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A Heads of terms outlines the key points of a future agreement before creating the full legal contract. In Indonesian business practice, it's often called a MOU (Memorandum of Understanding) or nota kesepahaman, serving as a road map for more detailed negotiations.

While not typically legally binding under Indonesian law, this preliminary document helps parties align their expectations and capture essential deal points like price, timeline, and core obligations. It's particularly useful in complex transactions like property deals, joint ventures, or major business partnerships where detailed contracts may take months to finalize.

Use a Heads of terms when starting complex business negotiations in Indonesia, especially for high-value deals like property developments, corporate mergers, or joint ventures. It's particularly valuable when dealing with international partners who need clear documentation of preliminary agreements before committing resources.

This document becomes essential when negotiations might stretch over months, involve multiple stakeholders, or require regulatory approvals from Indonesian authorities. Using it early helps prevent misunderstandings, keeps discussions focused, and creates a clear framework for the detailed contract drafting phase—saving time and legal costs later.

• Basic Heads of terms: Outlines fundamental deal points like price, timeline, and core obligations—commonly used for straightforward business transactions in Indonesia
• Detailed negotiation Heads of terms: Includes extensive conditions, due diligence requirements, and regulatory compliance clauses—ideal for complex joint ventures or mergers
• Property-specific Heads of terms: Focuses on land ownership, development rights, and local zoning requirements under Indonesian property law
• Investment Heads of terms: Addresses shareholding structures, management rights, and profit-sharing arrangements for foreign investment deals
• Framework Heads of terms: Creates a master agreement structure for long-term business relationships with multiple future transactions

• Business Owners & Directors: Lead negotiations and make key decisions about the Heads of terms' content and scope
• Corporate Lawyers: Draft and review terms to ensure alignment with Indonesian law and protect client interests
• Investment Bankers: Often initiate and coordinate deals, particularly in mergers and acquisitions
• Property Developers: Use these agreements to outline terms for major real estate projects and developments
• Foreign Investors: Rely on these documents when entering Indonesian markets or forming joint ventures
• Company Secretaries: Manage documentation and ensure proper corporate governance procedures

• Core Deal Information: Gather essential details like party names, transaction value, timeline, and key commercial terms
• Business Structure: Confirm legal status of all parties and any required regulatory approvals under Indonesian law
• Key Objectives: List main goals, deal-breakers, and must-have conditions for each party
• Due Diligence: Collect preliminary financial data, property details, or business records needed for negotiations
• Compliance Check: Review relevant Indonesian regulations, especially for foreign investment or restricted sectors
• Template Selection: Use our platform's customizable templates to ensure all mandatory elements are included correctly

• Party Details: Full legal names, addresses, and registration numbers of all involved entities
• Transaction Scope: Clear description of the proposed deal, business relationship, or project parameters
• Key Commercial Terms: Price, payment terms, timelines, and major deliverables
• Confidentiality Clause: Protection of sensitive information shared during negotiations
• Non-Binding Statement: Clear indication that the document is preliminary except for specific binding provisions
• Governing Law: Reference to Indonesian law and jurisdiction
• Duration: Validity period and conditions for extension or termination
• Signature Block: Space for authorized representatives to sign and date

People often confuse a Heads of terms with a Acquisition Agreement, but they serve different purposes in Indonesian business transactions. While both documents appear in corporate deals, their legal weight and timing differ significantly.

• Legal Binding Effect: Heads of terms are typically non-binding preliminary documents, while Acquisition Agreements are fully binding legal contracts
• Level of Detail: Heads of terms capture key points and basic deal structure, while Acquisition Agreements contain comprehensive terms, warranties, and detailed obligations
• Timing: Heads of terms come first during early negotiations, while Acquisition Agreements represent the final, formal agreement after due diligence
• Purpose: Heads of terms align expectations and guide negotiations, while Acquisition Agreements legally formalize and enforce the complete transaction terms