How does the Indonesian Civil Code regulate independent service agreements?

Article 1320 establishes four general requirements for a valid agreement:

• consent of the parties;

• legal capacity;

• a sufficiently certain subject matter; and

• a lawful cause.

Article 1338 provides that validly concluded agreements bind the parties and must be performed in good faith.

A Client–Vendor agreement should therefore identify the parties, services, commercial payment and principal rights and obligations clearly.

Under Article 1601b, a contractor undertakes to complete specified work for the customer in return for an agreed price.

Characteristics supporting this arrangement include:

• an identifiable task or result;

• responsibility for completing the work;

• control over the method of performance;

• an agreed price;

• responsibility for quality or defects; and

• completion or acceptance of the result.

Not every service produces a physical or separately transferable result. Consultancy, design, software support and professional advice may be provided under a general service agreement.

The agreement should define:

• the service or Assignment;

• the expected output or standard;

• timing and deadlines;

• commercial payment;

• acceptance or reporting;

• intellectual-property rights;

• confidentiality;

• liability; and

• termination.

A civil agreement creates greater misclassification risk where:

• it describes an ongoing job rather than a defined service;

• the Vendor must follow mandatory working hours;

• payment resembles a fixed salary;

• the Vendor reports to an internal manager;

• the Client controls how the work is performed;

• the Vendor carries no meaningful commercial risk; or

• the Vendor is integrated into the Client’s workforce.

Zooly supplies B2B SaaS infrastructure that business customers use to operate marketplaces and administer commercial relationships.

The Client and Vendor—not Zooly—enter into the Direct Client–Vendor Service Agreement and each Assignment. Zooly does not receive the services, determine the price or control how the Vendor performs the work.

The software should enable the parties to record:

• the specific service or deliverable;

• the agreed commercial payment;

• the Vendor’s responsibility for performance;

• the acceptance process;

• intellectual-property arrangements; and

• the parties’ respective liabilities.