A Raw Material Supply Agreement is essential for businesses operating in Indonesia that require consistent supply of materials for their operations. This document is particularly crucial in the Indonesian context due to specific regulatory requirements under Law No. 7 of 2014 on Trade and related regulations. The agreement typically covers critical aspects such as supply commitments, quality standards, pricing mechanisms, and compliance with local regulations. It's commonly used when establishing long-term supply relationships, ensuring security of supply, and managing risk in supply chains. The document must comply with Indonesian Civil Code requirements for contract formation while addressing specific industry standards and environmental regulations. This type of agreement is particularly important given Indonesia's position as both a major producer and consumer of raw materials across various industries.
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1. Parties: Identification of supplier and buyer, including complete legal names, registration numbers, and addresses
2. Background: Context of the agreement, nature of the parties' businesses, and their intentions regarding the supply relationship
3. Definitions: Detailed definitions of key terms including Raw Materials, Specifications, Delivery Terms, and Quality Standards
4. Supply Obligations: Core obligations including supply commitments, minimum/maximum quantities, and exclusivity provisions if any
5. Quality Requirements: Detailed quality specifications, testing procedures, and compliance with Indonesian standards
6. Ordering and Delivery: Process for placing orders, lead times, delivery terms, and logistics arrangements
7. Price and Payment: Pricing mechanism, payment terms, currency, and invoicing requirements
8. Title and Risk: Transfer of ownership and risk in the goods
9. Warranties and Quality Assurance: Supplier warranties regarding raw material quality and compliance with specifications
10. Compliance with Laws: Obligations to comply with applicable Indonesian laws and regulations
11. Force Majeure: Events constituting force majeure and consequences
12. Term and Termination: Duration of agreement and grounds for termination
13. Confidentiality: Protection of confidential information exchanged during the relationship
14. Dispute Resolution: Process for resolving disputes under Indonesian law
15. General Provisions: Standard boilerplate clauses including notices, amendments, and governing law
1. Import/Export Provisions: Required if raw materials are imported or exported, covering customs, duties, and trade compliance
2. Sustainability Requirements: Include when dealing with environmentally sensitive materials or if required by buyer's policies
3. Storage and Handling: Necessary for materials requiring special storage conditions or handling procedures
4. Insurance Requirements: Detailed insurance obligations beyond standard coverage
5. Security of Supply: Include for critical raw materials or sole supplier arrangements
6. Price Adjustment Mechanism: For long-term agreements or volatile market conditions
7. Quality Management System: Detailed quality management requirements for complex or regulated materials
8. Anti-Corruption Compliance: Enhanced compliance provisions for high-risk jurisdictions or materials
1. Schedule 1 - Raw Material Specifications: Detailed technical specifications of the raw materials
2. Schedule 2 - Pricing Schedule: Detailed pricing information, including any volume-based discounts
3. Schedule 3 - Quality Testing Procedures: Specific procedures for quality testing and acceptance
4. Schedule 4 - Delivery Schedule: Agreed delivery timeframes and locations
5. Schedule 5 - Key Performance Indicators: Performance metrics and measurement criteria
6. Appendix A - Form of Purchase Order: Standard form for placing orders
7. Appendix B - Technical Requirements: Detailed technical requirements and standards
8. Appendix C - Compliance Certificates: Required certifications and compliance documents
Relevant legal definitions
Clauses
Relevant Industries
Manufacturing
Mining
Agriculture
Chemical Industry
Textile Industry
Construction
Food and Beverage
Pharmaceuticals
Automotive
Electronics
Paper and Pulp
Metal Processing
Energy
Industrial Materials
Relevant Teams
Legal
Procurement
Supply Chain
Operations
Quality Control
Compliance
Finance
Manufacturing
Risk Management
Commercial
Logistics
Relevant Roles
Procurement Manager
Supply Chain Director
Chief Operating Officer
Production Manager
Quality Control Manager
Legal Counsel
Contract Administrator
Operations Director
Purchasing Officer
Compliance Officer
Supply Chain Analyst
Manufacturing Manager
Risk Manager
Commercial Director
Logistics Manager
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