Document background
The Letter of Intent for Business Relationship is a crucial preliminary document in Indonesian business practice, commonly used when parties wish to formally express their intention to enter into a business relationship while maintaining flexibility in their negotiations. It serves as a stepping stone towards more detailed agreements, typically used in scenarios ranging from joint ventures to strategic partnerships. While governed by Indonesian law and following principles established in the Indonesian Civil Code (KUHPerdata), this document balances the need for formal documentation with maintaining room for negotiation. The LOI typically includes essential elements such as the scope of intended cooperation, basic terms, timelines, and any binding provisions (such as confidentiality), while clearly stating its generally non-binding nature. It's particularly relevant in Indonesia's business environment where formal preliminary agreements are valued as demonstrations of serious intent and good faith in business negotiations.
