Unilateral Termination of Contract: Review of Jurisprudence Number 4/Pdt/2018

By Heksa Archie Putra Nugraha

23 Jan 2024 07:49 WIB 23 January 2024 07:49 WIB 5 minutes reading time: 5 minutes 1 read

Updated: 12 Feb 2024 03:20 WIB 12 February 2024 03:20 WIB

This article discusses Jurisprudence Number 4/Pdt/2018 which contains the norm of unilateral termination of contract as an unlawful act. Furthermore, the validity of the termination of the contract will be reviewed...

Unilateral Termination of Contract: Review of Jurisprudence Number 4/Pdt/2018

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Table of Contents

The Term “Cancellation” vs “Termination”
Pros and Cons of Unilateral Termination of Contracts
Issuance of Jurisprudence Number 4/Pdt/2018
Validity of Unilateral Contract Termination

Section 2/3: The Term “Cancellation” vs “Termination”

The Term “Cancellation” vs “Termination”

In principle, Jurisprudence Number 4/Pdt/2018 contains norms regarding unilateral termination of contracts. This is because the termination is based on default. For information, there is a fundamental difference between cancellation and termination of a contract.

Cancellation of a contract means that one of the conditions for the validity of the agreement is not met, while termination of a contract means that one of the parties is in default.

The phrase “…ontbindende voorwaarde…” in Article 1266 of the Civil Code is more appropriately translated as ‘termination condition’. This inconsistency of terms can be seen in several decisions, such as Decision Number 704 K/Sip/1972 which uses the term cancellation, while Decision Number 1001 K/Sip/1972 uses the term termination.

Pros and Cons of Unilateral Termination of Contracts

Unilateral termination of contracts has been used in practice for a long time, but is considered normatively wrong. The opinion that contracts are based on provisions in the Civil Code that prohibit unilateral termination of contracts, including Article 1266 paragraph (2), Article 1267, and Article 1338 paragraph (2).

If interpreted a contrario, then according to Article 1266 paragraph (2) of the Civil Code, all forms of contract termination must go through the courts. This norm is dwingend because it contains the word 'must' in it. In addition, ratio legis of this norm is to avoid the arbitrariness of creditors in terminating contracts.

Opinions that reject unilateral termination of contracts are also based on several decisions, including Decision Number 1051 K/Pdt/2014, Decision Number 28 K/Pdt/2016, and Decision Number 5 K/Pdt/2016. Take for example the judge's considerations in Decision Number 1051 K/Pdt/2014, namely:

“That the actions of the Defendant/Appellant who has unilaterally canceled the agreement made with the Plaintiff/Appellee are qualified as unlawful acts because they are contrary to Article 1338 of the Civil Code, namely that the agreement cannot be withdrawn except with the agreement of both parties.”

On the other hand, opinions that accept unilateral termination of contracts are based on the location of Article 1266 and Article 1267 of the Civil Code in Book III of the Civil Code which is aanvullend so that it can be deviated from. In addition, if the parties have agreed on unilateral termination of the contract, then based on the principle freedom of contract, must be considered binding.

Furthermore, the waiver of Article 1266 and Article 1267 of the Civil Code constitutes a 'customarily stipulated condition' (bestandig geberuikelijkbeding) and therefore must be considered binding. Moreover, Article 265 paragraph (1) of Book 6 Nieuw Nederland Burgerlijk Wetbook (Dutch Civil Code) already accommodates unilateral termination of contracts.