The principle of pacta sunt servanda, which means that an agreement applies as a law to its makers, is known in civil contract law. According to Article 1338 of the Civil Code, both parties bound in an agreement are subject to the entire contents of the provisions contained in the agreement.

In an agreement, the various rights and obligations of the parties are regulated. One of the parties can be considered in default if they do not carry out the contents of the agreement or carry it out but not as it should be.

In Article 1243 of the Civil Code on Default, default is a situation where the debtor does not fulfill the obligations that have been stipulated; this includes obligations made by law or agreement.

Article 1243 of the Civil Code:

Reimbursement of costs, losses, and interest for non-fulfillment of an obligation becomes obligatory if the debtor. However, he has been declared negligent, still fails to fulfill the responsibility, or if something that must be given or done can only be offered or done within a time that exceeds the time specified.

Based on the contents of Article 1243 of the Civil Code above, there are at least 3 elements of default, namely:

1. There is an agreement;
2. There is a party who breaks the promise or violates the agreement; and
3. Has been declared negligent, but still does not carry out the contents of the agreement.

According to Article 1239 of the Civil Code, if one party to an agreement does not fulfill its obligations, the party must pay costs, compensation, and interest.

Everyone can enter into agreements, both those regulated and those not regulated by law, according to Book III of the Civil Code, which adheres to an open system. Article 1338 of the Civil Code, which provides freedom for parties to determine the content, implementation, and terms of the agreement, as well as to:

1. Making and not making agreements;
2. Agreeing to an agreement with anyone; and
3. Determining the form of the agreement, namely written or oral.

If PT A has sufficient evidence to believe that PT B is unable to perform the work stipulated in the Agreement, PT A may terminate the agreement unilaterally by overriding Article 1266 of the Civil Code. Thus, the parties may arrange a clause containing unilateral termination of the agreement by PT A if there is sufficient evidence, believing that PT B is considered incapable of carrying out the work. The termination of this agreement does not need to be done by giving a warning letter, but simply by a written notice to PT B, by overriding Article 1266 of the Civil Code which regulates:

A condition of nullity is always considered to be included in a reciprocal agreement, in case one of the parties does not fulfill its obligations. In such a case, the agreement is not null and void, but rescission must be requested from the Court.

This request must also be made, even if the nullity condition regarding the non-fulfillment of the obligation is stated in the agreement. If the nullity condition is not stated in the agreement, the Judge, considering the circumstances, at the request of the defendant, is free to grant a time to fulfill the obligation, but the period must not exceed one month.

If PT B does not accept the unilateral termination of the agreement because it has a different interpretation of being considered incapable of carrying out the work, PT B can file a lawsuit to the court for unlawful acts (“PMH”).

Supreme Court Jurisprudence No. 4/Yur/Pdt/2018, which states:

Unilateral termination of the agreement is included in the tort.

Legal Basis:

Civil Code.

Decision:

Supreme Court Jurisprudence No. 4/Yur/Pdt/2018.

Reference:

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