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Master Supply Agreement for Indonesia

Master Supply Agreement Template for Indonesia

A comprehensive legal agreement governed by Indonesian law that establishes the framework for an ongoing supply relationship between a supplier and a buyer. This document sets out the fundamental terms and conditions governing multiple transactions over time, including ordering processes, delivery requirements, quality standards, pricing mechanisms, and risk allocation. It ensures compliance with Indonesian regulations, including mandatory use of Bahasa Indonesia, while incorporating international best practices in supply chain management. The agreement serves as an umbrella document under which specific purchase orders can be issued without negotiating basic terms for each transaction.

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What is a Master Supply Agreement?

A Master Supply Agreement is essential for businesses establishing long-term supply relationships in Indonesia. This document type is particularly relevant when parties anticipate ongoing, repeated transactions and need a robust framework to govern their supply relationship. The agreement must comply with Indonesian law requirements, including the Civil Code (KUHPerdata) and trade regulations, while addressing key commercial aspects such as ordering procedures, quality standards, and risk allocation. Given Indonesia's mandatory language requirements, the agreement typically includes provisions for dual-language execution. The document is designed to streamline future transactions by establishing standard terms upfront, reducing negotiation time for individual purchase orders. It's particularly valuable for businesses operating in Indonesia's manufacturing, retail, and resource sectors, where regular supply arrangements are common.

What sections should be included in a Master Supply Agreement?

1. Parties: Identification of the supplier and buyer, including their complete legal names, registration numbers, and addresses

2. Background: Context of the agreement, relationship between parties, and general intent of the supply arrangement

3. Definitions and Interpretation: Comprehensive definitions of terms used throughout the agreement and rules of interpretation

4. Scope of Agreement: Framework for the supply relationship, including exclusivity provisions if applicable

5. Ordering Process: Procedures for placing, accepting, and modifying purchase orders

6. Delivery and Acceptance: Terms regarding delivery, inspection, acceptance, and rejection of goods

7. Price and Payment: Pricing structure, payment terms, invoicing requirements, and currency provisions

8. Quality Requirements: Quality standards, specifications, and compliance requirements for supplied goods

9. Warranties: Supplier warranties regarding goods, services, and general performance obligations

10. Title and Risk: Transfer of ownership and risk in goods

11. Intellectual Property: IP rights, licenses, and protections

12. Confidentiality: Protection and handling of confidential information

13. Liability and Indemnification: Allocation of risks, limitations of liability, and indemnification obligations

14. Term and Termination: Duration of agreement, renewal provisions, and termination rights

15. Force Majeure: Events excusing performance and related procedures

16. Dispute Resolution: Process for resolving disputes, including jurisdiction and governing law

17. General Provisions: Standard boilerplate clauses including notices, assignments, and amendments

18. Language Requirements: Compliance with Indonesian law requiring Bahasa Indonesia version and governing language

What sections are optional to include in a Master Supply Agreement?

1. Vendor Managed Inventory: Used when supplier manages inventory at buyer's location

2. Consignment Arrangements: For agreements involving consignment stock arrangements

3. Service Level Requirements: When specific performance metrics and service levels are required

4. Environmental Compliance: For industries with specific environmental requirements or sustainability goals

5. Insurance Requirements: Detailed insurance obligations beyond standard coverage

6. Import/Export Compliance: For international supply arrangements requiring specific trade compliance

7. Local Content Requirements: When Indonesian local content rules apply to the supply arrangement

8. Technology Transfer: For arrangements involving technology or know-how transfer

9. Anti-Corruption Compliance: Enhanced compliance requirements for high-risk industries or government-related supply

10. Bank Guarantee Requirements: When performance or payment guarantees are required

What schedules should be included in a Master Supply Agreement?

1. Schedule 1 - Products and Pricing: Detailed list of products, specifications, and pricing structure

2. Schedule 2 - Service Levels and KPIs: Detailed performance metrics and measurement criteria

3. Schedule 3 - Technical Specifications: Detailed technical requirements and standards for products

4. Schedule 4 - Quality Requirements: Specific quality standards, testing procedures, and acceptance criteria

5. Schedule 5 - Ordering Procedures: Detailed procedures for order placement, modification, and cancellation

6. Schedule 6 - Delivery Requirements: Specific delivery terms, locations, and procedures

7. Schedule 7 - Contact Details: Key contact persons and escalation matrix

8. Appendix A - Form of Purchase Order: Standard form for purchase orders

9. Appendix B - Form of Bank Guarantee: Standard format for any required bank guarantees

10. Appendix C - Compliance Certificates: Required regulatory or quality compliance certificates

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

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions









































Clauses









































Relevant Industries

Manufacturing

Retail

Mining and Resources

Technology

Agriculture

Consumer Goods

Industrial Equipment

Automotive

Electronics

Pharmaceuticals

Food and Beverage

Telecommunications

Energy

Chemical Industry

Construction

Relevant Teams

Legal

Procurement

Supply Chain

Operations

Finance

Commercial

Compliance

Quality Assurance

Risk Management

Vendor Management

Business Development

Contract Administration

Relevant Roles

Procurement Manager

Supply Chain Director

Legal Counsel

Commercial Director

Operations Manager

Sourcing Manager

Contract Administrator

Chief Financial Officer

Purchasing Director

Quality Assurance Manager

Compliance Officer

Supply Chain Manager

Business Development Manager

Category Manager

Vendor Management Specialist

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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