A Letter of Intent to Supply Goods is commonly used in Indonesian business transactions as a preliminary step before entering into a definitive supply agreement. This document is particularly relevant when parties need to formalize their initial understanding while allowing flexibility for detailed negotiations. It typically includes proposed commercial terms, timelines, and basic framework for the supply relationship, while maintaining a non-binding nature except for specific provisions like confidentiality. The document must comply with Indonesian legal requirements, including the Civil Code (KUHPerdata) and relevant trade regulations, making it essential for both domestic and international trade relationships. It serves as a crucial tool for business development and procurement processes, especially in industries where formal documentation of commercial intentions is necessary for internal approvals or relationship building.
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1. Date and Address Block: Complete letterhead, date, and addressee details following formal letter format
2. Subject Line: Clear indication that this is a Letter of Intent for Supply of Goods
3. Opening Paragraph: Introduction of the parties and brief context of the proposed supply relationship
4. Background: Brief description of both parties and the context of the proposed supply arrangement
5. Purpose: Clear statement of intention to enter into a supply arrangement and scope of goods to be supplied
6. Key Commercial Terms: Outline of principal terms including nature of goods, estimated quantities, and indicative pricing structure
7. Timeline: Proposed timeline for negotiation and execution of definitive agreements
8. Non-Binding Nature: Clear statement that the LOI is non-binding except for specific clauses
9. Confidentiality: Statement regarding the confidential nature of discussions and information exchange
10. Closing and Signatures: Formal closing, signature blocks for both parties
1. Exclusivity: Optional clause providing for exclusive negotiations for a specified period, used when parties want to ensure no parallel negotiations
2. Costs: Statement regarding who bears the costs of negotiation and documentation, included when significant costs are anticipated
3. Governing Law: Specification of applicable law, while common, can be omitted in simpler LOIs
4. Break Fee: Provisions for compensation if either party withdraws, included in high-value or strategic arrangements
5. Due Diligence: Framework for information exchange and due diligence process, included when significant due diligence is anticipated
1. Appendix A - Preliminary Product Specifications: Basic specifications of the goods to be supplied, including quality standards and technical requirements
2. Appendix B - Indicative Pricing Structure: Preliminary pricing methodology and any relevant pricing factors or mechanisms
3. Appendix C - Proposed Timeline: Detailed timeline for negotiation, due diligence, and execution of definitive agreements
4. Appendix D - Contact Details: List of key contact persons from both parties for the negotiation process
Relevant legal definitions
Clauses
Relevant Industries
Manufacturing
Consumer Goods
Electronics
Automotive
Textiles
Food and Beverage
Agriculture
Mining
Chemicals
Pharmaceuticals
Construction Materials
Industrial Equipment
Retail
Technology
Energy
Relevant Teams
Legal
Procurement
Supply Chain
Commercial
Business Development
Operations
Sales
International Trade
Vendor Management
Compliance
Contract Administration
Relevant Roles
Chief Executive Officer
Chief Operating Officer
Procurement Director
Supply Chain Manager
Purchasing Manager
Business Development Director
Commercial Director
Operations Manager
Legal Counsel
Contract Manager
Sourcing Manager
Category Manager
Vendor Relations Manager
Import/Export Manager
Trade Compliance Officer
Sales Director
General Manager
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