Material Supply Agreement Template for Indonesia

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Key Requirements PROMPT example:

Material Supply Agreement

"I need a Material Supply Agreement under Indonesian law for the supply of electronic components from a Jakarta-based manufacturer to our assembly plant, with strict quality control requirements and quarterly testing protocols, starting March 2025."

Document background
A Material Supply Agreement is essential for businesses operating in Indonesia that require regular procurement of materials for their operations. This document is particularly relevant when establishing long-term supply relationships and requires careful consideration of Indonesian legal requirements, including compliance with the Civil Code (Kitab Undang-undang Hukum Perdata) and Trade Law (Law No. 7 of 2014). The agreement typically covers critical aspects such as material specifications, quality standards, delivery terms, pricing mechanisms, and risk allocation. It's designed to provide clarity and certainty in commercial relationships while ensuring compliance with local regulations and business practices. The document is especially important for industries requiring consistent material quality and reliable supply chains, and can be adapted to various scales of operation, from small-scale local supply to major industrial procurement.
Suggested Sections

1. Parties: Identification of the supplier and buyer, including their complete legal names, registration numbers, and addresses

2. Background: Context of the agreement, including the supplier's business, buyer's requirements, and any relevant pre-contractual arrangements

3. Definitions: Definitions of key terms used throughout the agreement, including technical specifications and industry-specific terminology

4. Supply Obligations: Core obligations of the supplier regarding material supply, including quality standards and quantity commitments

5. Ordering Process: Procedures for placing and confirming orders, including minimum order quantities and lead times

6. Delivery Terms: Delivery arrangements, including timing, location, and Incoterms (if applicable)

7. Price and Payment: Pricing structure, payment terms, invoicing requirements, and any price adjustment mechanisms

8. Quality Requirements: Detailed quality specifications, testing procedures, and acceptance criteria

9. Title and Risk: Transfer of ownership and risk in the materials

10. Warranties: Supplier's warranties regarding the materials and standard of service

11. Term and Termination: Duration of the agreement and circumstances allowing early termination

12. Confidentiality: Protection of confidential information exchanged between parties

13. Force Majeure: Events excusing performance and procedures for handling force majeure situations

14. Governing Law and Dispute Resolution: Application of Indonesian law and dispute resolution procedures

Optional Sections

1. Exclusivity: Used when the supplier is granted exclusive rights or the buyer commits to exclusive purchasing

2. Minimum Purchase Commitment: Include when the buyer commits to purchasing minimum quantities

3. Storage and Warehousing: Required when the agreement includes storage arrangements or consignment stock

4. Insurance Requirements: Detailed insurance obligations beyond standard requirements

5. Intellectual Property: Needed when the supply involves proprietary materials or technology

6. Export/Import Requirements: Include for international supply arrangements

7. Environmental Compliance: Required for materials with environmental impact or hazardous substances

8. Change Control: Include for complex supply arrangements requiring formal change management

9. Performance Metrics: Used when specific KPIs are being tracked

10. Security Requirements: Include when handling sensitive or strategic materials

Suggested Schedules

1. Material Specifications: Detailed technical specifications of all materials covered by the agreement

2. Pricing Schedule: Detailed pricing for each material, including any volume discounts or special pricing arrangements

3. Quality Standards: Specific quality requirements, testing procedures, and acceptance criteria

4. Delivery Locations: List of approved delivery locations and any specific requirements for each

5. Key Personnel: Contact details of key personnel responsible for managing the supply relationship

6. Service Levels: Detailed service level requirements and measurement criteria

7. Forms and Procedures: Standard forms for ordering, delivery receipts, and quality certificates

8. Compliance Requirements: Specific regulatory or compliance requirements applicable to the materials

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

Manufacturing

Construction

Mining

Chemical Industry

Automotive

Electronics

Textile Industry

Food and Beverage

Pharmaceuticals

Industrial Equipment

Energy

Infrastructure

Agriculture

Metal Processing

Relevant Teams

Procurement

Legal

Supply Chain

Operations

Quality Control

Commercial

Logistics

Production

Risk Management

Compliance

Finance

Vendor Management

Relevant Roles

Procurement Manager

Supply Chain Director

Commercial Director

Legal Counsel

Operations Manager

Quality Control Manager

Contract Administrator

Purchasing Officer

Production Manager

Logistics Manager

Chief Operating Officer

Materials Manager

Vendor Relations Manager

Compliance Officer

Risk 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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