Source Code Escrow Agreement Template for Indonesia

A Source Code Escrow Agreement protects your business interests when you rely on licensed software for critical operations. Under Indonesian law, this tripartite contract creates a secure arrangement where the software owner deposits source code and related materials with an independent escrow agent, ensuring you can access these materials if specific release conditions are met.

When do you need this document?

You need this agreement when licensing mission-critical software where business continuity is paramount. This includes enterprise resource planning systems, custom-developed applications, or specialized industry software where the failure or discontinuation could severely impact operations. It's particularly important when you've made significant financial investments in software implementation, training, or integration. The agreement becomes essential when the software vendor is a smaller company with uncertain financial stability, or when the software contains proprietary algorithms critical to your competitive advantage.

Key legal considerations

The agreement must clearly define deposit materials, including source code, documentation, development tools, and compilation instructions. Release events should be precisely specified, typically covering vendor bankruptcy, material breach of support obligations, or cessation of business operations. Verification procedures must be established to ensure deposited materials are complete and current, with regular update requirements for the software owner. Intellectual property protection clauses are crucial, limiting your use of released materials to maintaining existing installations rather than creating derivative works. The agreement should include confidentiality obligations binding all parties and specify technical verification processes to confirm the deposited materials can successfully compile and function.

Legal requirements in Indonesia

Under Indonesian law, the agreement must comply with the Civil Code (KUHPerdata) governing contract formation and validity. Law No. 28 of 2014 on Copyright provides the framework for protecting software and source code as copyrightable works, establishing the legal basis for ownership rights within the escrow arrangement. The Electronic Information and Transactions Law (Law No. 11 of 2008) governs digital storage and electronic signatures, ensuring the escrow process meets legal standards for electronic document handling. If release conditions involve vendor insolvency, provisions must align with Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment Obligations. The agreement should specify Indonesian jurisdiction for dispute resolution and include provisions for compliance with Government Regulation No. 71 of 2019 on Electronic Systems and Transactions, particularly regarding data security and electronic storage requirements.