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A Sales Commission Agreement is essential for businesses operating in Indonesia that engage independent sales representatives or agents to sell their products or services. This document is particularly important in the Indonesian market where companies often rely on commission-based sales structures to expand their market presence. The agreement must comply with Indonesian law, including the Civil Code (KUHPerdata), Labor Law, and trade regulations, while clearly defining the relationship between principal and agent. It typically includes detailed provisions on commission rates, payment terms, sales territories, performance targets, and reporting requirements. This type of agreement is commonly used when companies want to incentivize sales performance without creating direct employment relationships, while ensuring legal compliance and protection for both parties under Indonesian jurisdiction.

1. Parties: Identifies and defines the Principal (company) and Agent (sales representative), including their full legal names, registration numbers, and addresses

2. Background: Establishes the context of the agreement, including the Principal's business nature and desire to engage the Agent for sales services

3. Definitions: Defines key terms used throughout the agreement, including 'Products', 'Territory', 'Commission', 'Sales', 'Net Sales', etc.

4. Appointment and Territory: Specifies the appointment of the Agent, whether exclusive or non-exclusive, and defines the geographical territory for sales activities

5. Term and Termination: Specifies the duration of the agreement, renewal terms, and conditions for termination by either party

6. Duties and Responsibilities: Details the Agent's obligations, sales targets, reporting requirements, and conduct standards

7. Commission Structure: Specifies commission rates, calculation methods, and payment terms

8. Payment Terms: Details payment frequency, method, currency, and handling of expenses

9. Intellectual Property: Governs the use of Principal's trademarks, logos, and marketing materials

10. Confidentiality: Protects confidential information and trade secrets

11. Non-Competition: Restricts Agent from representing competing products/services

12. Governing Law and Dispute Resolution: Specifies Indonesian law as governing law and outlines dispute resolution procedures

13. General Provisions: Includes standard clauses like force majeure, notices, amendment procedures, and severability