Distributor Agreement Summary

Distributor Agreement in Indonesia – Distributor Agreement :  Contracts between a distributor and manufacturer. They allow the distributor to sell, market, and profit from the sales of a manufacturer’s or wholesaler’s product in bulk. A distribution agreement typically uses the terms and conditions that address territories, exclusivity rights, reporting requirements, and more.

Basic points of a sole Distributor Agreement in Indonesia :

– ARTICLE 1 : GENERAL

Company agrees to represent PRINCIPAL in the activities of selling trading goods provided by the PRINCIPAL, in which the product is one of the trading goods owned by the PRINCIPAL. COMPANY acts as the Sole Agent / Distributor in all types of transactions that occur in Indonesia in accordance with the agreement of the parties.

– ARTICLE 2 : TERM OF AGREEMENT

In this article, the period of this agreement between COMPANY and PRINCIPAL is determined and may or may not be automatically extended in the absence of notice, as well as the terms and conditions for terminating this agreement.

– ARTICLE 3 : PRODUCT AND SALES AGENT / DISTRIBUTOR FEE

COMPANY is entitled to obtain a special price for sales performed in Territory and in accordance to values invoiced by PRINCIPAL to COMPANY as to determine the variable of commission for COMPANY and the detailing of the total price is determined from the effective amount received by the consumer.

– ARTICLE 4 : TERMS OF PAYMENT

Payment is performed by COMPANY in the term according to the issued payment invoice by PRINCIPAL, that is specified, payment is performed within 60 (sixty) days after the bill lading date.

– ARTICLE 5 : TRANSPARENCY

COMPANY will provide full transparency on all sales-related activities for the Products owned by PRINCIPAL in the Territory. The PRINCIPAL will perform full transparency upon the appointment of Distributor for COMPANY and shall not undermine the purposes and provisions of this Agreement.

– ARTICLE 6 : SOLE AGENT / DISTRIBUTOR ACTIVITIES

COMPANY will serve its role as Sole Agent / Distributor by performing promotional activities and sales to customers in Territory. All details of COMPANY as sole agent/distributor are also written in this agreement. 

– ARTICLE 7 : OBLIGATION OF THE PRINCIPAL

PRINCIPAL guarantees its obligation to provide knowledge and training as required for COMPANY as Sole Agent / Distributor.

– ARTICLE 8 : TAXATION

Both Parties are responsible for their own taxation obligations arising from this Agreement.

– ARTICLE 9 : MINIMUM SALES TARGET

In this article, the minimum sales target that must be met in accordance with what has been agreed by both parties is listed, it is also stated in this article the bonus that will be obtained by COMPANY if it reaches the minimum sales target and also listed the consequences if COMPANY does not meet the minimum sales target.

– ARTICLE 10 : ASSIGNMENT AND SUB AGREEMENTS

To ensure that neither Party may surrender, assign or transfer part or all of this Agreement, without the prior written express consent of the counterparty.

– ARTICLE 11 : GUARANTEE

Both Parties guarantee that each Party able to act based on Indonesia and its country’s governed law to conduct its line of business which is in accordance with the fulfillment of this Agreement, therefore Both Parties shall not be troubled by any party claiming to have prior rights there to, and therefore Both Parties are herewith relieved of all claims by other parties regarding such matters.

– ARTICLE 12 : CONFIDENTIALITY

Recipient of Confidential Information agrees to keep confidential all Confidential Information and not disclose or cause or permit the disclosure of the Confidential Information unless written acknowledgement is obtained  by the Disclosure.

– ARTICLE 13 : INTELLECTUAL PROPERTY RIGHTS

The Parties hereby acknowledge that all actions performed based on this Agreement do not imply any transfer of the Intellectual Property Rights between the Parties. Intellectual Property Rights owned by the Parties are, but not limited to, logo, naming, idea, strategy or any other forms with its relation in accordance with this Agreement. With no written consent by the Party owning Intellectual Property Rights, the other Party has no right to use, change or acknowledge it as its own and use it for its own account. 

– ARTICLE 14 : FORCE MAJEURE

In this article, it states a force majeure that can occur between the two parties, causing one party to be unable to carry out its obligations, then the suffering Party is obliged to notify the counterparty within 7 (seven) business days of said force majeure incident.

– ARTICLE 15 : INDEMNITY

COMPANY will not be liable for any damages suffered by PRINCIPAL (including but not limited to, profit loss, third party claims, damages) arising from this Agreement from breach of contract, tort, disadvantage, negligence or other form of actions performed by PRINCIPAL. Under no circumstances will COMPANY be deemed responsible for remedies amounting more than the Fee mutually agreed by the Parties of this Agreement. 

– ARTICLE 16 : SEVERABILITY

In case one or more provisions in this Agreement shall be declared null and void as required by the existing laws or by a decree of an authorized institution, thus such unenforceability or cancellation shall not prejudice or cancel other provisions in this Agreement, and therefore, the other provisions in this Agreement, shall remain valid and binding and enforceable as set forth herein.

– ARTICLE 17 : NOTICE

Any Agreement-related notice, deliveries, or written request and communication required, permitted or desired to be given, shall be deemed effectively given upon receipt and shall be personally delivered or delivered by express international courier.

– ARTICLE 18 : GOVERNED LAW AND DISPUTE RESOLUTION

Any unresolved issues or questions of interpretation arising in connection with this Agreement shall be settled by mutual agreement of the Parties hereto. If this is not possible, all dispute arising from this contract shall be binding and be finally settled under the administrative and procedural Rules of selected legal actions as determined by the parties.

How can Double M help?

Preparing and signing a Distributor Agreement in Indonesia is crucial before you begin your business operations. With Double M’s help,  will assist you through the entire process successfully.