The Contractor Commission Agreement is essential for businesses operating in Indonesia who engage independent contractors on a commission basis. This document is particularly relevant when companies need to formalize relationships with sales agents, business developers, or other contractors who are compensated based on performance or results. The agreement must comply with Indonesian legal requirements, including the Civil Code (KUHPer) and Law No. 13 of 2003 on Manpower, while clearly distinguishing the arrangement from an employment relationship. It typically includes detailed commission structures, performance metrics, territory assignments, and essential legal protections for both parties. This type of agreement is commonly used in various sectors where companies expand their market reach through independent contractors rather than direct employees.
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1. Parties: Identification of the Principal/Company and the Contractor, including full legal names, registration numbers, and addresses
2. Background: Context of the agreement, nature of the Principal's business, and the purpose of engaging the Contractor
3. Definitions: Key terms used throughout the agreement, including 'Services', 'Commission', 'Territory', 'Customers', etc.
4. Appointment and Scope: Terms of the Contractor's appointment, scope of services, and territory/market coverage
5. Term and Termination: Duration of the agreement, renewal terms, and conditions for termination
6. Commission Structure: Detailed explanation of commission rates, calculation methods, and payment terms
7. Payment Terms: Timeline for commission payments, invoice requirements, and payment methods
8. Contractor's Obligations: Key responsibilities, performance standards, and reporting requirements
9. Principal's Obligations: Support, information, and resources to be provided by the Principal
10. Intellectual Property: Ownership and usage rights of IP created during the engagement
11. Confidentiality: Protection of confidential information and trade secrets
12. Non-Competition: Restrictions on competing activities during and after the agreement
13. Independent Contractor Status: Clear statement of independent contractor relationship and not employment
14. Dispute Resolution: Process for handling disputes, including jurisdiction and governing law
15. General Provisions: Standard boilerplate clauses including notices, amendments, and severability
1. Performance Targets: Include when specific sales or performance metrics are required as conditions for commission
2. Training Requirements: Include when the Contractor must undergo specific training or certification
3. Insurance Requirements: Include when the Contractor must maintain specific insurance coverage
4. Customer Relations: Include when the Contractor has direct customer interaction responsibilities
5. Marketing and Promotion: Include when the Contractor has marketing responsibilities
6. Compliance with Industry Regulations: Include when operating in regulated industries (e.g., financial services, healthcare)
7. Force Majeure: Include when specific provisions for unforeseen circumstances are needed
8. Data Protection: Include when personal data processing is involved
9. Subcontracting: Include when the Contractor may need to subcontract certain services
1. Schedule 1 - Commission Rates: Detailed breakdown of commission percentages, tiers, and special rates
2. Schedule 2 - Territory: Detailed description of geographical or market territory assigned
3. Schedule 3 - Services: Detailed scope of services and deliverables
4. Schedule 4 - Performance Metrics: Specific KPIs and performance evaluation criteria
5. Schedule 5 - Approved Customer List: List of customers or customer types within the Contractor's scope
6. Appendix A - Reporting Templates: Standard forms for activity and performance reporting
7. Appendix B - Commission Calculation Examples: Examples showing how commissions are calculated in various scenarios
Relevant legal definitions
Clauses
Relevant Industries
Retail
Real Estate
Financial Services
Technology
Manufacturing
Consumer Goods
Professional Services
Insurance
Telecommunications
Healthcare
Education
Energy
Construction
Hospitality
Automotive
Relevant Teams
Legal
Human Resources
Sales
Business Development
Commercial
Operations
Compliance
Finance
Procurement
Risk Management
Relevant Roles
Sales Director
Business Development Manager
Legal Counsel
HR Director
Procurement Manager
Commercial Director
Operations Manager
Regional Sales Manager
Channel Partner Manager
Chief Commercial Officer
Compliance Officer
Contract Administrator
Sales Operations Manager
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