Finance Lease Agreement Template for Indonesia

The Finance Lease Agreement is a crucial document used in Indonesian business transactions when a party requires the use of substantial assets without making an immediate full purchase. This agreement type is regulated under Indonesian law, particularly OJK Regulation No. 29/POJK.05/2014 and related financial services regulations. It enables businesses to acquire expensive equipment, vehicles, or other assets through structured financing, with the lessor maintaining ownership while the lessee gains use of the asset. The document includes essential provisions for payment terms, maintenance responsibilities, insurance requirements, and end-of-lease options, while ensuring compliance with Indonesian civil law and financial regulations. It's particularly valuable for businesses seeking to manage cash flow while accessing necessary operational assets.

1. Parties: Identification of the lessor (finance company) and lessee, including their complete legal names, registration numbers, addresses, and authorized representatives

2. Background: Context of the agreement, including the purpose of the lease and brief description of the asset to be leased

3. Definitions: Definitions of key terms used throughout the agreement, including financial terms, technical terms, and legal concepts

4. Object of Lease: Detailed description of the leased asset(s), including specifications, condition, and intended use

5. Lease Term: Duration of the lease, commencement date, and conditions for renewal if applicable

6. Lease Payments: Payment terms including amount, frequency, method of payment, and consequences of late payment

7. Delivery and Acceptance: Terms regarding the delivery, inspection, and acceptance of the leased asset

8. Title and Ownership: Clarification of ownership rights, restrictions on transfer, and conditions for eventual transfer of title

9. Insurance and Maintenance: Requirements for insurance coverage and maintenance responsibilities of the parties

10. Representations and Warranties: Statements and guarantees made by both parties regarding their capacity and authority

11. Covenants: Ongoing obligations of both parties throughout the lease term

12. Events of Default: Circumstances constituting default and consequences thereof

13. Termination: Conditions and procedures for early termination, including consequences and settlement

14. Indemnification: Mutual indemnification obligations and liability limitations

15. Governing Law and Dispute Resolution: Choice of law and procedures for resolving disputes

16. Notices: Methods and addresses for official communications between parties

17. Miscellaneous: Standard boilerplate provisions including severability, entire agreement, and amendments