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Commercial Commission Agreement Template for Indonesia

A Commercial Commission Agreement governed by Indonesian law establishes the legal framework for a commission-based business relationship between a principal and an agent. This document outlines the terms under which the agent will promote and sell products or services on behalf of the principal in exchange for commission payments. It includes detailed provisions on commission structures, payment terms, territorial rights, performance expectations, and compliance with Indonesian regulations, particularly adhering to the Indonesian Civil Code (KUHPerdata) and relevant commercial agency laws. The agreement ensures clear definition of roles, responsibilities, and risk allocation while maintaining compliance with local legal requirements.

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What is a Commercial Commission Agreement?

The Commercial Commission Agreement is a crucial document for businesses operating in Indonesia who wish to engage agents or representatives to sell their products or services on a commission basis. This agreement type is commonly used when a company (the principal) wants to expand its market presence through third-party agents without establishing direct employment relationships. The document must comply with Indonesian legal requirements, including the Indonesian Civil Code (KUHPerdata), commercial agency regulations, and relevant trade laws. It typically includes comprehensive details about commission calculations, payment terms, territorial rights, performance metrics, and reporting requirements. The agreement is particularly important in Indonesia's business landscape where commercial agency relationships are common and require careful structuring to ensure legal compliance while protecting both parties' interests.

What sections should be included in a Commercial Commission Agreement?

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

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

3. Definitions: Key terms used throughout the agreement, including specific commercial and technical terms

4. Appointment and Scope: Terms of appointment, territory coverage, and scope of authority granted to the Commission Agent

5. Rights and Obligations: Detailed responsibilities of both parties, including reporting requirements and performance standards

6. Commission Structure: Definition of commission rates, calculation methods, and qualifying transactions

7. Payment Terms: Commission payment schedule, currency, payment methods, and tax considerations

8. Term and Termination: Duration of the agreement, renewal provisions, and grounds for termination

9. Confidentiality: Protection of confidential information and trade secrets

10. Non-Competition: Restrictions on competing activities during and after the agreement

11. Compliance: Obligations to comply with Indonesian laws and regulations

12. Governing Law: Specification of Indonesian law as governing law and jurisdiction

13. Dispute Resolution: Process for resolving disputes, including choice of forum and arbitration provisions

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

1. Intellectual Property: Protection and usage rights of trademarks, patents, and other IP when the agent will be handling IP-sensitive products or services

2. Insurance: Requirements for insurance coverage when the agent handles high-value transactions or specific risks

3. Force Majeure: Provisions for unforeseen circumstances affecting performance, particularly relevant in volatile markets

4. Assignment: Rights and restrictions regarding transfer of rights under the agreement, useful for larger commercial relationships

5. Training and Support: Details of training and support provided by the principal, relevant for complex products or services

6. Marketing and Promotion: Guidelines for marketing activities when the agent is involved in promotion

7. Minimum Performance Requirements: Specific performance targets and consequences, useful for significant commercial relationships

8. Data Protection: Specific provisions for handling customer data when personal data processing is involved

What schedules should be included in a Commercial Commission Agreement?

1. Commission Rates Schedule: Detailed breakdown of commission rates for different products, services, or customer categories

2. Territory Description: Detailed description of geographical areas or market segments covered by the agreement

3. Products and Services: List of products or services covered under the commission arrangement

4. Performance Metrics: Specific KPIs and measurement criteria for agent performance

5. Reporting Template: Standard format for regular activity and sales reports

6. Documentation Requirements: List of required documents for commission claims and verification

7. Compliance Procedures: Detailed procedures for ensuring compliance with Indonesian regulations

8. Contact Details: List of key contacts and escalation matrix for both parties

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

Cost

Free to use

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