Framework Contract for Indonesia

Framework Contract Template for Indonesia

A Framework Contract under Indonesian law establishes a master agreement that sets out the general terms and conditions governing future transactions between parties. This document, compliant with the Indonesian Civil Code (KUHPerdata) and relevant commercial regulations, provides a structured approach to long-term business relationships while maintaining flexibility for specific transactions. It includes essential provisions for ordering processes, pricing mechanisms, performance standards, and dispute resolution, all tailored to meet Indonesian legal requirements and business practices.

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What is a Framework Contract?

The Framework Contract serves as a foundational document for establishing long-term commercial relationships under Indonesian law. It is particularly useful when parties anticipate multiple transactions over time and want to avoid negotiating terms for each individual deal. This contract type complies with Indonesian Civil Code requirements and relevant commercial regulations, providing a robust structure for business operations while maintaining flexibility. The Framework Contract typically includes provisions for ordering mechanisms, pricing structures, performance standards, and risk allocation, while addressing specific Indonesian regulatory requirements such as language requirements and local content regulations where applicable. It's commonly used in various commercial contexts, from supply chain management to service provision, and can be adapted to accommodate both domestic and international business relationships.

What sections should be included in a Framework Contract?

1. Parties: Identification of the contracting parties, including their legal status and registration details as required under Indonesian law

2. Background: Context of the agreement and the parties' intention to establish a framework for future transactions

3. Definitions: Definitions of key terms used throughout the agreement, including Indonesian legal terms where relevant

4. Scope of Agreement: Overview of the framework relationship and types of transactions covered

5. Duration and Renewal: Term of the framework agreement and renewal provisions

6. Ordering Process: Procedures for placing and accepting orders under the framework

7. Pricing and Payment Terms: General pricing principles and payment mechanisms

8. Performance Standards: Required quality levels and performance metrics

9. Representations and Warranties: Standard representations and warranties from both parties

10. Confidentiality: Protection of confidential information exchanged under the framework

11. Intellectual Property: Ownership and usage rights of IP in the context of the framework

12. Liability and Indemnification: Allocation of risks and responsibilities between parties

13. Force Majeure: Provisions for unforeseen circumstances preventing performance

14. Termination: Grounds and procedures for terminating the framework agreement

15. Governing Law and Dispute Resolution: Confirmation of Indonesian law governance and dispute resolution mechanisms

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

What sections are optional to include in a Framework Contract?

1. Compliance with Anti-Corruption Laws: Required when dealing with government entities or high-risk sectors

2. Export Control: Necessary when framework involves international trade or controlled goods

3. Data Protection: Required when personal data processing is involved in the framework

4. Environmental Compliance: Important for frameworks involving manufacturing or environmental impacts

5. Insurance Requirements: Needed for high-risk activities or where significant liability exposure exists

6. Local Content Requirements: Required when dealing with regulated industries in Indonesia

7. Change Control: Useful for complex frameworks where scope or specifications may need adjustment

8. Service Levels: Required for service-based framework agreements

9. Security Requirements: Important when dealing with sensitive information or facilities access

What schedules should be included in a Framework Contract?

1. Schedule 1 - Pricing Schedule: Detailed pricing structure, including any volume discounts or pricing mechanisms

2. Schedule 2 - Service/Product Specifications: Detailed technical or service specifications

3. Schedule 3 - Key Performance Indicators: Specific performance metrics and measurement methods

4. Schedule 4 - Order Form Template: Standard form for placing orders under the framework

5. Schedule 5 - Contact Details: Key contact persons and communication protocols

6. Schedule 6 - Approved Subcontractors: List of pre-approved subcontractors if relevant

7. Schedule 7 - Service Levels: Detailed service level requirements and measurement criteria

8. Appendix A - Compliance Requirements: Specific regulatory or compliance requirements applicable to the framework

9. Appendix B - Technical Standards: Applicable technical standards and certifications

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

Jurisdiction

Indonesia

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Manufacturing

Technology

Retail

Construction

Energy

Healthcare

Telecommunications

Financial Services

Transportation

Agriculture

Mining

Consumer Goods

Professional Services

Industrial Services

Infrastructure

Relevant Teams

Legal

Procurement

Commercial

Operations

Finance

Compliance

Sales

Business Development

Supply Chain

Risk Management

Vendor Management

Strategic Sourcing

Contract Administration

Relevant Roles

Commercial Director

Procurement Manager

Legal Counsel

Contract Manager

Supply Chain Manager

Business Development Manager

Operations Director

Chief Financial Officer

Compliance Officer

Sales Director

General Manager

Project Manager

Vendor Relations Manager

Risk Manager

Strategic Sourcing 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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