A Distributorship Contract is essential when a company (Principal) wishes to appoint another entity (Distributor) to distribute its products within specified territories in Indonesia. This agreement is particularly important given Indonesia's complex regulatory framework for distribution relationships, including compliance with Law No. 7 of 2014 on Trade and various Ministry of Trade regulations. The document outlines all crucial aspects of the distribution relationship, including appointment terms, territorial rights, minimum purchase requirements, pricing structures, and both parties' obligations. It should be used when establishing new distribution relationships or formalizing existing ones in Indonesia, ensuring compliance with local laws while protecting both parties' commercial interests. The agreement becomes especially critical when dealing with exclusive distribution rights, regulated products, or when significant investment is required from either party.
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1. Parties: Identification of the Principal/Supplier and the Distributor, including their complete legal details as required under Indonesian law
2. Background: Context of the agreement, business relationship, and intention of the parties
3. Definitions: Detailed definitions of key terms used throughout the agreement, including specific Indonesian legal and commercial terms
4. Appointment and Territory: Terms of distributor appointment and defined geographic territory for distribution rights
5. Rights and Obligations of the Distributor: Comprehensive listing of distributor's duties, responsibilities, and rights
6. Rights and Obligations of the Principal: Detailed obligations of the principal including supply commitments and support
7. Products and Pricing: Description of products covered and pricing mechanisms
8. Orders and Delivery: Procedures for ordering, delivery terms, and logistics arrangements
9. Payment Terms: Payment conditions, currency, and financial arrangements
10. Minimum Purchase Requirements: Specified minimum purchase quotas and consequences of non-achievement
11. Intellectual Property Rights: Protection and usage rights of trademarks, patents, and other IP
12. Confidentiality: Provisions for protecting confidential information
13. Term and Termination: Duration of agreement and termination provisions
14. Post-Termination: Rights and obligations after contract termination
15. Governing Law and Dispute Resolution: Specification of Indonesian law as governing law and dispute resolution mechanisms
1. Marketing and Promotion: Specific requirements for marketing activities and cost sharing - include if distributor has marketing responsibilities
2. Training and Support: Details of training and technical support - include if complex products or services are involved
3. Non-Competition: Non-compete provisions - include if exclusive distribution arrangement
4. Insurance: Insurance requirements - include if high-value or high-risk products
5. Compliance with Anti-Corruption Laws: Anti-corruption provisions - include if international distribution or government sales involved
6. Force Majeure: Force majeure provisions - include if long-term contract or high-value relationship
7. Product Warranties: Warranty terms - include if products carry warranties
8. After-Sales Service: After-sales service obligations - include if products require maintenance or support
9. Sub-distributors: Rights and conditions for appointing sub-distributors - include if sub-distribution is permitted
1. Schedule 1 - Products: Detailed list of products covered under the agreement
2. Schedule 2 - Territory: Detailed description of geographic territory and any exclusions
3. Schedule 3 - Prices and Payment Terms: Detailed pricing structure, discounts, and payment conditions
4. Schedule 4 - Minimum Purchase Requirements: Specific quotas and targets with timeline
5. Schedule 5 - Technical Specifications: Product specifications and technical requirements
6. Schedule 6 - Trademark Usage Guidelines: Guidelines for use of principal's trademarks and branding
7. Schedule 7 - Service Level Requirements: Performance metrics and service level expectations
8. Schedule 8 - Reporting Requirements: Templates and schedules for required reports
9. Appendix A - Required Licenses and Permits: List of regulatory requirements and necessary permits
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