E-commerce in Indonesia – Contracting on the Internet

Legal Updates
E-commerce in Indonesia – Contracting on the Internet
30 September 2020

By Fahrul S. Yusuf and Albertus Jonathan Sukardi

It is possible in Indonesia for parties to agree and enter into a digital agreement. In principle, a digital agreement shall be deemed valid if:

  • mutual consent of the parties is accomplished;
  • it is concluded by a competent subject of the law or represented according to the prevailing laws and regulations;
  • it is executed for a certain matter; and
  • the object of the transaction is not prohibited by law, morality or public order.

A digital agreement shall at least contain information on:

  • the identity of the parties;
  • the object of the agreement and its specifications;
  • electronic transaction requirements;
  • price and fees;
  • the procedure to terminate the agreement;
  • a provision that grants a right to the damaged party to receive indemnification for any hidden defect; and
  • choice of law to settle the electronic transaction.

Prevailing Indonesian laws and regulations do not specifically address click wrap contracts or whether they are enforceable in Indonesia. Since click wrap contracts are prepared in digital format, such contracts should at least contain the information above to be enforceable. As long as click wrap contracts contain this minimum information, they would be enforceable in Indonesia.

Parties to a digital agreement can use a digital signature. The Indonesian government acknowledges that a digital signature is as equally valid as a physical signature. A digital signature shall also be treated as having equal legal force as a physical signature.

Applicable Laws

The practice of entering into digital contracts is generally regulated under Government Regulation No. 71 of 2019 on the Implementation of Electronic Systems and Transactions (the Electronic Transaction Regulation). A digital contract can be entered into by a natural person and business entity, either in the form of a legal entity or a non-legal entity. In the private sector, electronic transactions can be concluded among and between:

  • businesses;
  • businesses and consumers;
  • individuals;
  • institutions; and
  • institutions and businesses in accordance with the applicable laws and regulations.

Nothing in the Electronic Transaction Regulation provides any specific distinction or special treatment if the digital contract is entered into by and between business players

This first appeared in the Lexology GTDT e-Commerce 2021 global guide. You can find the full chapter here.

This publication is intended for informational purposes only and does not constitute legal advice. Any reliance on the material contained herein is at the user\'s own risk. All SSEK publications are copyrighted and may not be reproduced without the express written consent of SSEK.

For More Information, Please Contact
Back to Indonesia Law Blog
Related Articles