Direct Selling Agent Agreement Template for Indonesia

A Direct Selling Agent Agreement under Indonesian law establishes the legal framework for a business relationship between a company and an independent agent who will sell products or services directly to consumers. This agreement, governed by Indonesian regulations including Government Regulation No. 32 of 2008 and the Trade Law, defines the appointment terms, territory rights, commission structure, compliance requirements, and operational guidelines. It includes specific provisions to ensure compliance with Indonesian direct selling regulations, consumer protection laws, and relevant business licensing requirements.

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What is a Direct Selling Agent Agreement?

The Direct Selling Agent Agreement is essential for companies operating a direct selling business model in Indonesia. It is used when a company wishes to appoint independent agents to sell products or services directly to consumers, whether through in-person sales, social selling, or other direct marketing channels. The agreement must comply with Indonesian regulations, particularly Government Regulation No. 32 of 2008 on Direct Selling and related trade laws. It covers crucial aspects such as territory rights, commission structures, performance targets, compliance requirements, and operational procedures. This document is particularly important in Indonesia's growing direct selling market, where regulatory compliance and clear business relationships are essential for successful operations.

What sections should be included in a Direct Selling Agent Agreement?

1. Parties: Identification of the principal company and the direct selling agent

2. Background: Context of the agreement and brief description of the business relationship

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

4. Appointment and Territory: Formal appointment of the agent and definition of the authorized sales territory

5. Rights and Obligations of the Agent: Detailed responsibilities including sales targets, reporting, compliance with laws, and customer service standards

6. Rights and Obligations of the Company: Company's commitments regarding product supply, training, marketing support, and commission payments

7. Commission Structure: Detailed breakdown of commission rates, calculation methods, and payment terms

8. Compliance Requirements: Specific compliance obligations under Indonesian direct selling regulations and consumer protection laws

9. Intellectual Property: Usage rights and restrictions regarding company trademarks, logos, and marketing materials

10. Confidentiality: Protection of business secrets and confidential information

11. Term and Termination: Duration of agreement, renewal terms, and grounds for termination

12. Post-Termination Obligations: Obligations of both parties after agreement ends, including return of materials and confidentiality

13. General Provisions: Standard clauses including notices, amendments, governing law, and dispute resolution

What sections are optional to include in a Direct Selling Agent Agreement?

1. Online Sales Provisions: Required if the agent will conduct sales through online platforms or e-commerce

2. International Sales: Required if the agent is authorized to sell in multiple countries

3. Training Requirements: Detailed section on mandatory training if the products require specific technical knowledge

4. Product Storage and Handling: Required if the agent will maintain inventory or handle product storage

5. Insurance Requirements: Detailed insurance obligations if the agent handles high-value products or maintains significant inventory

6. Sub-Agent Provisions: Required if the agent is permitted to appoint sub-agents

7. Minimum Performance Requirements: Detailed sales targets and consequences if using performance-based continuation

What schedules should be included in a Direct Selling Agent Agreement?

1. Schedule 1 - Product List: Comprehensive list of authorized products and their specifications

2. Schedule 2 - Commission Structure: Detailed breakdown of commission rates, bonuses, and calculation methods

3. Schedule 3 - Territory Definition: Detailed description or map of the authorized sales territory

4. Schedule 4 - Sales Targets: Specific sales targets and performance metrics

5. Schedule 5 - Reporting Templates: Standard forms for sales reports and customer information

6. Schedule 6 - Marketing Guidelines: Guidelines for use of company branding and approved marketing practices

7. Appendix A - Code of Conduct: Detailed ethical and behavioral guidelines for agents

8. Appendix B - Training Manual: Product knowledge and sales training materials

9. Appendix C - Compliance Checklist: Checklist of regulatory requirements and compliance obligations

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Indonesia

Publisher

Genie AI

Document Type

Agency Agreement

Cost

Free to use

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