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 3/3: Issuance of Jurisprudence Number 4/Pdt/2018

Issuance of Jurisprudence Number 4/Pdt/2018

Amidst the uncertainty regarding unilateral termination of contracts, the Supreme Court issued a new norm through Jurisprudence Number 4/Pdt/2018, stipulating that unilateral termination of contracts constitutes an unlawful act. This is because since 2014, the Supreme Court has consistently applied this legal stance. In addition, it is certainly expected that judges will adopt the same legal stance in similar cases.

However, this hope was dashed when the judge in Decision Number 5 K/Pdt/2018 stated that termination of the agreement did not constitute an unlawful act because the necessary steps had been taken. The considerations were as follows:

“That before the Defendant in Convention terminated the contract …, the Defendant in Convention had attempted to overcome obstacles in the field, and furthermore, the Defendant had issued warnings to the Plaintiff in Convention, but the Plaintiff in Convention was unable to implement them …, thus, the Defendant in Convention cannot be said to have committed an unlawful act in terminating the contract.”

Validity of Unilateral Contract Termination

Basically, Indonesia is not a country that adheres to acommon law system , so jurisprudence should only be used as a guide by judges in deciding cases. In addition, when using comparative studies, many international contract provisions have adopted unilateral contract termination. Unilateral contract termination can be said to be valid if it meets the existing conditions.

The conditions for terminating a contract unilaterally boil down to four, including one party committing a breach of contract, the breach of contract must be serious, the parties must have positively regulated the right to unilaterally terminate the contract, and there must be notification to the party who is in default that the creditor chooses to terminate the contract unilaterally. Regarding the level of seriousness of the default, it can be assessed using the lens of the principle of proportionality and the doctrine of fundamental breach.