Commred (a service provider company engaging in social media support services) is negotiating a contract with
Singsong (an electronic appliances manufacturer) for operating and maintaining its marketplace platform for a
period of 2 years. Commred will be paid upon achievement of certain amount of sales and/or new subscribers.
Commred wants to include a termination right if the sales and acquisition of subscribers is below a certain
amount per month, but Singsong refuses.
What should Commred do?
a. Commred insist on including the termination clause and back out from the deal if not accommodated.
b. Commred should consider a strict indemnity clause upon failure to achieve certain amount of sales and/or
new subscribers, instead of termination clause.
c. Others (give your answer).
Suggested answer: Commred should first ask for due
diligence of the past history of sales and clarify its KPI,
along with other details.
CASE STUDY 2
PT Percumaseni (a company engaging in website development services) and PT XXL Maksiata (a newly
established company which has not obtained operating license from the Government) are exploring a
contract where PT XXL Maksiata wants to have its website fully up and running in 3 months. PT
Percumaseni wants to include a right to walk away from the negotiation and even the contract without
having to compensate, if PT XXL Maksiata fails to secure license from the Government.
What should PT Percumaseni do?
a) PT Percumaseni should push for the right to walk away without having to compensate PT XXL
Maksiata since this is a must have.
b) PT Percumaseni should insist on including penalty, on top of compensation and termination.
c) PT Percumaseni can alternatively consider an indemnity clause.
d) PT Percumaseni should insist on including both (b) and (c).
Suggested answer: Option (a)
e) Others (give your answer).
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For further enquiry please contact us at
Valery Sarumpaet : valery.sarumpaet@arkanantalaw.co.id
Eugenio Gigih : eugenio.gigih@arkanantalaw.co.id