Standard Agreements in Home Ownership Credit Agreements as an Formulation of Implementation of the Principle of Freedom of Contract in Karanganyar District, Indonesia

Abstract

Purpose: The foundation of home ownership credit is a credit arrangement that incorporates the principle of freedom of contract and is created by banks acting as creditors and customers acting as debtors. Typically, the agreement takes the form of a standard agreement that the bank has created and is presenting to the client for approval. Methods: This research is empirical legal research that is descriptive in nature. This study uses a qualitative method, which is a way to analyze the findings of studies that generate descriptive analytical data. Results and Conclusion: The concept of freedom of contract is implemented through standard contracts. Actually, the purpose of the standard agreement was to facilitate the customer's ability to apply for credit or financing from banks right away. However, many of the rights of customers are unaddressed as a result of the banks creating boilerplate agreements. Research implications: Therefore, in order to create a fair contract, it is necessary to evaluate banks' application of the principle of contractual freedom in loan contracts. Furthermore, the usual agreement provides both parties who guarantee with a kind of legal protection. The normal agreement that the Bank makes in its capacity as a creditor is one-sided and does not give the customer's rights much consideration. Originality/value: All of the rights that consumers should be able to get are not, however, covered by this legal protection. Consequently, banks must incorporate the freedom of contract principle into credit agreements.