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A Subcontractor Agreement sets out the terms when one company hires another to handle specific parts of a project. In Indonesia, these contracts are especially common in construction, IT, and manufacturing sectors, helping businesses manage complex projects while staying compliant with local labor laws.

The agreement spells out crucial details like payment terms, work timelines, quality standards, and confidentiality rules. It protects both parties by clearly defining responsibilities and risks, particularly important under Indonesian Civil Code provisions governing business partnerships. Good agreements also address worker safety requirements and specify how disputes will be resolved under local jurisdiction.

Use a Subcontractor Agreement when you need specialized work done but don't have the in-house expertise or capacity. This is especially critical in Indonesia's construction and tech sectors, where complex projects often require multiple specialized vendors working together under strict regulatory oversight.

The agreement becomes essential when coordinating work across different companies, managing project timelines, or handling sensitive intellectual property. It's particularly important when dealing with high-value contracts, safety-critical operations, or projects subject to Indonesia's strict labor and construction regulations. Having this agreement in place helps prevent disputes and ensures clear accountability for deliverables, quality standards, and payment terms.

• Simple Subcontractor Agreement: Basic version for straightforward projects with clear scope and minimal complexity
• Nominated Subcontractor Agreement: Used when the main client specifically requests certain subcontractors
• Sub Contractor Form: Simplified format for quick engagements or preliminary agreements
• Construction Subcontracts: Specialized version with detailed safety protocols and building regulations
• Security Subcontractor Agreement: Focused on security services with specific liability and certification requirements

• Main Contractors: Usually larger companies who manage major projects and need specialized help, responsible for drafting the initial Subcontractor Agreement
• Subcontractors: Specialized firms or skilled professionals who perform specific parts of the project, often negotiating terms and scope
• Legal Teams: Corporate lawyers or legal advisors who review and modify agreements to ensure compliance with Indonesian law
• Project Managers: Oversee the practical implementation and monitor compliance with agreement terms
• Company Directors: Sign and authorize agreements as legal representatives under Indonesian corporate law
• Regulatory Bodies: Monitor compliance, especially in construction and labor aspects

• Project Details: Gather specific scope of work, timelines, deliverables, and quality standards
• Company Information: Collect legal names, business licenses, tax numbers, and authorized signatories from both parties
• Payment Terms: Define payment schedules, amounts, and conditions for milestone completion
• Legal Requirements: Check Indonesian labor laws and industry-specific regulations that apply
• Risk Assessment: Identify potential project risks and necessary insurance coverage
• Documentation: Prepare supporting documents like work permits and safety certificates
• Draft Review: Use our platform to generate a legally sound agreement, then review all details with key stakeholders

• Party Details: Full legal names, addresses, and registration numbers of both contractor and subcontractor
• Scope of Work: Detailed description of services, deliverables, and quality standards
• Payment Terms: Clear payment schedule, amounts, and conditions under Indonesian currency regulations
• Project Timeline: Start date, completion dates, and milestone deadlines
• Compliance Clauses: References to relevant Indonesian labor and industry regulations
• Liability Terms: Risk allocation, insurance requirements, and indemnification provisions
• Dispute Resolution: Clear process following Indonesian arbitration laws
• Termination Rights: Conditions and procedures for ending the agreement

A Subcontractor Agreement differs significantly from an Agency Agreement in several key aspects, though both involve delegating work to third parties under Indonesian law. Understanding these differences helps you choose the right agreement for your business relationship.

• Legal Relationship: Subcontractors work independently on specific project components, while agents represent the principal company and can make binding decisions on their behalf
• Scope of Authority: Subcontractors have limited authority confined to their specific tasks, whereas agents can negotiate deals and commit the principal to obligations
• Payment Structure: Subcontractors typically receive project-based payments, while agents often earn commissions or ongoing fees
• Liability Framework: Subcontractors bear direct responsibility for their work quality, but agents' actions legally bind the principal company
• Duration: Subcontractor agreements usually end with project completion, while agency agreements often establish ongoing relationships