Sales Agreement Template for Indonesia

A Sales Agreement is a legally binding contract that establishes the terms and conditions for the sale and purchase of goods between businesses in Indonesia. Under Indonesian law, particularly the Civil Code (KUHPerdata) and Commercial Code (KUHD), this document serves as your primary legal protection in commercial transactions, clearly defining each party's rights, obligations, and remedies in case of disputes.

When do you need this document?

You need a Sales Agreement when conducting any significant commercial transaction in Indonesia. This includes establishing relationships between manufacturers and distributors, setting up supply chains between wholesalers and retailers, or formalizing import/export arrangements with foreign companies. The document is essential for recurring business relationships where you need standardized terms across multiple transactions. It's particularly important when dealing with high-value goods, specialized products, or when extending credit terms to buyers. Indonesian businesses also require this agreement when working with foreign companies to ensure compliance with local trade regulations and consumer protection laws.

Key legal considerations

Your Sales Agreement must address several critical legal elements to be enforceable under Indonesian law. The contract must clearly identify all parties with complete legal names and addresses, specify the goods being sold with detailed descriptions, and establish definitive pricing and payment terms. Risk allocation is crucial - you need to specify when title transfers, who bears responsibility for delivery, and how to handle damaged or defective goods. Include warranty provisions that comply with Law No. 8 of 1999 on Consumer Protection if selling to end consumers. Force majeure clauses should reference Indonesian legal concepts and local conditions. Dispute resolution mechanisms must specify Indonesian jurisdiction and applicable law. Payment terms should consider Indonesian banking regulations and foreign exchange controls for international transactions.

Legal requirements in Indonesia

Indonesian law imposes specific requirements on Sales Agreements that you must observe for validity and enforceability. Under Law No. 24 of 2009, contracts involving Indonesian parties must be drafted in Indonesian or include Indonesian translations. The agreement must comply with the Indonesian Civil Code's contract formation requirements, including offer, acceptance, and consideration. For international trade, ensure compliance with Law No. 7 of 2014 on Trade and relevant customs regulations. If conducting transactions electronically, incorporate provisions from Law No. 11 of 2008 on Electronic Information and Transactions. Consumer transactions must include mandatory disclosures required by consumer protection laws. Tax obligations under Indonesian tax law should be clearly allocated between parties. Additionally, certain goods may require special licenses or permits under sectoral regulations, and your agreement should address compliance with these requirements.