Credit Sale Agreement Template for Indonesia

A Credit Sale Agreement is a legally binding contract that governs the sale of goods or assets where the buyer pays for the purchase through installments rather than a lump sum payment. Under Indonesian law, this agreement creates a structured framework that protects both the seller's right to receive payment and the buyer's right to acquire ownership upon fulfillment of payment obligations.

When do you need this document?

You need a Credit Sale Agreement when conducting business transactions that involve deferred payment arrangements. This includes retail businesses selling consumer goods like electronics, vehicles, or furniture on installment plans, real estate developers offering property sales with staged payments, and B2B transactions where equipment or machinery is sold with extended payment terms. The document is particularly crucial for high-value transactions where immediate full payment may not be feasible for the buyer, allowing businesses to expand their customer base while maintaining legal protection.

Key legal considerations

Several critical elements must be carefully addressed in your Credit Sale Agreement. The purchase price structure should clearly specify the total amount, down payment, credit portion, and detailed payment schedule with due dates. Interest calculations must comply with Indonesian regulations, including the method of computation and any applicable fees or charges. Security arrangements are essential, potentially including fiduciary security under Law No. 42 of 1999, personal guarantees, or collateral requirements. Default provisions should outline consequences of non-payment, including acceleration clauses, penalty fees, and remedies available to the seller. The agreement must also address ownership transfer conditions, specifying when title passes from seller to buyer, and include appropriate dispute resolution mechanisms.

Legal requirements in Indonesia

Indonesian law imposes specific requirements on Credit Sale Agreements to ensure validity and enforceability. The document must comply with the Indonesian Civil Code's contract formation principles, including offer, acceptance, and consideration. For consumer transactions, Law No. 8 of 1999 on Consumer Protection mandates clear disclosure of all terms, conditions, and costs, with specific protections against unfair contract terms. Financial service providers must adhere to OJK Regulation No. 35/POJK.05/2018, which governs financing company operations and credit arrangements. Interest rates and fees must comply with applicable regulatory limits, and the agreement should include mandatory cooling-off periods for consumer purchases. Proper execution may require notarization or witnessing depending on the transaction value and nature of the goods involved, particularly for real estate or high-value assets.