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Software Purchase Agreement
I need a software purchase agreement for acquiring a new project management software for our company, ensuring it includes terms for licensing, support, and maintenance, with a focus on data security compliance and a flexible payment plan over 12 months.
What is a Software Purchase Agreement?
A Software Purchase Agreement sets out the legal terms when you buy software licenses or programs in Indonesia. It's the binding contract between the software vendor and your organization that spells out exactly what you're buying, how much it costs, and how you can use it legally under Indonesian copyright law.
These agreements protect both parties by clearly defining payment terms, installation requirements, maintenance support, and usage rights. They're especially important given Indonesia's strict regulations on software licensing and intellectual property protection under Law No. 28 of 2014. Smart businesses use them to avoid legal issues and ensure they get the software features and support they need.
When should you use a Software Purchase Agreement?
Use a Software Purchase Agreement when acquiring any business software in Indonesia, especially for enterprise solutions worth over Rp 100 million. This document becomes essential before paying for accounting systems, customer management tools, or industry-specific applications that your company will rely on long-term.
The agreement proves particularly valuable when dealing with international vendors, custom development work, or software that handles sensitive data. Indonesian law requires clear documentation of software licenses and usage rights - having this agreement in place helps you meet compliance requirements under Law No. 28/2014 while protecting your investment and ensuring proper support terms.
What are the different types of Software Purchase Agreement?
- Standard License: Basic software purchase agreements covering off-the-shelf programs with standard terms for small-medium enterprises in Indonesia
- Enterprise Edition: Comprehensive agreements for large-scale corporate software deployments with custom support terms and SLAs
- Custom Development: Specialized contracts for bespoke software development projects, including IP rights and milestone payments
- SaaS Purchase: Cloud-based software agreements addressing data privacy under Indonesian regulations and ongoing subscription terms
- Multi-User License: Agreements for organization-wide software deployment with specific user count limitations and network access rights
Who should typically use a Software Purchase Agreement?
- Software Vendors: Create and customize the agreements to protect their intellectual property rights and outline payment terms when selling software in Indonesia
- Corporate Legal Teams: Review and negotiate Software Purchase Agreements to ensure compliance with Indonesian regulations and company interests
- IT Managers: Specify technical requirements, user counts, and implementation details while coordinating with vendors
- Finance Directors: Evaluate payment structures, maintenance fees, and total cost of ownership outlined in the agreement
- Compliance Officers: Monitor adherence to Indonesian data protection laws and software licensing requirements
How do you write a Software Purchase Agreement?
- Software Details: List exact features, modules, user counts, and technical specifications needed for your business
- Vendor Information: Gather the software provider's complete legal entity details and Indonesian business registration
- Usage Terms: Define where, how, and by whom the software will be used within your organization
- Implementation Plan: Document installation requirements, timeline, and support expectations
- Budget Parameters: Calculate total costs including licenses, maintenance fees, and potential customization
- Compliance Check: Review Indonesian data protection requirements and software licensing regulations
What should be included in a Software Purchase Agreement?
- Party Details: Complete legal names and addresses of software vendor and purchaser under Indonesian law
- License Terms: Specific rights granted, usage limitations, and permitted modifications under Law No. 28/2014
- Payment Details: Clear pricing structure, payment schedule, and currency specifications
- Delivery Terms: Installation timeline, acceptance testing procedures, and implementation milestones
- Data Protection: Compliance with Indonesian Personal Data Protection regulations and security measures
- Dispute Resolution: Choice of Indonesian law, jurisdiction, and agreed arbitration procedures
- Termination Rights: Conditions for contract ending, data handling, and post-termination obligations
What's the difference between a Software Purchase Agreement and a Software Development Agreement?
A Software Purchase Agreement differs significantly from a Software Development Agreement in several key aspects. While both deal with software acquisition, their core purposes and obligations vary substantially under Indonesian law.
- Product Status: Software Purchase Agreements cover existing, ready-to-use software products, while Development Agreements involve creating custom software from scratch
- Timeline Structure: Purchase agreements focus on immediate delivery and implementation, whereas development agreements include multiple project phases and milestones
- IP Rights: Purchase agreements typically transfer license rights only, while development agreements often include specific provisions about custom code ownership
- Payment Terms: Purchase agreements usually involve fixed one-time or subscription payments, while development agreements feature stage-based payments tied to deliverables
- Support Scope: Purchase agreements emphasize standard maintenance terms, while development agreements focus on testing, revisions, and acceptance criteria
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