Option To Buy Contract Template for Indonesia

The Option To Buy Contract serves as a crucial legal instrument in Indonesian business transactions, providing a structured framework for securing future purchase rights while managing risk and maintaining flexibility. This document is particularly valuable when parties need time to conduct due diligence, arrange financing, or obtain regulatory approvals before committing to a full purchase. Governed by Indonesian law, particularly the Civil Code (KUHPer) and relevant sector-specific regulations, the contract must incorporate specific local legal requirements including proper notarization and registration where necessary. The document typically includes comprehensive details about the asset, pricing mechanisms, exercise procedures, and conditions precedent, while ensuring compliance with Indonesian foreign investment restrictions if international parties are involved. It's commonly used in real estate transactions, business acquisitions, and asset purchases where parties seek to secure future purchase rights while maintaining current market position.

1. Parties: Identification of the Option Grantor and Option Holder, including complete legal names, addresses, and registration details if companies

2. Background: Context of the agreement and brief description of the parties' intention to enter into an option arrangement

3. Definitions: Definitions of key terms used throughout the agreement, including 'Option Period', 'Strike Price', 'Subject Matter', etc.

4. Grant of Option: Clear statement of the option rights being granted, including exclusivity provisions if applicable

5. Option Period: Specification of the duration for which the option is valid and exercisable

6. Exercise Price: Details of the price at which the option can be exercised, including any adjustment mechanisms

7. Exercise Procedure: Step-by-step process for exercising the option, including notice requirements and timing

8. Payment Terms: Details of option fee payment and purchase price payment structure

9. Representations and Warranties: Standard representations regarding authority, ownership, and capacity to enter into the agreement

10. Conditions Precedent: Any conditions that must be satisfied before the option can be exercised

11. Default and Termination: Circumstances under which the agreement can be terminated and consequences of default

12. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and choice of forum for disputes

13. Notices: Process and requirements for giving formal notices under the agreement

14. General Provisions: Standard boilerplate clauses including entire agreement, amendments, and severability