Equipment Lease To Own Agreement Template for Indonesia

The Equipment Lease to Own Agreement is essential for businesses in Indonesia seeking to acquire equipment through structured financing arrangements that combine leasing with eventual ownership. This document type is particularly relevant when companies want to manage cash flow while ensuring eventual ownership of vital equipment. The agreement must comply with Indonesian legal requirements, including the Civil Code, Presidential Regulation No. 9 of 2009 on Financing Institutions, and OJK regulations. It's commonly used for substantial equipment purchases where immediate full payment isn't preferred or possible. The document covers critical aspects such as payment schedules, maintenance responsibilities, insurance requirements, and ownership transfer conditions, while ensuring compliance with local financial services regulations and consumer protection laws. This agreement type is especially valuable in industries requiring significant capital equipment investment but preferring phased payment approaches.

1. Parties: Identification of the lessor and lessee, including their legal details and addresses

2. Background: Context of the agreement, brief description of the arrangement, and basic intent of parties

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

4. Equipment Description: Detailed description of the equipment being leased, including specifications and condition

5. Lease Term and Purchase Option: Duration of the lease and conditions for exercising the purchase option

6. Rental Payments: Payment terms, amounts, schedule, and method of payment

7. Purchase Price and Ownership Transfer: Total purchase price, how rental payments contribute to purchase, and transfer process

8. Delivery and Acceptance: Terms for equipment delivery, inspection, and acceptance procedures

9. Use and Maintenance: Requirements for equipment use, maintenance obligations, and operating conditions

10. Insurance and Risk: Insurance requirements and allocation of risk during the lease period

11. Warranties and Representations: Warranties regarding equipment condition and representations by both parties

12. Default and Remedies: Events of default and available remedies for both parties

13. Termination: Conditions and process for early termination of the agreement

14. Governing Law and Dispute Resolution: Applicable law and process for resolving disputes

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