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Commercial Agency Agreement for Indonesia

Commercial Agency Agreement Template for Indonesia

A comprehensive legal agreement governed by Indonesian law that establishes and regulates the relationship between a principal company and its commercial agent. The document defines the terms under which the agent will represent the principal in specified territories within Indonesia, including the scope of authority, commission structure, and operational requirements. It incorporates provisions compliant with Indonesian Commercial Code and relevant regulations, addressing key aspects such as territory rights, performance expectations, reporting requirements, and termination conditions. The agreement ensures proper registration with relevant Indonesian authorities and includes necessary safeguards for both parties while maintaining compliance with local agency and commercial laws.

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What is a Commercial Agency Agreement?

The Commercial Agency Agreement is a crucial document for businesses seeking to establish a presence in the Indonesian market through authorized representatives. This agreement is particularly relevant when a company (principal) wishes to engage a local agent to promote, sell, or distribute their products or services within specified Indonesian territories without establishing their own direct operations. The document comprehensively addresses all aspects of the agency relationship as required under Indonesian law, including the agent's authority, territory rights, commission structures, and compliance requirements. It incorporates provisions from the Indonesian Commercial Code (Kitab Undang-Undang Hukum Dagang) and relevant regulations such as Government Regulation No. 42 of 2007. The agreement is essential for protecting both parties' interests while ensuring compliance with local agency laws, trade regulations, and registration requirements.

What sections should be included in a Commercial Agency Agreement?

1. Parties: Identification of the Principal and Agent, including complete legal names, registration numbers, and addresses

2. Background: Context of the agreement, business objectives, and relationship between the parties

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

4. Appointment and Scope: Formal appointment of agent and detailed scope of authority

5. Territory: Geographic area where the agent is authorized to act

6. Duration and Term: Period of the agreement, including commencement date and renewal provisions

7. Agent's Rights and Obligations: Detailed responsibilities, duties, and rights of the agent

8. Principal's Rights and Obligations: Detailed responsibilities, duties, and rights of the principal

9. Commission Structure: Details of commission rates, calculation methods, and payment terms

10. Reporting and Accounting: Requirements for financial reporting, record-keeping, and accounting procedures

11. Intellectual Property Rights: Usage rights and protection of trademarks, patents, and other IP

12. Confidentiality: Protection of confidential information and trade secrets

13. Non-Competition: Restrictions on competitive activities during and after the agreement

14. Termination: Grounds for termination, notice requirements, and consequences

15. Post-Termination: Obligations and rights of parties after agreement termination

16. Governing Law and Dispute Resolution: Choice of Indonesian law and dispute resolution mechanisms

17. General Provisions: Standard clauses including notices, amendments, and severability

What sections are optional to include in a Commercial Agency Agreement?

1. Performance Targets: Specific sales or performance targets, used when the principal wants to set measurable objectives

2. Marketing and Promotion: Specific requirements for marketing activities, included when agent has marketing responsibilities

3. Training and Support: Details of training and support provided by principal, included for complex products/services

4. Sub-Agents: Rules regarding appointment of sub-agents, included when sub-agents may be needed

5. Insurance: Insurance requirements, included when specific coverage is needed for high-risk activities

6. Bank Guarantee: Requirements for bank guarantees, included when financial security is needed

7. Compliance with Anti-Corruption Laws: Specific anti-corruption provisions, included for international agreements

8. Force Majeure: Provisions for unforeseen circumstances, included when specific risk allocation is needed

9. Data Protection: Specific data protection requirements, included when personal data processing is involved

What schedules should be included in a Commercial Agency Agreement?

1. Schedule 1 - Products/Services: Detailed list of products or services covered by the agency agreement

2. Schedule 2 - Commission Rates: Detailed commission structure, rates, and calculation methods

3. Schedule 3 - Territory Map: Detailed map or description of the authorized territory

4. Schedule 4 - Performance Targets: Specific sales targets and performance metrics

5. Schedule 5 - Reporting Ƶ: Standard forms for regular reporting requirements

6. Schedule 6 - Standard Operating Procedures: Detailed procedures for day-to-day operations

7. Appendix A - Power of Attorney: Formal power of attorney document if required under Indonesian law

8. Appendix B - Brand Guidelines: Guidelines for use of principal's branding and trademarks

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Indonesia

Publisher

Ƶ

Document Type

Agency Agreement

Cost

Free to use

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