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Mutual Agreement To Terminate Contract

Mutual Agreement To Terminate Contract Template for Indonesia

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Key Requirements PROMPT example:

Mutual Agreement To Terminate Contract

"I need a Mutual Agreement to Terminate Contract under Indonesian law for ending a software development agreement with our vendor, with immediate termination and including provisions for the handover of source code and ongoing maintenance support until March 15, 2025."

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Document background
A Mutual Agreement to Terminate Contract is essential when parties wish to formally end their contractual relationship before its natural expiration or when they need to document the agreed termination of an ongoing contract. This document type is particularly relevant in the Indonesian business context, where it must comply with the Indonesian Civil Code (KUHPerdata) and related regulations. It typically includes provisions for the termination date, settlement of outstanding obligations, mutual releases, and handling of confidential information. The agreement ensures a clean break between parties while protecting their respective interests and providing legal certainty. It's commonly used across various sectors for different types of commercial contracts, from service agreements to supply contracts, and can be adapted to address specific requirements of the original contract being terminated.
Suggested Sections

1. Parties: Identification of all parties to the termination agreement, including their legal names, addresses, and authorized representatives

2. Background: Recitals explaining the existence of the original contract, its key terms, and the parties' mutual desire to terminate

3. Definitions: Key terms used in the agreement, including reference to the Original Contract, Effective Date of termination, and any other relevant defined terms

4. Termination: Clear statement of mutual agreement to terminate the Original Contract and the effective date of termination

5. Settlement of Outstanding Obligations: Details of any remaining payments, services, or obligations to be fulfilled by either party

6. Mutual Release: Provisions for mutual release from future claims and obligations under the Original Contract

7. Return of Property: Requirements for the return or disposal of any property, documents, or confidential information

8. Confidentiality: Confirmation of continuing confidentiality obligations, if any

9. Governing Law: Specification of Indonesian law as the governing law and jurisdiction

10. Execution: Signature blocks and execution requirements

Optional Sections

1. Survival Clauses: Identifies specific provisions from the original contract that will survive termination, used when certain obligations need to continue

2. Third Party Rights: Addresses the impact on any third party beneficiaries, used when the original contract involved third party rights

3. Tax Provisions: Specifies tax implications and responsibilities, used when the termination involves significant financial settlements

4. Non-Compete/Non-Solicitation: Confirms whether any restrictive covenants continue post-termination, used in business or employment contexts

5. Public Announcements: Guidelines for any public communications about the termination, used for high-profile or public-facing contracts

6. Dispute Resolution: Specific procedures for resolving any disputes arising from the termination, used in complex terminations

Suggested Schedules

1. Schedule 1 - Original Contract: Copy or details of the contract being terminated

2. Schedule 2 - Settlement Statement: Detailed breakdown of any financial settlements, payments, or adjustments

3. Schedule 3 - Property Inventory: List of any physical or intellectual property to be returned or transferred

4. Schedule 4 - Completion Checklist: List of actions to be completed by each party as part of the termination process

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant Industries

Manufacturing

Technology

Professional Services

Retail

Construction

Financial Services

Healthcare

Education

Telecommunications

Energy

Real Estate

Logistics and Transportation

Agriculture

Mining

Hospitality

Relevant Teams

Legal

Procurement

Finance

Operations

Commercial

Risk & Compliance

Business Development

Human Resources

Corporate Secretariat

Executive Leadership

Contract Administration

Relevant Roles

Legal Counsel

Contract Manager

Business Development Manager

Chief Executive Officer

Chief Financial Officer

Commercial Director

Procurement Manager

Operations Manager

Project Manager

Risk Manager

Compliance Officer

General Manager

Company Secretary

Human Resources Director

Legal Administrator

Industries
Indonesian Civil Code (KUHPerdata) Article 1338: Establishes the principle that all legally executed agreements bind the parties like law and must be performed in good faith. This is crucial for mutual termination agreements as it establishes the basic right of parties to enter into such agreements.
Indonesian Civil Code (KUHPerdata) Article 1266: Governs the conditions for contract termination and establishes that termination of reciprocal agreements must be requested through the courts, unless explicitly agreed otherwise by the parties.
Indonesian Civil Code (KUHPerdata) Article 1381: Lists the ways in which contractual obligations can be extinguished, including mutual agreement (mutual waiver) between the parties.
Law No. 13 of 2003 on Manpower (if employment-related): If the contract involves employment relationships, this law provides specific requirements for termination agreements and necessary provisions for protecting both employer and employee rights.
Indonesian Civil Code (KUHPerdata) Article 1320: Specifies the four essential conditions for a valid agreement: consent, capacity, specific object, and lawful cause. These conditions must also be met in the termination agreement.
Indonesian Civil Code (KUHPerdata) Article 1339: Stipulates that agreements bind the parties not only to what is expressly stated but also to everything that, according to the nature of the agreement, is required by propriety, custom, or law.
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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