DELIMITATION OF FREEDOM OF CONTRACT PRINCIPLE AND JUDGE’S CORRECTIVE FUNCTION IN ASSESSING THE PARTIES’ POSITIONS ON AN AGREEMENT

Muhammad Natsir Asnawi,Edi Hudiata

doi:10.22146/jmh.16889

Abstract

The principle of freedom of contract established for much types of contract. This principle concerned onhow parties state their mind freely into the contract clauses. The primordial concept of freedom of contractwas reduced based on Indonesian judiciary practice. This normative research of law tries to analyse theconcept alteration of meaning and implementation of freedom of contract in Indonesian Judiciary practice.The Supreme Court of Indonesia through its precedent provides broader authority to the Judges in orderto supervise and remedy the unbalance stand of parties on a contract they state which causes one or moreconsiderations cannot be or make difficulties to perform. The result of this research show us that freedomof contract principle is confined by proportionality, appropriateness, and justice principles toward partiesin a contract stated.

Highlights

The general principle of the contract law is that every party free to make a contract with a content and form agreed
The reasoning of the Supreme Court inter alia, that the principle of freedom of contract is not absolute, meaning that in certain situation, judge has the authority through the interpretation of the law to study and assess as well as declare, that the positions of the parties in a contract are in some way imbalance; one of the parties is unfree to raise his will, as if the contract concluded unilaterally
The freedom of contract is a principle which is limited by the values of justice and reasonableness toward the distribution of the rights and obligations of the parties in a contract

Summary

Introduction

The general principle of the contract law is that every party free to make a contract with a content and form agreed. The freedom of contract (contract vrijheid) gives discretion to every individual to makes a contract with another party This principle becomes the basic of all forms of contract concluded by the parties. Civil Code (KUHPerdata) is a direct implication of the existence of freedom of contract principle Because of such openness, the law gives a space at large to the parties to formulate the clauses on the contract which represent the rights and obligations (considerations) of each party. The law gives a space at large to the parties to formulate the clauses on the contract which represent the rights and obligations (considerations) of each party The formulation of such contract clauses, except as a reflection of each party’s position on the contract, sometimes creates problem of the imbalance of rights and obligation of the contract.

Discussion

Conclusion