Good faith principle in Indonesian contract law: How to set the definition and its benchmarks
Vol 8, Issue 10, 2024
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Abstract
As an essential principle in contract law, Indonesia has regulated good faith in the Indonesian Civil Code (the Dutch Civil Code that the Indonesian government uses based on the principle of concordance). However, the definition and benchmarks are not yet clear. There are no further provisions regarding the meaning and concept of this principle in the Indonesian Civil Code or other regulations. This absence of a single understanding of good faith principle in contract causes different opinions and legal certainty, whether from the business actor who signs the agreement or the judge as the third party who resolves contract disputes between parties. Therefore, future Indonesian contract law needs to regulate the definition and benchmarks for good faith principle. In order to find out the meaning and clear benchmarks for the good faith principle, the authors use a normative juridical method with a statute and conceptual approach. This research finds that the definition and benchmarks for the good faith principle is possible to be developed and regulated in Indonesian contract law. It shall set that good faith principle is based on honesty, decency, and fairness, which covers every agreement stage, from pre-agreement, agreement implementation, and after the agreement is completed.
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DOI: https://doi.org/10.24294/jipd.v8i10.7358
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