Installment Sales Contract Template for Indonesia

An installment sales contract is essential when you need to sell goods in Indonesia with payments spread over time, providing legal protection while offering buyers flexible payment options. This agreement establishes clear terms for the sale, delivery, and payment schedule while ensuring compliance with Indonesian commercial law and consumer protection requirements.

When do you need this document?

You need this contract when selling high-value items like vehicles, machinery, electronics, or furniture where buyers cannot or prefer not to pay the full amount upfront. It's particularly important for businesses selling to consumers under Law No. 8 of 1999 on Consumer Protection, which requires clear disclosure of payment terms and buyer rights. Companies selling equipment to other businesses also use this contract to facilitate cash flow management while securing their interests through title retention clauses. Financial institutions often require this document when providing financing for installment purchases, and it's mandatory for transactions involving fiduciary security under Law No. 42 of 1999.

Key legal considerations

Your contract must include comprehensive payment schedules with specific due dates, late payment penalties, and clear consequences for default. Title retention clauses are crucial, allowing you to maintain ownership until full payment is received, which provides security if the buyer defaults. You must specify detailed product descriptions, delivery terms, and warranty provisions to avoid disputes. Default and repossession clauses should comply with Indonesian debt collection laws and specify the process for recovering goods. Insurance requirements protect both parties' interests, and you should include provisions for early payment discounts or penalties for late payments. Consumer protection compliance is mandatory for B2C transactions, requiring transparent disclosure of total costs, interest rates, and buyer cancellation rights.

Legal requirements in Indonesia

Your contract must comply with the Indonesian Civil Code (KUHPerdata) for fundamental contract validity, including proper offer, acceptance, and consideration. Consumer transactions must follow Law No. 8 of 1999 on Consumer Protection, which mandates clear pricing disclosure, quality guarantees, and dispute resolution mechanisms. If you're involved in financing arrangements, OJK Regulation No. 35/POJK.05/2018 governs financing company operations and documentation requirements. Minister of Trade Regulation No. 22/M-DAG/PER/3/2016 applies to goods distribution and trading activities, requiring proper licensing and documentation. For movable assets securing the installment payments, Law No. 42 of 1999 on Fiduciary Security establishes registration and enforcement requirements. All contracts must be in Indonesian language for consumer transactions, and foreign companies must ensure compliance with local commercial registration requirements.