Independent Contractor Subcontractor Agreement Template for Indonesia

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Key Requirements PROMPT example:

Independent Contractor Subcontractor Agreement

"I need an Independent Contractor Subcontractor Agreement under Indonesian law for an IT development project where we'll be hiring a software development company to provide ongoing maintenance and support services starting March 2025, with strict data protection and intellectual property provisions."

Document background
The Independent Contractor Subcontractor Agreement is essential for businesses operating in Indonesia that need to engage specialized service providers or subcontractors while maintaining clear independent contractor relationships. This document is particularly relevant in project-based industries where specific expertise or additional resource capacity is required. The agreement ensures compliance with Indonesian regulations, including Law No. 13 of 2003 on Manpower and Minister of Manpower Regulation No. 19 of 2012 on outsourcing and subcontracting. It outlines the scope of work, payment terms, performance expectations, and legal protections while clearly establishing the independent nature of the relationship to avoid misclassification issues under Indonesian employment law. The document is structured to protect both parties' interests while maintaining flexibility for project-specific requirements and ensuring regulatory compliance.
Suggested Sections

1. Parties: Identification of the contractor and subcontractor, including full legal names, addresses, and company registration details

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

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

4. Appointment and Scope of Services: Clear definition of the subcontractor's appointment and detailed description of services to be provided

5. Term and Termination: Duration of the agreement, renewal provisions, and circumstances for termination

6. Compensation and Payment Terms: Fee structure, payment schedule, expenses, and invoicing requirements

7. Independent Contractor Status: Clear statement of independent contractor relationship and disclaimer of employment relationship

8. Obligations of the Subcontractor: Specific duties, quality standards, reporting requirements, and performance metrics

9. Obligations of the Contractor: Responsibilities of the main contractor, including provision of information and resources

10. Intellectual Property Rights: Ownership and usage rights of intellectual property created during the engagement

11. Confidentiality: Protection of confidential information and trade secrets

12. Representations and Warranties: Statements of fact and promises made by both parties

13. Limitation of Liability: Limits on liability and indemnification provisions

14. Insurance: Required insurance coverage and minimum limits

15. General Provisions: Standard legal provisions including notices, amendments, governing law, and dispute resolution

Optional Sections

1. Non-Competition: Restrictions on competing activities, used when subcontractor will have access to sensitive competitive information

2. Non-Solicitation: Restrictions on soliciting employees or clients, used when subcontractor will have significant client contact

3. Equipment and Resources: Provisions regarding supply and use of equipment, needed when specific tools or resources are required

4. Data Protection: Specific provisions for handling personal data, required when processing personal information

5. Force Majeure: Provisions for unforeseen circumstances, particularly relevant in long-term or high-risk contracts

6. Health and Safety: Specific health and safety requirements, necessary for physical or on-site work

7. Training Requirements: Specific training or certification requirements, needed for specialized work

8. Compliance with Specific Regulations: Additional compliance requirements for regulated industries or specific sectors

Suggested Schedules

1. Schedule A - Scope of Services: Detailed description of services, deliverables, and performance metrics

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

3. Schedule C - Service Levels: Specific performance standards and metrics

4. Schedule D - Required Insurance: Detailed insurance requirements and minimum coverage limits

5. Schedule E - Key Personnel: List of key personnel assigned to the project and their qualifications

6. Schedule F - Approved Subcontractors: List of any pre-approved further subcontractors if applicable

7. Appendix 1 - Required Forms and Templates: Standard forms for invoicing, reporting, and other administrative requirements

8. Appendix 2 - Compliance Requirements: Specific regulatory or compliance requirements applicable to the services

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

Information Technology

Professional Services

Manufacturing

Engineering

Consulting

Energy

Mining

Telecommunications

Transportation and Logistics

Real Estate Development

Oil and Gas

Relevant Teams

Legal

Procurement

Operations

Human Resources

Finance

Risk Management

Compliance

Project Management Office

Supply Chain

Vendor Management

Relevant Roles

Legal Counsel

Procurement Manager

Project Manager

Contract Administrator

Operations Director

Human Resources Director

Chief Financial Officer

Risk Manager

Compliance Officer

Business Development Manager

Supply Chain Manager

Vendor Relations Manager

Industries
Indonesian Civil Code (KUHPerdata): The fundamental law governing contractual relationships in Indonesia, including provisions for formation, validity, and enforcement of contracts
Law No. 13 of 2003 on Manpower: Provides the framework for distinguishing between employees and independent contractors, and sets out basic rights and obligations in working relationships
Government Regulation No. 78 of 2015: Regulates wages and compensation structures, which may be relevant for determining fair compensation terms for contractors
Law No. 24 of 2000 on International Agreements: Relevant if the subcontractor agreement involves international parties or cross-border services
Law No. 40 of 2007 on Limited Liability Companies: Relevant for understanding the legal framework when contracting with Indonesian companies
Minister of Manpower Regulation No. 19 of 2012: Specific regulations on outsourcing and subcontracting arrangements in Indonesia
Law No. 28 of 2014 on Copyright: Governs intellectual property rights that may be created or used during the subcontractor relationship
Law No. 36 of 2008 on Income Tax: Regulates tax obligations for independent contractors and businesses in Indonesia
Law No. 11 of 2008 on Electronic Information and Transactions: Relevant for digital aspects of the contract and electronic communications between parties
Law No. 24 of 2009 on Flag, Language, State Emblem and National Anthem: Requires contracts involving Indonesian parties to be drafted in the Indonesian language (or bilingual)
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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