unfair Business Competition: Ensures the agreement doesn't contain provisions that could lead to monopolistic practices or unfair business competition
Explore 208,390+ legal templates
Explore 208,390+ legal templates
Genie's Security Promise
Genie is the safest place to draft. Here's how we prioritise your privacy and security.
Your data is private:
We do not train on your data; Genie's AI improves independently
All data stored on Genie is private to your organisation
Your documents are protected:
Your documents are protected by ultra-secure 256-bit encryption
We are ISO27001 certified, so your data is secure
Organizational security:
You retain IP ownership of your documents and their information
You have full control over your data and who gets to see it