Service Agency Agreement Template for Indonesia

A Service Agency Agreement governed by Indonesian law establishes a formal relationship between a principal company and an agent who will provide specified services in Indonesia. This agreement complies with Indonesian Civil Code requirements and relevant commercial regulations, defining the scope of the agent's authority, territorial restrictions, compensation structure, and compliance obligations. It includes specific provisions required under Indonesian agency laws, addressing local business practices and regulatory requirements while protecting both parties' interests in the agency relationship.

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What is a Service Agency Agreement?

The Service Agency Agreement is a crucial document for businesses operating in Indonesia who wish to engage agents to provide services on their behalf. This agreement type is commonly used when a company (Principal) needs local representation or service delivery in Indonesia but doesn't want to establish its own local entity or hire employees directly. The agreement must comply with Indonesian Civil Code requirements and relevant agency regulations, including Law No. 40 of 2007 and Government Regulation No. 42 of 2007. It defines the agent's scope of authority, territorial rights, compensation structure, and obligations while ensuring compliance with local laws. This document is particularly important given Indonesia's complex regulatory environment and the need for clear delineation of rights and responsibilities in agency relationships.

What sections should be included in a Service Agency Agreement?

1. Parties: Identification of the Principal and the Agent, including their complete legal names, registration numbers, and addresses

2. Background: Context of the agreement, nature of the Principal's business, and purpose of appointing the Agent

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

4. Appointment and Scope: Formal appointment of the Agent and detailed scope of services to be provided

5. Territory and Exclusivity: Geographical area of operation and whether the appointment is exclusive or non-exclusive

6. Agent's Rights and Obligations: Detailed responsibilities, duties, and authority of the Agent

7. Principal's Rights and Obligations: Responsibilities and commitments of the Principal

8. Compensation and Payment Terms: Commission structure, payment terms, and calculation methods

9. Reporting and Compliance: Requirements for activity reporting, record-keeping, and compliance with laws

10. Intellectual Property Rights: Usage rights and restrictions regarding the Principal's IP

11. Confidentiality: Protection of confidential information and trade secrets

12. Term and Termination: Duration of agreement and termination provisions

13. Post-Termination Obligations: Obligations and restrictions after agreement ends

14. Governing Law and Dispute Resolution: Applicable law and method of resolving disputes

15. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment

What sections are optional to include in a Service Agency Agreement?

1. Performance Targets: Specific sales or performance targets, used when the agency relationship is performance-based

2. Training and Support: Details of training and support provided by Principal, included when significant training is required

3. Insurance Requirements: Specific insurance obligations, included for high-risk services or when required by industry

4. Marketing and Promotion: Marketing obligations and guidelines, included when Agent has marketing responsibilities

5. Sub-Agents: Terms for appointing sub-agents, included when sub-agents are permitted

6. Data Protection: Specific data protection obligations, included when personal data processing is involved

7. Force Majeure: Provisions for unforeseen circumstances, particularly relevant in long-term agreements

8. Anti-Corruption: Specific anti-corruption provisions, particularly important for international arrangements

What schedules should be included in a Service Agency Agreement?

1. Schedule 1 - Services Description: Detailed description of services to be provided by the Agent

2. Schedule 2 - Commission Structure: Detailed breakdown of commission rates and calculation methods

3. Schedule 3 - Territory Description: Detailed description of geographical territory and any excluded areas

4. Schedule 4 - Reporting Templates: Standard forms and templates for required reports

5. Schedule 5 - Service Level Requirements: Specific performance metrics and service standards

6. Appendix A - Power of Attorney: Formal power of attorney document if required under Indonesian law

7. Appendix B - Compliance Guidelines: Detailed compliance requirements and procedures

8. Appendix C - Brand Guidelines: Guidelines for use of Principal's branding and marketing materials

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

Jurisdiction

Indonesia

Publisher

Genie AI

Document Type

Agency Agreement

Cost

Free to use

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