BUSINESS LAW

SULISTIOWATI

CONTRACT LAW
Article 1313 Civil Code, a contract is an act of two or more persons binding themselves to one or more other persons.

Phase of making contract

Pra Contractual : negotiation between parties, demand and supply. Contractual : the validity of contract is obtained and contract is performed. Post Contractual : hidden defect is guaranteed ( vrijwaring ).

Validity of contract Article 1320 Civil Code

For the validity of a contract needs 4 qualifications: 1. the consent of parties; 2. a capacity to contract; 3. subject certain; 4. a lawful purpose.

Consent
The parties must consent to the basic matters contained in the contract. Contract is prior to consent. Duress, mistakes, fraud and undue influence are reason to cancel a contract.

Subject Certain
The subject must be determinable. Subject meant both of the performance: the goods and the performance. The subjet of contract are rights, services, goods.

Capacity
The parties shall have the capacity to contract. All persons legally capable of entering contracts, exept : (1) minors (persons under 21 years of age); (2) persons placed under guardianship.

Lawful Purpose
The object of contract is lawful, if it is not contrary to law/act, good morals or public policy.

Legal effect
If the first and/or second qualification is not obtained, so the contract is voidable. If the third and fourth qualification is not obtained, so the contract is null and void.

Formalities
As a general rule, no formal requirements (writing, registration, etc.) need be observed to make a contract binding. This is a consequent of Chapter II Book III Civil Code as optional law. Some exceptions to this general rule, certain contracts must be in writing and executed in the form of an authentic deed drawn by a notary or other authorized public official.

Principles of making contract Article 1338 Civil Code

1. 2. 3. 4. Consensualism; Freedom of making contract; Pacta sunt servanda; In good faith performed.

Stipulations for third persons

Basically, a contract cannot impose liability on a third person, and a third person cannot acquire rights under a contract to which he is not a party, unless he has given a mandate to stipulate in his name. Exeption: article 1317 Civil Code, contract for the benefit of a third person.

Default
Default is the fails of Debtor to do what he has promised, by: - by not doing it at all; - delaying his doing it; - doing it in a way contrary to the terms of the contract; - he does something which is prohibited by the contract.

Terms of default
Material term: mistake Formal term: summon ( a warrant issued by the clerck of District Court or a registered letter he himself prepaires.

Remedies
Specific performance; damages: expenditures, losses and interest. Dissolution.

Assisgnment of risk
Force majeur No general provisions dealing with assignment of risk in Civil Code. Article 1460 Civil Code, the risk in sale contract which has as its object a thing certain shall be borne by purchaser. Article 1545 Civil Code, if a definite goods, that has been promised to be exchanged, is obliterated not because of the fault of the owner, then the agreement is deemed void, and whose party that has accomplished the agreement, can claim the return of the goods that he has given in the exchange.

Termination
6 ways to extinguish a contract: Be determined in a contract; Be determined by law/act; Making a statement to extinguish a contract; By Judge decision Objective already achieved Consent by parties.

Termination
Article 1381 Civil Code recognizes 10 ways in which an obligation can be extinguished: - performance - certified tender plus deposit - novation - compensation - confusion - remision of debt (release) - destruction on the subject matter - dissolution - occurrence of a resolutory condition - prescription.