Document background
The Construction Settlement Agreement is a crucial document used in Indonesia when parties involved in construction projects need to formally resolve disputes or claims that have arisen during the project lifecycle. It serves as a legally binding document under Indonesian law, particularly aligned with Law No. 2 of 2017 on Construction Services and the Indonesian Civil Code. This agreement is typically employed when parties wish to avoid or terminate litigation or arbitration proceedings, documenting the negotiated resolution of issues such as payment disputes, construction defects, delays, or variations. The document includes essential elements such as settlement amounts, payment terms, mutual releases, and any ongoing obligations. It may also address specific Indonesian regulatory requirements, local construction practices, and necessary governmental approvals. The agreement is particularly important in the Indonesian construction sector where formal documentation of dispute resolution is crucial for legal certainty and business relationships.
