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Framework Agreement Contract for Indonesia

Framework Agreement Contract Template for Indonesia

A Framework Agreement Contract governed by Indonesian law establishes the general terms and conditions that will apply to future transactions between the parties. This document serves as a master agreement that streamlines subsequent dealings by pre-agreeing on key commercial and legal terms, while complying with Indonesian legal requirements including Law No. 24 of 2009 regarding language requirements. It sets out the mechanism for future orders, pricing structures, performance standards, and dispute resolution procedures, all within the context of Indonesian commercial law and practice.

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What is a Framework Agreement Contract?

The Framework Agreement Contract is a fundamental commercial document used in Indonesian business practice to establish long-term business relationships where multiple transactions are anticipated. It provides a streamlined approach to recurring business dealings by setting out pre-agreed terms and conditions that will govern future transactions. This type of agreement is particularly valuable in the Indonesian market where relationships between parties may involve multiple contracts over time, and where compliance with local law requirements, including language requirements under Law No. 24 of 2009, is crucial. The document typically includes provisions for ordering mechanisms, pricing structures, performance standards, and dispute resolution, while maintaining flexibility for specific terms to be agreed in individual purchase orders or work orders. It's especially useful for businesses operating in Indonesia that require a structured yet flexible approach to ongoing commercial relationships.

What sections should be included in a Framework Agreement Contract?

1. Parties: Identification and details of the contracting parties, including their legal status and authority to enter into the agreement

2. Background: Context of the agreement, relationship between parties, and general purpose of the framework arrangement

3. Definitions and Interpretation: Definitions of key terms and interpretation rules, including language interpretation principles for bilingual versions

4. Framework Mechanics: Process for issuing and accepting purchase orders or work orders under the framework

5. Duration and Renewal: Term of the framework agreement, including commencement date, initial term, and renewal provisions

6. Ordering Process: Detailed procedures for placing orders, acceptance, and confirmation under the framework

7. Prices and Payment: Pricing mechanisms, payment terms, invoicing requirements, and price adjustment provisions

8. Performance Standards: Quality standards, service levels, and performance metrics applicable to all orders under the framework

9. Warranties and Representations: Standard warranties and representations from both parties

10. Liability and Indemnification: Allocation of risks, limitation of liability, and indemnification obligations

11. Termination: Grounds for termination, termination process, and consequences of termination

12. Confidentiality: Protection of confidential information exchanged under the framework

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

14. General Provisions: Standard boilerplate clauses including notices, amendments, and entire agreement provisions

What sections are optional to include in a Framework Agreement Contract?

1. Intellectual Property Rights: Required when the framework involves creation, licensing, or transfer of intellectual property

2. Compliance with Laws: Detailed section needed when operating in heavily regulated industries or involving cross-border elements

3. Force Majeure: Detailed provisions for force majeure events, particularly relevant in long-term frameworks or those involving manufacturing/supply

4. Insurance: Detailed insurance requirements when the nature of goods/services involves significant risks

5. Data Protection: Required when personal data processing is involved in the framework arrangement

6. Anti-Corruption: Detailed provisions needed when dealing with government entities or high-risk sectors

7. Environmental Compliance: Required for frameworks involving environmental impacts or sustainability commitments

What schedules should be included in a Framework Agreement Contract?

1. Schedule 1 - Goods and Services Specification: Detailed specifications of goods/services that may be ordered under the framework

2. Schedule 2 - Pricing Schedule: Detailed pricing structure, including any volume discounts or price adjustment mechanisms

3. Schedule 3 - Service Levels: Detailed service level requirements and measurement metrics

4. Schedule 4 - Order Form Template: Standard template for placing orders under the framework

5. Schedule 5 - Key Personnel: List of key personnel from both parties responsible for framework management

6. Schedule 6 - Security Requirements: Security protocols and requirements for service delivery or goods supply

7. Appendix A - Compliance Requirements: Specific regulatory or compliance requirements applicable to the framework

8. Appendix B - Technical Standards: Applicable technical standards and specifications

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Indonesia

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions










































Clauses














































Relevant Industries

Manufacturing

Technology

Construction

Energy

Mining

Healthcare

Retail

Telecommunications

Financial Services

Logistics

Public Sector

Infrastructure

Agriculture

Professional Services

Relevant Teams

Legal

Procurement

Commercial

Operations

Supply Chain

Business Development

Compliance

Finance

Risk Management

Strategic Sourcing

Contract Administration

Relevant Roles

Legal Counsel

Procurement Manager

Commercial Director

Contract Manager

Chief Operating Officer

Supply Chain Manager

Business Development Manager

Compliance Officer

General Manager

Operations Director

Chief Financial Officer

Purchasing Manager

Legal Director

Risk Manager

Strategic Sourcing Manager

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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