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Asset Loan Agreement Template for Indonesia

This document is a comprehensive Asset Loan Agreement governed by Indonesian law, designed to facilitate the temporary transfer of assets between parties while ensuring legal compliance with Indonesian Civil Code and related regulations. It establishes the terms and conditions for the loan of assets, including detailed provisions for asset usage, maintenance responsibilities, insurance requirements, and return conditions. The agreement incorporates specific Indonesian legal requirements, including relevant provisions from Law No. 42 of 1999 on Fiduciary Security where applicable, and addresses risk allocation, default scenarios, and dispute resolution mechanisms within the Indonesian legal framework.

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What is a Asset Loan Agreement?

The Asset Loan Agreement serves as a crucial legal instrument in Indonesian business operations where temporary asset transfer is required without transferring ownership. This document is essential when one party needs to use another party's assets for a specified period while ensuring proper protection for both the lender and borrower. The agreement must comply with Indonesian Civil Code (KUHPerdata) requirements and may need to address fiduciary security aspects under Law No. 42 of 1999. It is particularly useful in business scenarios involving equipment sharing, temporary asset deployment, or collaborative projects where asset sharing is necessary. The document includes comprehensive provisions for asset maintenance, insurance, risk allocation, and return conditions, while ensuring alignment with Indonesian regulatory requirements and business practices.

What sections should be included in a Asset Loan Agreement?

1. Parties: Identification of the lender and borrower with complete legal details

2. Background: Context of the loan agreement and relationship between parties

3. Definitions: Definitions of key terms used throughout the agreement

4. Asset Details: Comprehensive description of the asset(s) being loaned

5. Loan Terms: Principal terms including duration, return conditions, and purpose of loan

6. Obligations of the Borrower: Borrower's responsibilities regarding asset care, maintenance, and use

7. Obligations of the Lender: Lender's responsibilities and warranties regarding the asset

8. Risk and Insurance: Allocation of risk and insurance requirements

9. Representations and Warranties: Standard representations and warranties from both parties

10. Return of Asset: Conditions and process for returning the asset

11. Events of Default: Circumstances constituting default and consequences

12. Termination: Conditions and process for early termination

13. Governing Law and Jurisdiction: Specification of Indonesian law and relevant jurisdiction

14. Notices: Process and requirements for formal communications

15. Execution: Signature blocks and execution requirements

What sections are optional to include in a Asset Loan Agreement?

1. Security Deposit: Terms for any security deposit required, used when additional financial security is needed

2. Subloan and Assignment: Provisions regarding subloan rights and assignment, included when these rights need to be explicitly addressed

3. Force Majeure: Provisions for unforeseen circumstances, particularly relevant for long-term loans

4. Maintenance and Repairs: Detailed maintenance obligations, included for complex or high-value assets

5. Intellectual Property: IP provisions when the asset involves intellectual property rights

6. Confidentiality: Confidentiality obligations, included for sensitive or proprietary assets

7. Registration Requirements: Specific registration obligations under Indonesian law, included for assets requiring formal registration

What schedules should be included in a Asset Loan Agreement?

1. Asset Description Schedule: Detailed technical specifications and condition report of the asset

2. Insurance Requirements: Specific insurance requirements and coverage details

3. Maintenance Schedule: Detailed maintenance requirements and schedules

4. Permitted Use Guidelines: Specific guidelines and restrictions for asset usage

5. Return Condition Requirements: Detailed specifications for acceptable return condition

6. Required Licenses and Permits: List of necessary licenses and permits for asset use

7. Authorized Users: List of persons authorized to use or handle the asset

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Indonesia

Document Type

Financing Agreement

Cost

Free to use

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