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Letters of Intent (LoI) are crucial preliminary documents in Indonesian business transactions, serving as a roadmap for potential deals and partnerships. They are commonly used when parties wish to document their preliminary understanding before proceeding with detailed due diligence and negotiating definitive agreements. Under Indonesian law, while an LoI is generally non-binding in nature, certain provisions can be made binding, such as confidentiality obligations. The document must comply with Indonesian legal requirements, including language requirements under Law No. 24 of 2009, which mandates the use of Bahasa Indonesia in agreements involving Indonesian parties. LoIs are particularly valuable in complex transactions where parties need to establish clear parameters for negotiations while maintaining flexibility before committing to a final agreement.

1. Date and Parties: Opening of letter identifying the date and full details of all parties involved

2. Introduction: Brief statement establishing the context and purpose of the LoI

3. Transaction Overview: Clear description of the proposed transaction or relationship being contemplated

4. Key Terms: Outline of the principal terms and conditions of the proposed transaction

5. Timeline: Proposed schedule for negotiations, due diligence, and completion

6. Non-Binding Nature: Clear statement that the LoI is non-binding except for specific provisions

7. Confidentiality: Terms regarding the confidential treatment of information exchanged

8. Governing Law: Specification that Indonesian law governs the LoI

9. Signature Block: Space for authorized signatures with full party details