A Letter of Intent for Distributorship is commonly used in Indonesian business practice as a preliminary step before entering into a formal distribution agreement. This document is particularly important when companies are exploring new distribution channels or expanding their market presence in Indonesia. It serves to memorialize the parties' preliminary understanding while maintaining flexibility for detailed negotiations. The document typically includes proposed terms regarding territory, product range, and basic commercial arrangements, while ensuring compliance with Indonesian regulations such as Law No. 7 of 2014 on Trade and relevant Ministry of Trade regulations. While most provisions are non-binding, certain elements like confidentiality and exclusivity of negotiations are often made binding. This approach allows parties to proceed with due diligence and detailed negotiations while having a clear framework of their intended business relationship.
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1. Date and Parties: Full legal names and addresses of both the proposed supplier/manufacturer and the proposed distributor
2. Introduction: Brief statement of intent to enter into a distribution relationship
3. Purpose: Clear statement of the proposed business relationship and general scope of the future distributorship
4. Proposed Territory: Geographic area where distribution rights would be granted
5. Product Range: General description of products to be covered under the proposed distribution agreement
6. Basic Terms: Outline of key commercial terms being considered, including exclusivity status
7. Timeline: Proposed timeline for negotiation and execution of the final agreement
8. Non-Binding Nature: Clear statement that the LOI is non-binding except for specific provisions
9. Confidentiality: Binding provisions regarding confidentiality of discussions and shared information
10. Exclusivity of Negotiations: If applicable, binding provision regarding exclusive negotiations for a specified period
11. Governing Law: Specification of Indonesian law as governing law
12. Signature Block: Space for authorized representatives to sign
1. Due Diligence: Include when parties agree to conduct due diligence before final agreement, outlining the process and timeline
2. Costs and Expenses: Include when parties want to specify who bears the costs of negotiation and due diligence
3. Regulatory Compliance: Include when specific regulatory approvals or licenses will be required
4. Good Faith Deposit: Include when a preliminary deposit or financial commitment is required
5. Termination Provisions: Include when parties want to specify conditions for terminating negotiations
6. Dispute Resolution: Include when parties want to specify dispute resolution mechanism for binding provisions
1. Initial Product List: Preliminary list of products being considered for distribution
2. Territory Map: Visual representation of proposed distribution territory
3. Timeline Schedule: Detailed timeline for negotiation process and key milestones
4. Due Diligence Requirements: List of documents and information required for due diligence process
Relevant legal definitions
Clauses
Relevant Industries
Consumer Goods
Electronics
Automotive
Pharmaceuticals
Food and Beverage
Industrial Equipment
Fashion and Apparel
Cosmetics and Personal Care
Construction Materials
Agricultural Products
Medical Devices
Software and Technology
Telecommunications Equipment
Chemical Products
Machinery and Tools
Relevant Teams
Legal
Sales
Business Development
Commercial
Supply Chain
Operations
Compliance
International Business
Distribution
Procurement
Contract Management
Relevant Roles
Chief Executive Officer
Commercial Director
Sales Director
Business Development Manager
Distribution Manager
Supply Chain Manager
Legal Counsel
Chief Operating Officer
Regional Sales Manager
Country Manager
General Manager
Procurement Manager
Contract Manager
Compliance Officer
International Business Manager
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