Document background
A Head of Terms Agreement is a crucial preliminary document used in Indonesian business transactions to establish the fundamental terms and conditions of a proposed deal before proceeding with detailed negotiations and definitive agreements. This document type is particularly relevant in complex commercial transactions, mergers and acquisitions, joint ventures, and significant business partnerships within the Indonesian legal framework. While primarily non-binding, it typically contains certain binding provisions such as confidentiality and exclusivity clauses. The agreement must comply with Indonesian civil law principles, particularly the Indonesian Civil Code (KUHPerdata), and serves as a roadmap for further negotiations and due diligence processes. It's especially important in cross-border transactions where foreign investment regulations and local business practices need to be carefully considered.
