Sourcing Agent Agreement Template for Indonesia

This document is a comprehensive legal agreement governed by Indonesian law that establishes and regulates the relationship between a principal company and a sourcing agent in Indonesia. It outlines the agent's authority to identify, evaluate, and engage with suppliers on behalf of the principal, while ensuring compliance with Indonesian trade regulations, agency laws, and commercial requirements. The agreement includes detailed provisions for compensation, performance metrics, compliance obligations, and risk allocation, specifically tailored to meet Indonesian legal requirements and business practices.

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What is a Sourcing Agent Agreement?

A Sourcing Agent Agreement is essential for companies seeking to establish a formal procurement presence in Indonesia through a local representative. This document is typically used when a company (principal) needs to engage a professional agent to identify, evaluate, and manage relationships with Indonesian suppliers. The agreement must comply with Indonesian Civil Code requirements, trade regulations, and agency laws while addressing specific sourcing activities, commission structures, and operational procedures. It's particularly important for foreign companies entering the Indonesian market or expanding their supplier base in the region, as it provides legal protection and clear guidelines for both parties while ensuring compliance with local regulations regarding trade representation and agency relationships.

What sections should be included in a Sourcing Agent Agreement?

1. Parties: Identification of the Principal and the Sourcing Agent, including registration details and addresses

2. Background: Context of the agreement, business objectives, and relationship overview

3. Definitions: Key terms used throughout the agreement, including specific sourcing and trade-related terminology

4. Appointment and Scope: Formal appointment of agent and detailed scope of authority and services

5. Agent's Duties and Responsibilities: Comprehensive list of agent's obligations, including sourcing, negotiation, and reporting duties

6. Principal's Obligations: Principal's responsibilities, including information provision and payment obligations

7. Compensation and Payment Terms: Fee structure, payment schedule, and expense reimbursement terms

8. Compliance and Regulations: Obligations to comply with Indonesian laws, trade regulations, and anti-corruption requirements

9. Confidentiality: Protection of confidential information and trade secrets

10. Term and Termination: Duration of agreement, renewal terms, and termination provisions

11. Liability and Indemnification: Risk allocation, limitation of liability, and indemnification obligations

12. Force Majeure: Provisions for unforeseen circumstances affecting performance

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

14. General Provisions: Standard boilerplate clauses including notices, amendments, and severability

What sections are optional to include in a Sourcing Agent Agreement?

1. Financial Management: Required if agent handles funds or makes payments on principal's behalf

2. Licensing and Permits: Needed if agent requires specific licenses for certain industries or activities

3. Personnel and Employment: Include when agent will hire employees or subcontractors

4. Intellectual Property: Required if agent will handle principal's IP or create new IP during services

5. Insurance: Include if specific insurance coverage is required for the services

6. Export Controls: Necessary for international trade activities

7. Quality Control: Include for sourcing of specific products requiring quality standards

8. Non-Competition: Optional restrictions on agent's activities with competitors

9. Territory Restrictions: Define geographical limitations if applicable

What schedules should be included in a Sourcing Agent Agreement?

1. Schedule A - Services Description: Detailed scope of sourcing services and specific responsibilities

2. Schedule B - Fee Structure: Detailed breakdown of commission rates, fixed fees, and payment calculations

3. Schedule C - Approved Suppliers: List of pre-approved suppliers or supplier criteria

4. Schedule D - Reporting Requirements: Templates and timeframes for required reports

5. Schedule E - Compliance Checklist: Specific regulatory and compliance requirements

6. Schedule F - Operating Procedures: Step-by-step procedures for sourcing activities

7. Schedule G - Performance Metrics: KPIs and performance evaluation criteria

8. Schedule H - Territory Map: Geographical area covered by the agreement if applicable

9. Appendix 1 - Required Forms: Standard forms for purchase orders, supplier evaluations, and reports

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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