The application of good Faith principle of precontract in common law and civil law contry

Rizky Febri Dewanti,Yudho Taruno Muryanto,Pujiyono Pujiyono

doi:10.33448/rsd-v10i16.23621

Rizky Febri Dewanti, Yudho Taruno Muryanto + Show 1 more

Open Access

https://doi.org/10.33448/rsd-v10i16.23621

Copy DOI

Abstract

In Indonesia, development of application of good faith principle in legal agreement focuses on the application of Civil Code (KUHPerdata) where scope is still placed on the implementation of agreement. It is as if Civil Code has not recognized the existence of good faith principle at pre-contract stage. In comparison, according to modern agreement theory that parties who suffer losses in pre-agreement/contract stage or at negotiation stage, their rights also deserve to be protected. Thus, pre-agreement/contract promises will have legal implications for those who violate them. This will be seen in countries that have common law and civil law systems. An important issue in this case relates to the principle of good faith at the pre-contract stage which creates a gap with the provisions in the legislation. To analyze these problems, legal research was conducted with the black-letter law paradigm. Technique of collecting legal materials in this research used library research. Legal materials are analyzed deductively and utilize the method of interpretation (hermeneutics). Results showed that the application of the principle of good faith at the pre-contract stage in Common Law and Civil Law countries had differences. In the Civil Law system, good faith is highly emphasized in the stage of contractual negotiation. Whereas in the Common Law system, it prioritizes efforts to restore rights of aggrieved party in pre-contract stage. Parties who do not have good faith at the pre-contract stage have legal consequences for cancellation of the agreement.

Highlights

IntroductionThe parties who will enter into an agreement, especially in large-scale business contracts, usually negotiate pre-contracts or preliminary contracts
The contract practice is currently more complex
Article 1339 of the Civil Code states that agreements are binding on things that are expressly stated in them, and for everything which, according to the nature of the agreement, is required by propriety, custom, or law (Agus Yudho Hernoko, 2010)

Summary

Introduction

The parties who will enter into an agreement, especially in large-scale business contracts, usually negotiate pre-contracts or preliminary contracts. Preliminary contract negotiations aim to explore various possibilities for the plan to enter into an agreement between the parties. In this stage, covenant from one party to another often appear or are conveyed in the expectation that the other party agrees to enter into an agreement as a follow-up to the negotiations. The other party who was given covenant puts expectation in the agreement marked by a willingness to take several legal actions (rechtshandeling), for example, handing over money or goods as a sign of completion. According to Oxford Dictionary: ”Negotiation is a dialogue between two or more people or parties, intended to reach an understanding”. (Homby A.S, 1984)

Methods

Results

Conclusion