Document background
The Advance Payment Contract is a crucial document used in Indonesian business transactions where substantial upfront payments are required before the delivery of goods or services. This type of contract is commonly utilized in large-scale procurement, construction projects, manufacturing orders, or international trade transactions where suppliers require initial funding to commence work or production. The document must comply with Indonesian legal requirements, including the Civil Code (KUHPerdata) and relevant Bank Indonesia regulations. It typically includes detailed provisions for payment security (such as bank guarantees), specific delivery milestones, risk allocation, and remedy mechanisms. The contract is particularly important in protecting both parties' interests, ensuring clear documentation of payment terms, delivery obligations, and establishing a legal framework for the transaction under Indonesian jurisdiction.
