Have you ever been in a situation where you have to make or sign an agreement? Be it a buy-sell agreement, a lease agreement, or even a business cooperation agreement? Maybe you’ve experienced the hesitation of signing your first employment contract, or felt indecisive when having to make a rental agreement with your landlord. Even something as seemingly simple as buying a motorcycle on credit actually involves a legally binding agreement.
In today’s digital age, transactions and agreements are just a few clicks away. From online shopping to digital investments, everything involves legally binding agreements. However, did you know that not every agreement you sign or agree to is automatically valid in the eyes of the law?
An important first step is to understand the conditions that make an agreement legally valid in Indonesia. This understanding is not just a formality, but a form of protection for yourself. Imagine if one day there is a dispute or dispute, an agreement that does not meet the legal requirements can backfire against your position.
This article gives you a complete guide to the requirements you need to fulfill for an agreement to be valid and legally binding. By understanding this, you can be more confident in making decisions and protecting your interests in every agreement you make.
Legal Basis of Agreement According to Article 1320 of the Criminal Code
Article 1320 of the Civil Code explains that there are four legal requirements that you must fulfill in an agreement. These conditions must be fulfilled cumulatively, meaning that if one of the conditions is not met, then the related party can consider the agreement void or has no legal force. The four conditions include agreement, capacity, certain things, and lawful cause. The following is a detailed explanation of the four conditions:
Four Main Requirements for the Legality of an Agreement According to Article 1320 of the Criminal Code
1. Agreement of Both Parties
The first requirement that must be met for an agreement to be valid is the agreement between the two parties. This agreement means that both parties involved in the agreement understand and accept the contents of the agreement consciously and without coercion. In the legal context, this agreement is often referred to as “consensus” or approval. If there is one party who feels forced or deceived in giving his consent, then the agreement may become invalid. For example, if someone signs an agreement under threat or deception, then the agreement given is considered invalid due to coercion or deception.
Example of a Deal Breach Case
Cases of breach of agreement in agreements occur quite often in practice. For example, a borrower of money who is pressured by a lender to sign a contract with a very high interest rate. In this situation, the agreement given by the borrower is invalid because it is based on threats.
2. Capacity to Enter into an Agreement
The second requirement is the legal capacity of the parties involved in the agreement. Capability here means that the parties involved in the agreement must be of legal age and not in a condition that prevents them from making an agreement. According to Indonesian law, a person is considered capable if they are 18 years old or above or married. In addition, people under guardianship, such as those with mental illness, are not considered legally competent to enter into an agreement. This is because they are not considered to have sufficient capacity to understand and bear the legal consequences of the agreements they make.
Case Example of Proficiency Violation
One example of a violation of the capability requirement is when a minor signs a property sale and purchase agreement. Because they have not reached the age of capability, the agreement can be considered null and void, unless there is a parent or legal guardian’s participation in signing the agreement.
3. The existence of “particulars”
The third condition that must be met in an agreement is the existence of a “certain thing” or a clear object of agreement. The object of this agreement must be specific and clearly identifiable. Without a clear object of agreement, an agreement will lose its legal certainty. For example, in a sale and purchase agreement, there must be clarity about the goods being traded, including their specifications. It is not enough to say “will buy something” without explaining what will be purchased. If the object of the agreement is unclear, the agreement can be considered void because it does not meet the “certain thing” requirement.
Unclear Object Case Example
An example of an unclear object case can occur in a lease agreement. For example, if someone rents out a property without mentioning the specific address of the property, the lease agreement may be invalid because the object is unclear.
4. Halal Cause
The parties concerned must fulfill the fourth condition, namely the existence of a lawful cause. A lawful cause means that the purpose or intent of the agreement is not contrary to law, decency, or public order. If the purpose of the agreement violates the law, then the agreement will be null and void.
For example, agreements for the purpose of drug trafficking or other illegal activities are invalid because they lack a lawful cause. In this context, the law protects society from agreements that could harm or jeopardize public security.
Consequences of Ineligibility
When the above conditions are not met, there are two possible legal consequences:
- Revocable (Vernietigbaar)
- If the subjective conditions (agreement and capability) are not met
- The agreement remains in force until it is canceled by the interested party.
- There is a grace period to apply for cancellation
- Null and void (Nietig)
- If the objective conditions (certain things and halal causes) are not met
- The agreement is deemed never to have existed
- No need for cancelation action
Practical Implications of the Legal Terms of Agreement
Understanding the legal terms of an agreement is very important for every individual and company. In practice, many disputes arise due to a lack of understanding of these terms. For example:
- Dispute Case: The other party can cancel the agreement if one of the parties does not meet the legal capacity requirements.
- Legal Protection: By fulfilling all the legal requirements, the parties get legal protection in case of any future disputes.
- Business Continuity: For businesses, understanding these requirements helps them to draft strong business contracts and reduce the risk of disputes.
Real Case Example
As a concrete example, let’s look at a case where a young entrepreneur enters into a lease contract with a landlord to open a cafe.
- If the entrepreneur is still 17 years old (immature), then the party can cancel the rental contract because he is not capable of making an agreement.
- On the other hand, if the rental object (building) does not match the agreed specifications (e.g. size or location), then this can also be a basis for canceling the contract.
Practical Tips for Making a Legal Agreement
To ensure your agreement is legally valid, take note of the following:
- Document the negotiation and agreement process
- Confirm the identity and authority of the parties
- Describe the object of the agreement in detail
- List the rights and obligations of the parties
- Include sanctions for violations
- Determine the dispute resolution mechanism
- Involve witnesses in signing
KH Contact
Well, those are the various conditions for a valid agreement according to Article 1320 of the Civil Code. To get help in drafting a legal, strong, and binding agreement, don’t hesitate to contact Kontrak Hukum. We offer services for making various types of agreements at affordable costs, starting from Rp900 thousand! Starting from work agreements, cooperation, leases, to events, we are ready to help ensure that your agreement meets the legal aspects. What are you waiting for? Visit the
