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Preferred Supplier Agreement

Preferred Supplier Agreement Template for Indonesia

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Key Requirements PROMPT example:

Preferred Supplier Agreement

"I need a Preferred Supplier Agreement for my Indonesian manufacturing company to establish an exclusive relationship with a key components supplier based in Jakarta, with specific focus on quality control measures and minimum purchase commitments starting March 2025."

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Document background
The Preferred Supplier Agreement is a crucial commercial document used when a company wishes to establish a long-term, preferential relationship with a key supplier in Indonesia. This agreement is particularly relevant when a business seeks to secure reliable supply chains, standardize procurement processes, and obtain favorable terms through volume commitments. The document addresses specific requirements under Indonesian law, including the Civil Code (KUHPerdata) and relevant trade regulations, while establishing detailed frameworks for pricing, quality standards, delivery terms, and performance metrics. It's commonly used in situations where consistent supply quality and reliability are essential, and where the volume of business justifies a formal preferred supplier arrangement. The agreement typically includes provisions for regular performance reviews, pricing adjustments, and dispute resolution mechanisms, all structured to comply with Indonesian legal requirements and business practices.
Suggested Sections

1. Parties: Identification of the parties entering into the agreement, including their full legal names, registration numbers, and addresses

2. Background: Context of the agreement, relationship between parties, and purpose of establishing a preferred supplier arrangement

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

4. Appointment and Scope: Terms of appointment as preferred supplier and scope of products/services covered

5. Term and Renewal: Duration of the agreement and conditions for renewal

6. Supply Obligations: Key obligations of the supplier including quality standards, delivery requirements, and performance metrics

7. Ordering Process: Procedures for placing and accepting orders

8. Pricing and Payment: Pricing structure, payment terms, and invoicing requirements

9. Quality Assurance: Quality standards, inspection rights, and quality control procedures

10. Delivery and Logistics: Delivery terms, timelines, and logistics arrangements

11. Warranties and Representations: Warranties regarding products/services and general business operations

12. Compliance: Compliance with laws, regulations, and industry standards

13. Liability and Indemnification: Allocation of risks and indemnification obligations

14. Termination: Grounds and procedures for termination

15. Governing Law and Dispute Resolution: Choice of law and dispute resolution mechanisms

16. General Provisions: Standard boilerplate clauses including notices, assignment, and amendment procedures

Optional Sections

1. Exclusivity: Terms of exclusive supply arrangement, if applicable

2. Minimum Purchase Commitments: Include when there are guaranteed minimum purchase volumes

3. Performance Incentives: Bonus structures or incentives for exceeding performance targets

4. Technology and IP: When intellectual property or technology transfer is involved

5. Staff and Training: When supplier needs to provide training or dedicated staff

6. Insurance: Detailed insurance requirements beyond standard coverage

7. Environmental Compliance: For industries with specific environmental impact considerations

8. Data Protection: When personal or sensitive data processing is involved

9. Force Majeure: Detailed force majeure provisions for high-risk or critical supply arrangements

10. Change Management: For complex supply arrangements requiring formal change processes

Suggested Schedules

1. Product/Service Specifications: Detailed specifications of products or services to be supplied

2. Pricing Schedule: Detailed pricing structure, including any volume discounts or special pricing arrangements

3. Service Levels: Detailed service level requirements and KPIs

4. Approved Locations: List of approved manufacturing or service delivery locations

5. Quality Standards: Detailed quality requirements and testing procedures

6. Key Personnel: List of key personnel from both parties responsible for managing the relationship

7. Standard Operating Procedures: Detailed operational procedures and requirements

8. Compliance Requirements: Specific compliance requirements and certifications

9. Form of Purchase Order: Template purchase order form

10. Insurance Requirements: Detailed insurance coverage requirements and minimum limits

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 legal definitions
Agreement
Applicable Laws
Business Day
Commencement Date
Confidential Information
Contract Year
Customer
Delivery Location
Effective Date
Force Majeure Event
Good Industry Practice
Goods
Intellectual Property Rights
Key Performance Indicators
Minimum Purchase Commitment
Order
Preferred Supplier Status
Price
Product Specifications
Purchase Order
Quality Standards
Related Entities
Services
Service Levels
Specifications
Supplier
Supply Terms
Term
Territory
Third Party
Working Hours
Indonesian Business Hours
Performance Metrics
Quality Management System
Regulatory Approvals
Response Time
Safety Standards
Service Credits
Supply Chain
Technical Documentation
Warranty Period
Clauses
Interpretation
Appointment
Term and Renewal
Scope of Supply
Exclusivity
Ordering Process
Pricing and Payment
Delivery Terms
Quality Requirements
Performance Standards
Service Levels
Warranties
Title and Risk
Compliance
Audit Rights
Record Keeping
Confidentiality
Intellectual Property
Data Protection
Force Majeure
Insurance
Liability and Indemnification
Termination
Exit Management
Change Control
Assignment and Subcontracting
Anti-Corruption
Competition Law Compliance
Dispute Resolution
Governing Law
Notices
Entire Agreement
Severability
Variation
Waiver
Health and Safety
Environmental Compliance
Labor and Employment
Business Continuity
Reporting Requirements
Performance Review
Relevant Industries

Manufacturing

Retail

Technology

Automotive

Construction

Healthcare

Food and Beverage

Electronics

Telecommunications

Energy

Mining

Agricultural Products

Industrial Equipment

Consumer Goods

Pharmaceuticals

Relevant Teams

Procurement

Legal

Supply Chain

Operations

Finance

Compliance

Quality Assurance

Commercial

Vendor Management

Strategic Sourcing

Relevant Roles

Procurement Manager

Supply Chain Director

Commercial Director

Operations Manager

Legal Counsel

Contract Manager

Chief Financial Officer

Purchasing Officer

Vendor Relations Manager

Quality Assurance Manager

Compliance Officer

Supply Chain Analyst

Category Manager

Strategic Sourcing Manager

Chief Operating Officer

Industries
Indonesian Civil Code (KUHPerdata): The fundamental law governing contracts and agreements in Indonesia, including formation, validity, and enforcement of contracts
Law No. 5 of 1999 (Competition Law): Prohibits monopolistic practices and unfair business competition, relevant for exclusive supplier arrangements
Law No. 7 of 2014 on Trade: Regulates trading activities in Indonesia, including domestic and international trade relationships
Law No. 25 of 2007 on Investment: Regulates foreign and domestic investment, important if any party is a foreign entity
Government Regulation No. 80 of 2019: Regulates e-commerce and digital transactions, relevant if the supply agreement involves online transactions or digital goods
Law No. 8 of 1999 on Consumer Protection: Ensures consumer rights are protected in the supply chain
Law No. 13 of 2003 on Manpower: Relevant if the supplier agreement includes provisions about deployed personnel or service providers
Presidential Regulation No. 71 of 2019: Regulates electronic systems and transactions, important for digital documentation and communications
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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