Contractor Commission Agreement Template for Indonesia

The Contractor Commission Agreement is essential for businesses operating in Indonesia who engage independent contractors on a commission basis. This document is particularly relevant when companies need to formalize relationships with sales agents, business developers, or other contractors who are compensated based on performance or results. The agreement must comply with Indonesian legal requirements, including the Civil Code (KUHPer) and Law No. 13 of 2003 on Manpower, while clearly distinguishing the arrangement from an employment relationship. It typically includes detailed commission structures, performance metrics, territory assignments, and essential legal protections for both parties. This type of agreement is commonly used in various sectors where companies expand their market reach through independent contractors rather than direct employees.

1. Parties: Identification of the Principal/Company and the Contractor, including full legal names, registration numbers, and addresses

2. Background: Context of the agreement, nature of the Principal's business, and the purpose of engaging the Contractor

3. Definitions: Key terms used throughout the agreement, including 'Services', 'Commission', 'Territory', 'Customers', etc.

4. Appointment and Scope: Terms of the Contractor's appointment, scope of services, and territory/market coverage

5. Term and Termination: Duration of the agreement, renewal terms, and conditions for termination

6. Commission Structure: Detailed explanation of commission rates, calculation methods, and payment terms

7. Payment Terms: Timeline for commission payments, invoice requirements, and payment methods

8. Contractor's Obligations: Key responsibilities, performance standards, and reporting requirements

9. Principal's Obligations: Support, information, and resources to be provided by the Principal

10. Intellectual Property: Ownership and usage rights of IP created during the engagement

11. Confidentiality: Protection of confidential information and trade secrets

12. Non-Competition: Restrictions on competing activities during and after the agreement

13. Independent Contractor Status: Clear statement of independent contractor relationship and not employment

14. Dispute Resolution: Process for handling disputes, including jurisdiction and governing law

15. General Provisions: Standard boilerplate clauses including notices, amendments, and severability