The Contract Termination Agreement is a crucial document used when parties mutually agree to end their contractual relationship before its natural expiration or to formally document the end of a contract. This agreement, governed by Indonesian law, particularly the Civil Code (KUHPerdata), serves to protect all parties' interests by clearly defining the termination terms, outstanding obligations, and post-termination responsibilities. It is essential for business relationships in Indonesia, whether between domestic entities or involving international parties, and must comply with local language requirements when involving Indonesian entities. The document typically includes provisions for final settlements, mutual releases, confidentiality obligations, and the return of any properties or documents, ensuring a clean break while maintaining legal compliance and minimizing the risk of future disputes.
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1. Parties: Identification of all parties to the agreement, including their full legal names, addresses, and company registration details if applicable
2. Background: Brief description of the original contract, its purpose, effective date, and the parties' mutual decision to terminate
3. Definitions: Key terms used throughout the agreement, including reference to the Original Contract and Termination Date
4. Termination: Clear statement of termination, specifying the effective termination date and mutual agreement of the parties
5. Outstanding Obligations: Details of any remaining obligations, payments, or deliverables that must be fulfilled before or after termination
6. Mutual Release: Mutual release of parties from future obligations under the original contract, subject to any surviving provisions
7. Settlement of Accounts: Agreement on final payment amounts, payment terms, and timeline for settling any outstanding accounts
8. Return of Property: Requirements for returning any physical or intellectual property, documents, or confidential information
9. Confidentiality: Ongoing obligations regarding confidentiality and non-disclosure of sensitive information
10. Governing Law: Specification of Indonesian law as the governing law and jurisdiction for any disputes
11. Execution: Signature blocks and execution requirements, including the requirement for Indonesian language version if applicable
1. Survival Provisions: List of provisions from the original contract that will survive termination - include if there are specific obligations that should continue
2. Non-Disparagement: Mutual agreement not to make negative statements about each other - include for high-profile or sensitive terminations
3. Employee Matters: Provisions dealing with employee transfers or treatment - include if termination affects employment relationships
4. Tax Provisions: Specific arrangements regarding tax obligations - include if there are significant tax implications
5. Dispute Resolution: Detailed dispute resolution procedures - include if standard governing law provisions are insufficient
6. Public Announcements: Guidelines for making public statements about the termination - include for listed companies or public interest matters
7. Transition Assistance: Details of any transition support to be provided - include if complex handover is required
1. Schedule 1 - Outstanding Payments: Detailed list of all outstanding payments, including amounts, due dates, and payment methods
2. Schedule 2 - Property Register: Inventory of all physical and intellectual property to be returned or transferred
3. Schedule 3 - Completion Checklist: List of all actions required to complete the termination process
4. Appendix A - Original Contract: Copy of the original contract being terminated
5. Appendix B - Settlement Calculation: Detailed calculations of any settlement amounts, including any adjustments or deductions
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