Document background
The Preliminary Sale Agreement is a fundamental document in Indonesian commercial transactions, used when parties have reached initial understanding on key terms but require a formal framework for further negotiation and due diligence. This document type is particularly important under Indonesian law, where preliminary agreements (perjanjian pendahuluan) hold significant legal weight and can be enforced under the Civil Code (KUHPerdata). It is commonly used in both asset and share sales, real estate transactions, and business acquisitions. The agreement typically includes provisions for exclusivity periods, allowing buyers to conduct due diligence while protecting sellers' interests through good faith deposits. It serves as a crucial bridge between initial negotiations and the final sale agreement, establishing clear obligations and timelines while addressing key regulatory requirements under Indonesian law. The document must carefully balance the need for binding preliminary commitments with flexibility for parties to address findings from due diligence and regulatory approvals.
