Distribution License Agreement Template for Indonesia

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Key Requirements PROMPT example:

Distribution License Agreement

"I need a Distribution License Agreement for my Indonesian cosmetics company to appoint an exclusive distributor for my skincare products in Java and Sumatra, with minimum annual purchase requirements and strict quality control provisions, starting from March 2025."

Document background
The Distribution License Agreement is a crucial document for businesses seeking to establish formal distribution channels in Indonesia. This agreement type is particularly relevant when a product owner (licensor) wishes to authorize another party (distributor) to sell and distribute their products in the Indonesian market while maintaining control over how their products are sold and their brand is represented. The agreement must comply with Indonesian laws, including Law No. 24 of 2019 on Creative Economy, trade regulations, and relevant sector-specific requirements. It typically includes detailed provisions on territorial rights, performance targets, quality control, intellectual property protection, and regulatory compliance. This document is essential for both domestic and international companies establishing distribution networks in Indonesia, particularly given the country's complex regulatory environment and specific local business requirements.
Suggested Sections

1. Parties: Identification of the licensor and distributor, including their legal status and registered addresses

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

3. Definitions: Definitions of key terms used throughout the agreement

4. Grant of License: Scope of license granted, including territory, exclusivity/non-exclusivity, and restrictions

5. Distribution Rights and Obligations: Specific rights granted to distributor and corresponding obligations

6. Term and Renewal: Duration of the agreement and conditions for renewal

7. Financial Terms: Pricing, payment terms, royalties, and other financial obligations

8. Minimum Performance Requirements: Sales targets, minimum purchase requirements, and performance metrics

9. Quality Control: Quality standards, inspection rights, and compliance requirements

10. Intellectual Property Rights: Protection and usage of trademarks, patents, and other IP

11. Marketing and Promotion: Marketing requirements, advertising approvals, and brand guidelines

12. Reporting and Audit Rights: Regular reporting requirements and audit provisions

13. Confidentiality: Protection of confidential information and trade secrets

14. Termination: Grounds for termination and consequences

15. Post-Termination Obligations: Obligations of parties after agreement ends

16. Governing Law and Dispute Resolution: Choice of Indonesian law and dispute resolution mechanisms

17. General Provisions: Standard boilerplate clauses including force majeure, notices, and amendments

Optional Sections

1. Products Registration: Required when products need regulatory approval or registration in Indonesia

2. Insurance Requirements: Detailed insurance obligations when dealing with high-value or regulated products

3. Training and Support: Include when technical products require ongoing support and training

4. Sub-distribution Rights: When sub-distribution is permitted within the territory

5. Import/Export Compliance: Required for international distribution arrangements

6. Data Protection: Include when personal data processing is involved in the distribution process

7. Environmental Compliance: Required for products with environmental impacts or regulations

8. Anti-corruption Compliance: Detailed compliance requirements for regulated industries or public sector distribution

Suggested Schedules

1. Schedule 1 - Licensed Products: Detailed list and specifications of products covered by the agreement

2. Schedule 2 - Territory: Detailed description of geographic territories and any exclusions

3. Schedule 3 - Pricing and Payment Terms: Detailed pricing structure, discounts, and payment conditions

4. Schedule 4 - Performance Targets: Specific sales targets and minimum performance requirements

5. Schedule 5 - Technical Specifications: Product technical details and quality standards

6. Schedule 6 - Trademark Usage Guidelines: Specific rules for using licensor's trademarks and branding

7. Schedule 7 - Reporting Templates: Standard forms for required periodic reports

8. Appendix A - Approved Sub-distributors: List of approved sub-distributors if applicable

9. Appendix B - Marketing Guidelines: Detailed marketing and promotion requirements

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 | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Consumer Goods

Pharmaceuticals

Technology

Automotive

Electronics

Food and Beverage

Fashion and Apparel

Industrial Equipment

Software and Digital Products

Healthcare Products

Cosmetics and Personal Care

Agricultural Products

Construction Materials

Telecommunications

Relevant Teams

Legal

Commercial

Sales

Operations

Compliance

Business Development

Supply Chain

Distribution

Marketing

Finance

Quality Assurance

Regulatory Affairs

Relevant Roles

Chief Executive Officer

Commercial Director

Head of Sales

Distribution Manager

Legal Counsel

Compliance Officer

Business Development Manager

Operations Director

Supply Chain Manager

Country Manager

Licensing Manager

Contract Administrator

Regional Sales Director

Marketing Director

Channel Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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