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The Land Option Agreement is a crucial document in Indonesian real estate transactions, providing a structured framework for securing future land acquisition rights while managing risk and compliance requirements. It is commonly used when a potential purchaser needs time to conduct due diligence, obtain financing, or secure necessary permits before committing to a full purchase. The agreement must comply with Indonesia's Basic Agrarian Law and various regulations governing land rights, foreign ownership restrictions, and spatial planning requirements. It typically includes detailed provisions for option period, exercise price, conditions precedent, and due diligence rights, while accounting for specific Indonesian legal requirements such as land use certificates and local authority approvals.

1. Parties: Identification of the Option Grantor (landowner) and Option Holder, including complete legal names, addresses, and registration details if companies

2. Background: Context of the agreement, brief description of the property, and parties' intentions

3. Definitions and Interpretation: Definitions of key terms used in the agreement and rules of interpretation

4. Grant of Option: Core terms of the option grant, including exclusivity and nature of the right

5. Option Period: Duration of the option, including commencement and expiration dates

6. Option Fee: Amount, payment terms, and status of the option fee (refundable/non-refundable)

7. Exercise of Option: Mechanism and procedure for exercising the option, including notice requirements

8. Purchase Price: Agreed purchase price for the land when option is exercised, including any adjustment mechanisms

9. Property Details and Title: Detailed description of the land and confirmation of ownership/title

10. Grantor's Obligations: Obligations of the landowner during the option period

11. Due Diligence: Rights and process for conducting due diligence investigations

12. Conditions Precedent: Conditions that must be satisfied before the option can be exercised

13. Representations and Warranties: Statements of fact and assurances from both parties

14. Termination: Circumstances under which the agreement can be terminated and consequences

15. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and jurisdiction for disputes

16. General Provisions: Standard legal provisions including notices, amendments, and entire agreement