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Master Agreement
I need a master agreement for a long-term supply chain partnership with a local vendor, including terms for pricing adjustments, delivery schedules, and quality assurance. The agreement should also outline dispute resolution mechanisms and confidentiality clauses.
What is a Master Agreement?
A Master Agreement sets the core rules for all future business dealings between two parties in Indonesia. It's the main contract that lays out key terms, rights, and obligations that will apply to every transaction or project the parties undertake together.
Under Indonesian contract law, this foundational document saves time and reduces legal risks by eliminating the need to negotiate basic terms for each new deal. Companies often use Master Agreements for ongoing supplier relationships, service contracts, or financial transactions - especially when they expect multiple deals over time. The agreement stays valid until either party terminates it or its specified end date arrives.
When should you use a Master Agreement?
Use a Master Agreement when your company plans ongoing business relationships with the same partner in Indonesia. It's especially valuable for regular supplier arrangements, repeated service contracts, or frequent financial transactions where negotiating terms from scratch each time would waste resources.
Indonesian businesses benefit most from Master Agreements in sectors with complex regulatory requirements, like banking, telecommunications, and energy. The agreement becomes crucial when dealing with multiple project phases, varying delivery schedules, or regular order volumes. It provides legal certainty while maintaining flexibility to adjust specific terms for each transaction through simpler supplementary documents.
What are the different types of Master Agreement?
- Master Subscription Agreement: Governs ongoing software or service subscriptions, defining access rights and renewal terms
- Master Franchise Agreement: Outlines the rights and obligations between franchisors and franchisees in Indonesia's growing franchise market
- Master Service Agreement Software Development: Structures long-term software development relationships, including IP rights and delivery milestones
- Consultant Services Master Agreement: Establishes terms for ongoing consulting engagements with clear scope and deliverables
- Master Restructuring Agreement: Manages complex debt restructuring processes with multiple creditors under Indonesian law
Who should typically use a Master Agreement?
- Corporate Legal Teams: Draft and review Master Agreements to protect company interests and ensure compliance with Indonesian regulations
- Business Development Managers: Identify needs for Master Agreements and negotiate commercial terms with potential partners
- External Law Firms: Provide specialized legal expertise, especially for complex cross-border or industry-specific agreements
- C-Level Executives: Review and sign agreements as authorized representatives, making strategic decisions about long-term partnerships
- Compliance Officers: Monitor adherence to agreement terms and ensure alignment with Indonesian corporate governance requirements
How do you write a Master Agreement?
- Company Details: Gather complete legal names, registration numbers, and authorized signatories of all parties involved
- Business Scope: Define exact services, products, or transactions the agreement will cover in Indonesia
- Duration Terms: Determine initial term length, renewal options, and termination conditions
- Payment Structure: Outline pricing, payment schedules, and currency arrangements following Indonesian banking regulations
- Compliance Review: Check industry-specific requirements and local regulations that affect your agreement
- Document Generation: Use our platform to create a legally-sound Master Agreement that includes all required elements under Indonesian law
What should be included in a Master Agreement?
- Party Identification: Full legal names, addresses, and registration numbers of all parties under Indonesian law
- Scope Definition: Clear description of covered activities, services, or transactions
- Term and Termination: Duration, renewal conditions, and grounds for early termination
- Payment Terms: Pricing structure, payment schedules, and currency specifications
- Dispute Resolution: Choice of Indonesian law, jurisdiction, and arbitration procedures
- Force Majeure: Specific events that excuse performance under Indonesian regulations
- Confidentiality: Data protection measures complying with Indonesian privacy laws
- Execution Block: Proper signature format for Indonesian legal entities
What's the difference between a Master Agreement and a Master Service Agreement?
A Master Agreement differs significantly from a Master Service Agreement in Indonesian business practice. While they may sound similar, they serve distinct purposes and have different scopes.
- Scope and Coverage: Master Agreements establish broad framework terms for multiple types of future transactions, while Master Service Agreements focus specifically on ongoing service delivery arrangements
- Transaction Flexibility: Master Agreements allow for various transaction types through supplementary documents, but Master Service Agreements typically detail specific service levels and deliverables
- Term Structure: Master Agreements often have indefinite terms with multiple renewal options, while Master Service Agreements usually specify fixed service periods with defined milestones
- Regulatory Context: Under Indonesian law, Master Agreements require broader compliance considerations across multiple business areas, whereas Master Service Agreements focus on service-specific regulations and standards
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