Comparison of Civil Law and Common Law

Civil Law (Indonesia) Common Law

Agreement Article 1313 of Indonesian Civil Code (“ICC”): An agreement is a concord of understanding and intention,
(Perjanjian) An agreement is an act pursuant to which one or between two or more parties, with respect to the effect upon
more individuals bind themselves to one another. their relative rights and duties, of certain past or future facts
or performances. The act of two or more persons, who unite
Basic elements of agreement:1 in expressing a mutual and common purpose, with the view
1. acceptance; of altering their rights and obligations.6
2. between 2 (two) or more parties;
3. the parties agreed to bind themselves; Basic elements of agreement: offer and acceptance7
4. to perform something;
5. in the field of resources law. The difference between an agreement in Common Law and
Civil Law Indonesia is that agreement does not necessarily
In order for an agreement to be valid, an agreement mean a legally binding agreement (contract). Any contract is
must comply with Article 1320 of ICC which must an agreement, however not all contracts are agreement. An
satisfy the following four condition: agreement merely an acceptance of an offer made by
1. consent of the individuals who are bound another party.
thereby;2
2. capacity to enter into an obligation;3
3. specific subject matter;4
4. permitted cause.5

Consequence of a valid agreement according to Article

1338 of ICC:

1 Hukum Perdata dalam Perspektif BW, Djaja S. Meliala, page 176

2 Article 1321 ICC, “No consent is valid if it is granted based on mistake or obtained by duress or fraud.”
3 Article 1329 ICC, “Each individual is authorized to conclude agreements, unless he has been declared incompetent by law”
4 Article 1332 ICC, “Only tradable properties may form the subject matter of agreements.”
5 Article 1335 ICC, “Any agreement without a cause, or concluded pursuant to a fraudulent or prohibited cause, is not be enforceable.”
6 https://thelawdictionary.org/agreement/
7 https://contract-law.laws.com/contracts/agreement
 Civil Law (Indonesia) Common Law
“All valid agreements apply to the individuals who
have concluded them as law. Such agreements are
irrevocable other than by mutual consent, or pursuant
to reasons stipulated by the law. The agreement must
be executed in good faith.”

Contract Definition of contract cannot be found in the

A contract is a legally binding agreement which recognises
prevailing Indonesian law. and governs the rights and duties of the parties to the
agreement. A contract is legally enforceable because it
The term “kontrak” is commonly found in business meets the requirements and approval of the law, and the
practice. Considering that people rarely run their formation of a contract generally requires an offer,
business carelessly, hence the business contracts are acceptance, consideration, and a mutual intent to be bound.9
usually made in writing, so that the contract can also In conclusion, contract is an agreement which is legally
be referred to as an agreement made in writing.8 enforceable by law (agreement has broader definition).

Basic elements of contract:

1. mutual assent;
2. expressed by a valid offer and acceptance;
3. adequate consideration;
4. capacity; and
5. legality.

Engagement All obligations (engagement) arise either from In common law, there is no term “engagement”.
(Perikatan) agreements or law.10 Their purpose is to provide
something, to do something or not to do something.11

The obligations may arise from agreement (Article

8 legalakses.com/download/Hukum%20Perjanjian/Perikatan.pdf
9 https://lawhandbook.sa.gov.au/print/ch10s02.php
10 Article 1233 of Indonesian Civil Code
11 Article 1234 of Indonesian Civil Code
 Civil Law (Indonesia) Common Law
1313 ICC) or law (Article 1352 ICC).

Breach Default or “wanprestasi” means failure to fulfill In common law, there are differentiation between default
obligations as specified in the agreement. A failure to (wanprestasi) and breach of contract (cedera janji).
fulfill an agreement are caused by:12
1. debtor’s error due to deliberate/intentional or Default means negligent or non performance any kind of
negligent; and provisions in the law or the agreement (referring to the
2. due to overmacht (forcemajeur). agreement). Whereas breach of contract, means negligent or
non performance of contract, it is defined as “breach of
4 (four) types of default: contractual obligation" of a contract.
1. does not fulfill the obligation;
2. late in fulfilling the obligation; Although, other resources stated that an event of default is
3. bad fulfillment of obligation; specified in a commercial agreement where a non-defaulting
4. perform an act that is prohibited by the party can terminate the agreement. Events of default are
agreement. common in loan agreements or debt instruments, the
happening of which entitles the lender to cancel the facility
There is no difference between default (wanprestasi) and/or declare all amounts owing by the borrower to be
and breach of contract (cedera janji) in Indonesian immediately due and payable or payable on demand. Typical
law.13 The consequence of default are: events of default include:
1. remedy (ganti rugi) according to Article 1243 1. non-payment of interest or principal;
of ICC; 2. breach of representation;
2. termination of the agreement according to 3. breach of covenant;
Article 1266 of ICC; 4. cross-default;
3. fulfillment of the obligations; 5. material adverse change; or
4. fulfillment of the obligations along with the 6. insolvency.
remedy; or
5. termination of the agreement with remedy Types of Breaches of contract:14

12Hukum Perdata dalam Perspektif BW, Djaja S. Meliala, page 178

13Wanprestasi dan Perbuatan Melawan Hukum Dalam Kontrak di Indonesia, Suhendro, Disertasi, Universitas Islam Indonesia, Yogyakarta, 2014, accessed through:
https://dspace.uii.ac.id/bitstream/handle/123456789/9435/DISERTASI%2085.pdf?sequence=1&isAllowed=y,
 Civil Law (Indonesia)
according Article 1267 of ICC.
Tort Tort or onrechtmatigedaad or “perbuatan melawan
hukum” in Indonesia is stipulated under Article 1365
of ICC which stated, “Every unlawful act that causes
damage onto another person obliges the wrongdoer
to compensate such damage.”
Tort is consisting of (formula of tort):
14 https://www.bc-llp.com/wp-content/uploads/2015/03/What-is-the-Difference-Between-a-Material-Breach-and-a-Non-Material-Breach-Contract.pdf jo.
https://www.lawfirms.com/resources/business/types-contract-breaches.htm
15 https://tort.laws.com/ yang artinya: tindakan (atau kelalaian) + korban/kerusakan + kesalahan + hal yang wajib dilindungi + kerugian = kewajiban hukum
Common Law
1. Actual Breach, which consist of:
a. non-performance
b. defective
c. non-truth statement
2. Material Breach (a breach of contract that is a major
failure to perform, the purpose of the contract is not
fulfilled and the contracting party does not get the
product or service that he bargained and negotiated
for);
3. Non-Material or Minor or Partial Breach of Contract
(the failure to perform is related to a tangential aspect
of the agreement, but the fundamental purpose of the
contract was fulfilled);
4. Fundamental Breach of Contract (A breach that
permits the aggrieved party to terminate performance
of the formulated contract);
5. Anticipatory Breach of Contract (An unequivocal
indication that the party refuses to undertake the
project or deliver performance as stipulated in the
contract, whether it is explicitly or implicitly)
Tort is a civil “fault” against an obligation which is
“stipulated by law”. Hence in Common Law, tort is excluded
from contract law.
Tort is consisting of (formula of tort):
Act (or omission) + Causation + Fault + Protected Interest
+ Damage = Liability15
 Civil Law (Indonesia) Common Law
1. Unlawful act
According to Arrest Cohen-Lindenbaum (1919), Tort in common law is limited to only those recognized, in
the definition of “unlawful act” comprises of: contrast to Indonesia, where Tort under the Article 1365 of
a. violate the subjective rights of others; ICC with a broader scope.
b. contravene the legal obligations of the
offender; Types of Torts in Common Law:
c. violate the rule of decency/morality a. Negligence
(Article 1337 of ICC); or b. Defamation
d. contrary to propriety, accuracy, and c. Nuisance
caution. d. Injurious falsehood
2. Fault e. Injurious to domestic relation
Anyone who is responsible for a tortious f. Injurious to economic and contractual relations
liability shall based on fault. The burden of g. Deceit
proof lies with the plaintiff. h. Malicious prosecution
3. Damages i. Misrepresentation
Damages for tort includes: j. Non-disclosure
a. Remedy for all unlawful act (Article 1365 k. Strict liability
of ICC); l. Infringement
b. Remedy for other’s unlawful act or
vicarious liability (Article 1367 of ICC);
c. Remedy for animal owner (Article 1368
of ICC);
d. Remedy for the collapsed building owner
(Article 1369 of ICC);
e. Remedy for the family left by the person
who was killed (Article 1370 of ICC);
f. Remedy for injury or disability (Article
1371 of ICC);
g. Remedy for defamation (Article 1372 of
ICC).
The remedy for damages by tort is in
 Civil Law (Indonesia)
accordance with the remedy for damages by
breach of contract.
4. Causality between Act and Damage
Remedies I. Damages for breach of contract/event of default
(Ganti rugi)
and According to Article 1243 of ICC, the damages for
Damages breach of contract/default are consisting of:
(Kerugian) 1. Cost
It includes any expenses or expenditures that
have actually been spent or incurred by the
claiming party.
2. Loss
It includes any damage to the property of the
claiming party (and also other property).
3. Interest
It refers to “loss of profits” that have been
anticipated or calculated by the claiming party.
The damages under, the Article 1247 and 1248 of
ICC, shall be the actual harm that has been caused
by the breach of contract, or can be referred to as
“material damage”.
Those damages may be claimed, in accordance with
Article 1264 of ICC, shall be the consequences of:
1. the losses that has been suffered; and/or
2. the profit that would have been enjoyed.
II. Damages for Tort
Common Law
Type of Damages:
1. Compensatory Damages
As a result of a breach of contract to cover the loss,
consisting of:
a. General Damages
b. Special Damages (Consequential Damages)
Consequential damages is the loss incurred by the
breach but is not a direct breach or in an
immediate way.
2. Nominal Damages
Damage that is imposed for a wrongdoing without any
financial harm. The purpose of this damage is to proof
the fault of the other party. The fine is usually only 1
cent, although the nominal damages may result in the
losing party to pay for lawyer fee for the winning party.
3. Exemplary Damages (Punitive Damages)
It aims to punish in tort cases for the following reasons:
a. Willfully act
b. Maliciously act
c. Fraudulently act
4. Liquidated Damages
Damages in which the set amount is agreed in the
 Civil Law (Indonesia)
In tort, the plaintiff may claim for immaterial
damages in form of:
1. Restitution in integram (return to its original
state);
2. Money;
3. Prohibition to perform an act;
4. Penalty payment (dwangsom/uang paksa);
and/or
5. Making a certain statement.
Asides from the abovementioned, the damage in
breach of contract also applies in tort.
Common Law
contract (compare to Article 1249 of ICC)
5. Restitution
Returning to its original state, usually due to the
invalidity of an agreement. It is excluded from tort.
6. Rescission
The agreement is terminated by the court.
7. Reformation
The agreement is revised by the court.

8. Specific Performance
The court orders a specific performance for the party.
Perikatan
Bersyarat

Novasi,
Subrogasi,
Cessie