Global Private M&A Guide - Limited External Content

Indonesia

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Limitations on liability
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Limitations on liability Start Comparison
What is the common cap amount (as a percentage of purchase price)?
Frequency/market practice: The buyer will ask for 100%. If an offshore firm (or an Indonesian firm affiliated with an offshore firm) is advising, usually a lesser percentage is used for business warranties, e.g., 20-50%.
Does the cap (and other liability limitations) apply to the whole agreement or just warranties (or particular terms)?
Frequency/market practice: Generally, the overall (purchase price) cap applies to all claims.
What are the common exceptions to the cap?

Frequency/market practice: Fundamental warranties are often excepted (e.g., title, capitalization, authority). Often, tax and specific areas of concern are also excepted, sometimes with specific higher caps. Separate caps can be negotiated.

Is a deductible or basket common?

Frequency/market practice: Fairly common; a basket is common.

Is a de minimis common?

Frequency/market practice: Fairly common.

How long does seller liability survive?

Frequency/market practice: Fairly common; a general survival of 18-24 months is common. Fundamental warranties and tax warranties are commonly longer than general warranties (five to six years).

Are there any common carve-outs from limitation on seller liability (e.g., fraud, tax, key warranties)?

Frequency/market practice: It is common to carve out fraud.

Is warranty insurance common?

Frequency/market practice: Rarely; this is not used very often, but it is making its market entry in Indonesia.

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