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Head Of Terms Agreement for Indonesia

Head Of Terms Agreement Template for Indonesia

A Heads of Terms Agreement under Indonesian law serves as a preliminary document that outlines the key commercial terms and understanding between parties before entering into a detailed definitive agreement. This document, while primarily non-binding except for specific provisions such as confidentiality and exclusivity, establishes the framework for future negotiations and details the principal terms of a proposed transaction. Subject to Indonesian civil law principles, particularly the Indonesian Civil Code (KUHPerdata), it provides a structured approach to negotiating complex commercial transactions while maintaining legal clarity on the parties' intentions and commitments.

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What is a Head Of Terms Agreement?

A Head of Terms Agreement is a crucial preliminary document used in Indonesian business transactions to establish the fundamental terms and conditions of a proposed deal before proceeding with detailed negotiations and definitive agreements. This document type is particularly relevant in complex commercial transactions, mergers and acquisitions, joint ventures, and significant business partnerships within the Indonesian legal framework. While primarily non-binding, it typically contains certain binding provisions such as confidentiality and exclusivity clauses. The agreement must comply with Indonesian civil law principles, particularly the Indonesian Civil Code (KUHPerdata), and serves as a roadmap for further negotiations and due diligence processes. It's especially important in cross-border transactions where foreign investment regulations and local business practices need to be carefully considered.

What sections should be included in a Head Of Terms Agreement?

1. Parties: Full legal names and details of all parties involved in the proposed transaction

2. Background: Context of the proposed transaction and relationship between the parties

3. Definitions: Key terms used throughout the document

4. Proposed Transaction: High-level description of the intended transaction or business relationship

5. Key Commercial Terms: Essential business terms including pricing, payment terms, and key deliverables

6. Timeline: Proposed schedule for negotiation, due diligence, and completion

7. Confidentiality: Binding provisions regarding the confidentiality of discussions and shared information

8. Exclusivity: If applicable, terms of exclusive negotiation period

9. Non-Binding Nature: Clear statement of which provisions are non-binding vs. binding

10. Governing Law: Specification of Indonesian law as governing law and relevant jurisdiction

What sections are optional to include in a Head Of Terms Agreement?

1. Break Fee: Used when parties want to specify compensation if one party withdraws from negotiations

2. Costs: Include when there's a need to specify how costs of negotiation and due diligence will be borne

3. Regulatory Approvals: Required for transactions that may need governmental or regulatory clearance

4. Due Diligence: Include when specific due diligence requirements need to be outlined

5. Conditions Precedent: Used when certain conditions must be met before proceeding with the main transaction

6. Public Announcements: Include for high-profile deals or when parties are public companies

7. Interim Operations: Used when there's a need to govern how target business operates during negotiations

What schedules should be included in a Head Of Terms Agreement?

1. Key Commercial Terms Schedule: Detailed breakdown of principal commercial terms

2. Timeline Schedule: Detailed timeline with key milestones and deadlines

3. Corporate Information Schedule: Key corporate details of the parties involved

4. Assets Schedule: If relevant, list of key assets involved in the transaction

5. Due Diligence Requirements: List of required documentation and information for due diligence

Authors

Alex Denne

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

Jurisdiction

Indonesia

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions






























Clauses






























Relevant Industries

Manufacturing

Technology

Real Estate

Mining

Energy

Infrastructure

Financial Services

Telecommunications

Healthcare

Agriculture

Retail

E-commerce

Transportation

Hospitality

Construction

Education

Relevant Teams

Legal

Corporate Development

Business Development

Finance

Strategy

Executive Leadership

Commercial Operations

Risk Management

Mergers & Acquisitions

Investment

Compliance

Corporate Secretariat

Relevant Roles

Chief Executive Officer

Managing Director

Business Development Director

Chief Financial Officer

Legal Counsel

Corporate Secretary

Investment Manager

Commercial Director

Head of Strategy

Mergers & Acquisitions Director

Joint Venture Manager

Contract Manager

Risk Manager

Chief Operating Officer

Head of Legal

Business Development Manager

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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