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Pre Contract Agreement for Indonesia

Pre Contract Agreement Template for Indonesia

A comprehensive preliminary agreement governed by Indonesian law that establishes the framework for negotiations and due diligence between parties considering a significant business transaction. This document outlines confidentiality obligations, negotiation parameters, and preliminary terms while clearly distinguishing between binding and non-binding provisions. It incorporates key requirements under Indonesian Civil Code (KUHPerdata) and relevant commercial regulations, providing a structured approach to pre-contractual relationships while protecting both parties' interests during the negotiation phase.

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What is a Pre Contract Agreement?

The Pre Contract Agreement serves as a crucial document in Indonesian business transactions, establishing the groundwork for substantial commercial relationships or investments. It is particularly relevant when parties need to formalize their intention to negotiate while maintaining confidentiality and setting clear parameters for due diligence. This document type is essential in Indonesia's business environment, where formal preliminary agreements are often required before proceeding with detailed negotiations, especially in regulated industries or for significant transactions. It combines elements of Indonesian civil law requirements with practical business needs, including provisions for confidentiality, exclusivity periods, and cost allocation during the negotiation phase. The agreement typically precedes more detailed transaction documents such as share purchase agreements, joint venture agreements, or investment agreements.

What sections should be included in a Pre Contract Agreement?

1. Parties: Full legal names and details of all parties entering into the pre-contract agreement

2. Background: Context of the proposed transaction or relationship, including the parties' intentions and objectives

3. Definitions: Key terms used throughout the agreement

4. Scope of Proposed Transaction: Overview of the intended final transaction or relationship being contemplated

5. Negotiation Process: Framework for how negotiations will be conducted, including timelines and key milestones

6. Confidentiality: Binding obligations regarding the treatment of confidential information exchanged during negotiations

7. Due Diligence: Process and parameters for conducting due diligence investigations

8. Binding and Non-Binding Provisions: Clear distinction between which provisions are legally binding and which are not

9. Costs and Expenses: How costs associated with negotiations and due diligence will be borne

10. Term and Termination: Duration of the pre-contract agreement and circumstances for termination

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

What sections are optional to include in a Pre Contract Agreement?

1. Exclusivity: Used when parties agree not to negotiate with other parties during a specified period

2. Break Fee: Include when parties want to specify compensation if one party terminates negotiations

3. Specific Conditions Precedent: When certain conditions must be met before proceeding with final agreement

4. Intellectual Property Rights: Include when negotiations involve sharing of IP or creation of new IP

5. Public Announcements: Include for high-profile transactions where public communications need to be controlled

6. Force Majeure: Include when negotiation period is long and parties want protection from unforeseen events

7. Representatives and Warranties: Include when parties need to make preliminary representations about their authority or status

What schedules should be included in a Pre Contract Agreement?

1. Schedule 1 - Timeline: Detailed timeline for negotiations, due diligence, and target completion dates

2. Schedule 2 - Required Information: List of documents and information required for due diligence

3. Schedule 3 - Authorized Representatives: List of authorized representatives from each party for negotiations

4. Appendix A - Term Sheet: High-level summary of key commercial terms being considered for the final agreement

5. Appendix B - Due Diligence Checklist: Detailed checklist of items to be reviewed during due diligence

6. Appendix C - Confidentiality Requirements: Detailed procedures for handling confidential information

Authors

Alex Denne

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

Jurisdiction

Indonesia

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions



























Clauses





























Relevant Industries

Manufacturing

Technology

Real Estate

Mining and Resources

Financial Services

Infrastructure Development

Telecommunications

Energy

Healthcare

Retail and Consumer Goods

Agriculture

Transportation and Logistics

Education Services

Construction

Hospitality and Tourism

Relevant Teams

Legal

Corporate Affairs

Business Development

Finance

Compliance

Risk Management

Strategy

Commercial Operations

Corporate Secretariat

Investment

Executive Leadership

Project Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

Legal Counsel

Corporate Lawyer

Business Development Manager

Investment Manager

Managing Director

Commercial Director

Strategy Director

Company Secretary

Compliance Officer

Risk Manager

Project Manager

Finance Director

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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