LEGAL WRITING

__________________________________________________________________
Date

: January 22, 2015

To

:(AA)

Cc

: (RAH)

From

: AKS

Subject : Valid Agreement Under Indonesian Law

___________________________________________________________
Valid Agreement Under Indonesian Law
Article 1233 Indonesian Civil Code states that all contracts arise from an agreement
or by law. So, according to article 1233, an agreement would cause an contract.
Contract (Verbintenis) itself means legal consequences that create a right and
obligation. While an agreement (Overeenkomst) means a legal effect not just an
action. So, the relation of contract and agreement is about cause and effect. There
is no agreement without legal effect. Legal effect from an agreement is the
presence of a rights and obligations.
Concerning the conditions that are required for the validity of agreements, article
1320 states that in order to be valid, an agreement must satisfy the following four
conditions :

Conditions That Are Required For The Validity of Agreement

1. There must be consent of the
individuals who are bound thereby.
2.

There must be capasity

conclude an agreement.

to

Subjective Conditions

3. There must be a specific subject.

4. There must be an admissible
cause.

Objective Conditions

Subjective Conditions because it concerns about the individuals. Violation of

subjective condition, resulting the right for another party in the agreement to file a
suit regarding the violation.
Objective Conditions because it is concerning about the agreement itself.
Violation of objective condition conduces the agreement to be null and void.

1. There Must Be Consent of The Individuals Who are Bound Thereby

The consent of those who bind themselves means a meeting of the minds, an
agreement must require the existence of it. Article 1321 Indonesia Civil Code states
that there is no consent of those who bind themselves if granted by error, obtained
by duress or by fraud. But because this condition classified as Subjective Condition,
so, violation of this condition shall not render an agreement invalid. But another
party in the agreement has a right to file a suit regarding the violation.
There is a question regarding this condition, that is does silent means agree? Silent
is a sign of persons dissenting because conluding an agreement the parties must
agree each other. That is why approval is required in an agreement. We do not have
to make interpretation toward the thing that really clear. We should not be affected
to doctrin from common law judges because some of them said silent means agree.
2. There must be capasity to conclude an agreement
Each individual shall be authorized to conclude agreements, unless he has been
declared incompetent by law. Article 1330 Indonesian Civil Code states that there
are three (3) following individuals that shall be incompetent to conclude
agreements, as follows :
1. Minors ;
2. Individuals under guardianship ;
3. Married women, in the events stipulated by law, and in general, individuals
who are prohibited by law from concluding specific agreements;
This condition also classified as Subjective Condition, so, violation of this condition
shall not render an agreement invalid. This is as stated in article 1331 that the
incompetent individuals, however, object to the agreement unless such objection is
exluded by law.
Based on article 330 Indonesian Civil Code adult standard in Indonesia is 21 years.
But, based on Law No. 01 year 1974, adult standard in Indonesia is 18 years. It is
as stated in article 47 that children who have not reached 18 years old or never
enters into a marriage is under the authority of his parents as long as they are not
removed from their authority. So, which rules that should be used? To answer this
question we can use lex posterior derogat legi priori principle, it means the
younger law overrides the older law. Therefore, based on lex posterior derogat legi
priori principle, we should use Law No. 01 year 1974 as an adult standard in
Indonesia.
3. There must be a specific object

Specific object means the object of agreement must be real and clear, and it can be
determined either type or amount of object. In article 1332 also stipulates that
only objects that can be traded that can be the object of agreements. How about
with the future objects? Could it be the object of agreement? To answer these
questions we can see on article 1334 Indonesian Civil Code which stated Future
objects may be the object of an agreement. Because this condition classified as
objective condition, so, violation of this condition conduces the agreement to be null
and void.
4. There must be an admissible cause
This condition means an agreement is not permissible if it is prohibited by law, or if
it violates good conduct, or public order (Article 1337 Indonesian Civil Code). In
addition, article 1335 also stated that any agreement without a cause or concluded
pursuant to a fraudulent or implausible cause, shall not be enforceable. Because
this condition also classified as objective condition, so, violation of this condition
conduces the agreement to be null and void.