Competence of the Parties

In the online lending system in Indonesia, the competence of the parties is an important requirement for forming a valid agreement. Competence refers to a person's legal ability to perform legal acts, including signing online loan agreements.

According to civil law, a person is considered capable of performing legal acts if they:

  • Have reached adulthood (at least 18 years old or married).
  • Are not under guardianship.
  • Do not have mental or physical impediments that prevent them from understanding the consequences of their legal actions.

Element of Competence:

Adulthood Age:

To apply for an online loan, borrowers must be of legal age, usually at least 21 years old. Some providers may set a minimum age of 18 years. The maximum age limit for applying for an online loan usually ranges from 60 to 64 years.

Mental Ability:

Mental ability refers to the capacity to understand and make rational decisions about applying for a loan, including understanding the financial and legal consequences of the agreement. This aspect includes in-depth understanding, the ability to make appropriate decisions, risk awareness, and adequate mental health.

Legal Status:

Online loans are regulated by OJK through POJK No. 77/POJK.01/2016. Services registered and supervised by OJK are legal and recognized by law in Indonesia. The MUI states that online loans with interest are considered haram because of usury, and acts of intimidation by illegal online loan actors are not allowed.

Importance of Capacity:

Capacity is very important because agreements made by parties who are not capable can be canceled. This aims to protect parties who do not have the full ability to understand or give valid consent to the agreement.

Specific Agreement Object

The object of the agreement refers to the subject matter of the agreement itself and must meet certain criteria, be real, possible, and permissible in accordance with the general principles of agreements in the Indonesian Civil Code.

Elements of the Agreement Object:

  • Specific: The object must be clearly defined, such as the amount of money borrowed.
  • Real: The object must be concrete and identifiable.
  • Possible: The object must be legally and factually possible.
  • Permissible: The object must not conflict with laws or moral norms.

Online loan agreements must also comply with OJK regulations, including POJK No. 77/POJK.01/2016 and POJK No. 10/POJK.05/2022, which regulate information technology-based money lending services.

Importance of the Agreement Object:

An unclear agreement object or one that does not meet the above criteria may cause the agreement to be null and void or voidable. Therefore, it is important for the parties to ensure that their agreement object is clear and in accordance with legal provisions.

Halal Cause

Halal cause refers to the reasons underlying the parties to enter into an agreement and must be in accordance with the law, morality, or public order.

Element of Halal Cause:

  • Compliance with the Law: Online loans must comply with OJK regulations.
  • Decency: Must not violate norms of decency.
  • Public order: Must not disrupt public order.

The MUI states that online loans containing interest are considered haram because the interest is categorized as usury. The MUI also emphasizes that intimidation by illegal online loan actors against defaulting borrowers is not allowed.

Importance of Halal Cause:

The halal cause is very important because it is the ethical and legal basis of an agreement. Agreements with non-halal causes can be canceled or declared null and void.

Conclusion

To ensure that an online loan agreement is valid and legally binding, it is necessary to pay attention to the conditions in Article 1320 of the Civil Code. Agreement, the capacity of the parties, a specific object, and a halal cause are important foundations of any valid agreement. Thus, online loans that comply with OJK regulations and sharia principles can provide safe and legal financial solutions for the Indonesian people.