Exclusive Subcontractor Agreement Template for Indonesia

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Key Requirements PROMPT example:

Exclusive Subcontractor Agreement

"I need an Exclusive Subcontractor Agreement for a Jakarta-based construction company that will be our sole provider of specialized concrete formwork services in West Java starting March 2025, with strict safety protocols and local regulatory compliance requirements."

Document background
The Exclusive Subcontractor Agreement is essential for businesses operating in Indonesia that require specialized services provided on an exclusive basis. This document is particularly crucial when a company needs to secure dedicated service provision while ensuring compliance with Indonesian regulations, including Law No. 13 of 2003 on Manpower and Minister of Manpower and Transmigration Regulation No. 19 of 2012. The agreement outlines comprehensive terms covering service scope, exclusivity provisions, performance standards, compliance requirements, and risk allocation. It is designed to protect both parties' interests while maintaining alignment with Indonesian legal requirements regarding subcontracting relationships, worker protection, and business practices. The document is commonly used in industries requiring specialized expertise or dedicated service provision, such as construction, manufacturing, or technical services.
Suggested Sections

1. Parties: Identification of the main contractor and subcontractor, including their complete legal names, registration numbers, and addresses

2. Background: Context of the agreement, relationship between parties, and general purpose of the exclusive subcontracting arrangement

3. Definitions: Detailed definitions of key terms used throughout the agreement, including specific industry terminology and legal concepts

4. Scope of Services: Detailed description of services to be provided, including exclusivity provisions and territorial limitations

5. Term and Renewal: Duration of the agreement, conditions for renewal, and termination provisions

6. Exclusivity Obligations: Specific terms of exclusivity, including geographical scope and any exceptions

7. Performance Standards: Required quality standards, KPIs, and performance metrics

8. Payment Terms: Compensation structure, payment schedule, invoicing requirements, and currency specifications

9. Representations and Warranties: Standard representations about capacity to contract and specific warranties about service quality

10. Compliance Requirements: Obligations to comply with Indonesian laws, particularly labor and safety regulations

11. Confidentiality: Protection of confidential information and trade secrets

12. Intellectual Property Rights: Ownership and usage rights of IP created during the service provision

13. Insurance and Indemnity: Required insurance coverage and indemnification obligations

14. Termination: Grounds for termination, notice requirements, and consequences of termination

15. Dispute Resolution: Process for resolving disputes, including jurisdiction and governing law provisions

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

Optional Sections

1. Personnel Requirements: Used when specific qualifications or certifications are required for subcontractor's personnel

2. Equipment and Materials: Include when the subcontractor needs to provide specific equipment or materials

3. Health and Safety Requirements: Required for high-risk industries or when specific safety protocols must be followed

4. Environmental Compliance: Include when services have environmental impacts or require specific environmental permits

5. Security Requirements: Used when dealing with sensitive information or restricted access areas

6. Quality Control Procedures: Include when specific quality management systems or certifications are required

7. Training Requirements: Used when ongoing training or certification maintenance is necessary

8. Force Majeure: Include detailed force majeure provisions when services are susceptible to external disruptions

9. Parent Company Guarantee: Include when additional financial security is required from subcontractor's parent company

Suggested Schedules

1. Schedule 1 - Scope of Services: Detailed technical specifications and requirements for the services

2. Schedule 2 - Fee Schedule: Detailed breakdown of fees, rates, and payment terms

3. Schedule 3 - Performance Metrics: Specific KPIs and measurement criteria for performance evaluation

4. Schedule 4 - Required Personnel: List of key personnel and their qualifications

5. Schedule 5 - Equipment Specifications: Detailed list of required equipment and technical specifications

6. Schedule 6 - Compliance Requirements: Specific regulatory requirements and compliance standards

7. Schedule 7 - Form of Performance Bond: Template for performance bond if required

8. Schedule 8 - Insurance Requirements: Detailed insurance coverage requirements and minimum limits

9. Appendix A - Required Forms and Templates: Standard forms for reports, invoices, and other routine documentation

10. Appendix B - Health and Safety Procedures: Detailed safety protocols and procedures

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

Construction

Manufacturing

Information Technology

Oil and Gas

Mining

Infrastructure Development

Telecommunications

Engineering Services

Industrial Services

Facilities Management

Maritime and Shipping

Energy

Healthcare Services

Relevant Teams

Legal

Procurement

Operations

Compliance

Risk Management

Commercial

Supply Chain

Project Management

Business Development

Technical Operations

Facilities Management

Relevant Roles

Chief Executive Officer

Chief Operating Officer

Procurement Manager

Contract Manager

Legal Counsel

Operations Director

Project Manager

Supply Chain Manager

Compliance Officer

Risk Manager

Commercial Director

Business Development Manager

Technical Director

Facilities Manager

Construction Manager

Industries
Indonesian Civil Code (KUHPerdata): The fundamental law governing contracts and civil relationships in Indonesia, particularly Book III on Obligations and Contracts, which sets out basic principles of contract formation, validity, and enforcement
Law No. 13 of 2003 on Manpower: Regulates employment relationships, including provisions on outsourcing and subcontracting arrangements, workers' rights, and obligations of both main contractor and subcontractor
Minister of Manpower and Transmigration Regulation No. 19 of 2012: Specific regulation on conditions and requirements for outsourcing arrangements and subcontracting relationships in Indonesia
Law No. 5 of 1999 (Anti-Monopoly Law): Regulates business competition and contains provisions relevant to exclusive arrangements and potential anti-competitive practices
Law No. 2 of 2017 on Construction Services: If the subcontracting relates to construction services, this law governs the rights, obligations, and requirements for construction service providers
Government Regulation No. 50 of 2012: Regulates the implementation of Health and Safety Management Systems, which may be relevant for subcontractor obligations
Law No. 24 of 2009 on National Flag, Language, Emblem and Anthem: Requires contracts involving Indonesian parties to be drafted in the Indonesian language (Bahasa Indonesia) or be bilingual
Law No. 25 of 2007 on Investment: If the subcontractor arrangement involves foreign investment or foreign parties, this law provides relevant regulatory framework
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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