How to cite:

Delycia Anwar Rannu, Gunardi Lie (2024) Application of Standard Agreements in Lease Purchase

Contracts: Legal Implications of Business in the Realm of Civil Law, (06) 04,

https://doi.org/10.36418/syntax-idea.v3i6.1227

E-ISSN:

2684-883X

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Ridwan Institute

APPLICATION OF STANDARD AGREEMENTS IN LEASE PURCHASE

CONTRACTS: LEGAL IMPLICATIONS OF BUSINESS IN THE REALM OF

CIVIL LAW

Delycia Anwar Rannu, Gunardi Lie

Universitas Tarumanagara Jakarta, Indonesia

Email: [email protected], [email protected]

Abstract

Business practices provide easy access to capital for certain goods. Hire purchase arises

when the buyer cannot afford to pay cash. Standard agreements cannot be negotiated by

consumers. In Indonesia, this practice is growing rapidly, especially in the motorbike

trade. The application of standard agreements has important implications in business

law, such as consumer protection and dispute resolution. Research on this subject is

important for identifying challenges and opportunities in modern business. This legal

research uses a normative juridical approach, which is a research method that relies on

secondary data sources, such as library materials. This normative juridical approach

involves analysis of legal principles, legal systematics, as well as vertical and horizontal

synchronization in the civil law system in Indonesia. The results of this research are that

the research highlights the importance of understanding the business practices of hire

purchase contracts, especially the application of standard agreements and their legal

implications. This raises questions regarding the balance of rights and obligations

between providers and recipients of goods or services. It is important to understand the

legal framework to ensure equality of rights and obligations and maintain the principles

of consumer protection and public order in this business practice.

Keywords: Business Law, Business, Consumers

INTRODUCTION

With rapid economic growth, there has been a significant increase in business

practices that offer easy access to capital to obtain certain facilities (Abdeldayem,

Aldulaimi, & Kharabsheh, 2021). This phenomenon is reflected in the various efforts

offered by business actors to help people meet their needs for certain goods. Business

actors, both individuals and legal entities, compete to attract consumers by providing

convenience in obtaining the goods they want. They realize that public interest is high,

but are often constrained by financial problems (Weisbrod, Handler, & Komesar, 2023).

Therefore, business actors use rental purchase institutions as an alternative to facilitate

consumers, which is expected to be simpler than the procedures and conditions imposed

JOURNAL SYNTAX IDEA

p–ISSN: 2723-4339 e-ISSN: 2548-1398

Vol. 6, No. 04, April 2024

Application of Standard Agreements in Lease Purchase Contracts: Legal Implications of

Business in the Realm of Civil Law

Syntax Idea, Vol. 6, No. 04, April 2024 1931

by traditional financial institutions such as banks (Tebbens, 1979; van der Velden,

Contino, Muffels, Verheijen, & Das, 2023).

The emergence of the practice of leasing purchase first emerged as a solution to

overcome a situation where sellers are faced with high demand to buy their goods, but

prospective buyers cannot afford to pay in cash. The seller is willing to accept payment

in installments or installments, but on condition that the item will not be sold to another

party before full payment is made. This phenomenon encourages the formation of Lease

Purchase Agreements by business actors. The agreement is the result of a transaction

between the producer and the consumer, where basically, the form and content of the

agreement have been determined by the producer beforehand. The consumer has no

opportunity to bargain or change the content or terms of the agreement. This type of

agreement is known as a standard agreement (Subekti, 1976)

The content that has been stipulated in the standard agreement includes models,

formulations, and measures. Within the sphere of trade, one of the known types of

agreements is the "Lease Purchase Agreement", which arose in response to a growing

need in society. In Indonesia, the practice of lease purchase agreements has developed

rapidly, especially as seen from the public's interest in using these agreements to meet

their secondary needs. Both manufacturers (sellers) and consumers (buyers) engage in

this practice, which often occurs in the motorcycle trade. It can be said that lease

purchase agreements are growing and thriving in Indonesia (Ackerman & Porter, 2022;

Muhammad, 1992).

In business practice, standard agreements in lease purchase contracts have become

commonplace. This agreement is an integral part of the business transaction between the

provider and the recipient of goods or services. However, the application of standard

agreements in lease purchase contracts presents a number of relevant implications in the

context of business law, especially in the realm of civil law.

The importance of understanding the legal implications of using standard

agreements in lease purchase contracts lies in the need to maintain a balance and clarity

of rights and obligations between the parties involved. In this context, a deep

understanding of the legal framework governing lease purchase contracts is crucial. The

implications of implementing standard agreements can also affect business aspects such

as consumer protection, legal liability, and dispute resolution.

Therefore, research on the application of standard agreements in lease purchase

contracts and their implications for business law in the realm of civil law has significant

relevance in the context of modern business practice. By understanding the dynamics

and changes in the practice of lease purchase contracts, as well as their impact on

business law, we can identify emerging challenges and opportunities, and develop

appropriate legal frameworks to address them.

RESEARCH METHODS

This legal research uses a normative juridical approach, which is a research

method that relies on secondary data sources, such as literature materials. This

Delycia Anwar Rannu, Gunardi Lie

1932 Syntax Idea, Vol. 6, No. 04, April 2024

normative juridical approach involves an analysis of legal principles, legal systematics,

and vertical and horizontal synchronization in the civil law system in Indonesia. In this

way, this study examines the legal norms contained in applicable laws and regulations,

especially in the context of the standard agreement in the lease purchase agreement and

its legal impact in case of default by the buyer (Field, 2016)

RESULTS AND DISCUSSION

An agreement is an agreement between two or more persons that is legally

enforceable. Factors influencing the development of treaty law in Indonesia are

primarily progress in trade. The growing variety of trade transactions gave rise to

different types of agreements made by the community.

A standard agreement is a written agreement in the form of a form that has been

standardized by producers without considering individual consumer differences (Tri

Purwani, Harto Listijo, Ika Listyawati, 2024). The use of standard agreements is

increasingly common in trade to facilitate the transaction process. Sutan Remy

Sjahdeini argues that the standard agreement arose because of the needs of the

community over the past eighty years (Badrulzaman, 1994).

In standard agreements, the economically weaker party often simply accepts the

stipulated terms without being able to change them. Standard contracts not only include

clauses that have been prepared in advance by business actors in documents that bind

consumers, but also their forms. Standard clauses in consumer transactions are rules or

conditions that have been set by business actors and must be obeyed by consumers

according to the Consumer Protection Law (Poernomo, 2019).

Article 1 point 10 of the Consumer Protection Law emphasizes that the standard

clause highlights the manufacturing procedure carried out by business actors, not the

content. This manufacturing process is closely related to the terms of the validity of the

agreement, namely the agreement of the parties to be bound by it, as stipulated in

Article 1320 B.W. The agreement to be bound by a matter is the main condition for the

existence of the agreement. If the parties have agreed on an agreed matter, they will be

bound by the agreement based on the principle of consensualism. This principle is also

related to freedom of contract, where a person has the freedom to enter into agreements

with others on terms or contents set by that party (Njatrijani, 2017; Wahyu Avianto,

Hermanto Siregar, Anny Ratnawati, 2024).

Indicator Klausula Baku includeing (Fuadi, 2001) :

- The content is determined unilaterally by the creditor who has a stronger position

than the debtor.

- The debtor has no contribution in determining the content of the agreement.

- The debtor accepts the agreement out of necessity or compulsion.

- The form is written.

- Prepared in advance in bulk or individually.

Form of agreement with standard clauses, also known as standardized contract, pad

contract, standard contract, or contract of adhesion.

Application of Standard Agreements in Lease Purchase Contracts: Legal Implications of

Business in the Realm of Civil Law

Syntax Idea, Vol. 6, No. 04, April 2024 1933

The background to the emergence of lease purchase was first to address problems

related to how to provide solutions when sellers face a lot of demand to buy their goods,

but prospective buyers cannot afford to pay the price in cash. The seller is willing to

accept payment in installments or installments, but requires a guarantee that the goods

will not be sold again before the price is paid off.

In addition, the background of the birth of the lease purchase contract is also related

to the principle of freedom of contract as stipulated in Article 1338 paragraph (1) of the

Civil Code. This article gives freedom to the parties to make or not make a contract,

enter into a contract with anyone, determine the substance, performance and terms of

the contract, and determine the form of the contract, whether oral or written. This

principle of freedom of contract provides an impetus for entrepreneurs to develop

businesses through lease purchase contracts, considering the socioeconomic conditions

of people who tend to have limited cash funds (Salim Hs, 2019).

Experts have different views on the definition of lease purchase, which is then

divided into 3 kinds of definitions:

1) According to this view, lease purchase is defined as buying and selling with an

installment payment system. This means that even if the buyer has already paid part

of the price of the goods, the goods do not fully belong to him until the last payment

is made. Only after the final payment, the buyer will have full ownership rights to the

goods.

2) The second definition describes lease purchase as a form of lease with purchase

options. That is, the tenant (buyer) can use the rented goods by paying a certain

amount of money every certain period. However, the renter also has the option to

purchase the item after several rental periods (Subekti & Tjitrosudibio, 2001).

3) The third definition states that lease purchase is a combination of sale and purchase

and lease. In this case, the lease purchase contract has elements of both types of

contracts. For example, the buyer can use the item by paying rent, but ultimately has

the option to purchase the item after full payment is made. It describes the transition

of the status of goods from lease to ownership after the last payment (Salim Hs,

2019)

Regarding the legal basis of lease purchase agreements in Indonesia, two important

points became the basis for the jurisprudence of the Supreme Court on December 16,

1957 and the Decree of the Minister of Trade and Cooperatives Number 34 / KP / II /

80. In the case of N.V. Handelsmaatschappij Auto against Jordan, the Supreme Court

gave an interpretation that strengthened the legal framework for the lease purchase

agreement. Meanwhile, the Decree of the Minister of Trade and Cooperatives regulates

the legal aspects of the practice of leasing purchases, detailing the procedures and rules

to be followed.

The subject matter in the lease purchase agreement involves two main parties,

namely the creditor (seller of the lease purchase) and the debtor (tenant of the purchase).

Creditors are usually companies or businesses that produce goods or that are specifically

Delycia Anwar Rannu, Gunardi Lie

1934 Syntax Idea, Vol. 6, No. 04, April 2024

engaged in lease purchase agreements. On the other hand, a debtor is an individual or

entity that acquires goods through a lease purchase system.

Goods that can be bought and sold must meet certain criteria, including that they

are new durable commercial goods and have not undergone technical changes. Although

the origin of the goods can be from own production or from other domestic production,

provided that the goods meet these requirements.

The rights and obligations of each party to the lease purchase agreement are also

regulated. The purchase tenant (creditor) has the right to receive installment payments

from the debtor, while his obligations include giving the goods to the debtor, taking care

of the return of the name of the goods (if applicable), extending the vehicle registration

and vehicle tax (if needed), and taking good care of the rental goods. On the other hand,

The debtor has the right to receive the leased goods after the last repayment and the

obligation to take care of the leased goods at his own expense and pay installments on

time.

A lease purchase agreement is a type of agreement that does not have a specific

name (contract innominate). In addition to being regulated in the Nominal Contract

Law, this kind of agreement is also regulated in Book III of the Civil Code.

In Book III of the Civil Code, there is only one article that regulates the contract of

innominate, namely Article 1319 of the Civil Code which states that "All agreements,

both those with special names and those not known by certain names, are subject to the

general rules contained in the previous chapter."

Article 1338 of the Civil Code is a very important basis in making contracts outside

the written provisions in the Civil Code. This article states that "All agreements validly

made shall be valid as law to those who make them." This means that every agreement

is binding on the party making it, grants the rights set out in the agreement, and sets out

the obligations to be performed.

In making an agreement, it is important to pay attention to the terms of validity of

the agreement, which consists of four conditions as stipulated in Article 1320 of the

Civil Code:

1. There is an agreement from the parties bound by the agreement.

2. Legal capacity to make agreements.

3. The existence of a certain object that is the substance of the agreement.

4. There is a lawful reason to make the agreement.

Innominaat agreements arise because of the principle of freedom of contract, but

this freedom remains limited by law, public order, decency, and decency. Therefore, the

legal principles applicable to innominaat contracts also follow the principles listed in

Book III of the Civil Code. Thus, the basis of the innominaat contract is the principle of

freedom of contract stipulated in Article 1338 of the Civil Code.

The principles of innominaat contract law follow the principles stated in Book III of

the Civil Code, especially the principle of freedom of contract stipulated in Article 1338

of the Civil Code. That is, the basis of the innominaat contract is freedom to contract,

but it is limited by legal principles, such as law, public order, decency, and decency.

Application of Standard Agreements in Lease Purchase Contracts: Legal Implications of

Business in the Realm of Civil Law

Syntax Idea, Vol. 6, No. 04, April 2024 1935

Although there is no law specifically regulating lease purchase or lease purchase,

such agreements are still applied in society as long as they comply with the principles of

freedom of contract and do not violate laws, decency, and public order. Lease purchase,

which is a unique form of agreement, cannot be equated with a sale and purchase

agreement or lease, although it has the characteristics of both.

A lease purchase agreement can be likened to the sale and purchase of a particular

object, where the seller sells the goods taking into account any payment made by the

buyer with repayment of the price of the goods agreed in the agreement. Title to the

goods is only transferred from the seller to the buyer after the price of the goods is paid

in full by the buyer to the seller.

The background to the emergence of the lease purchase agreement for the first time

was to respond to problems that arose because most prospective buyers could not afford

to pay the amount of money in cash. Thus, lease purchase contracts emerged as an

alternative to overcome the limitations of people's purchasing power and the narrowing

of the industrial goods market.

In addition, the background of the birth of the lease purchase contract is also driven

by the principle of freedom of contract. However, various lease purchase contracts often

do not specify exactly when the lease purchase agreement occurs.

If we refer to Article 1320 of the Civil Code, the momentum of a lease purchase

contract is when there is an agreement between the lease purchase seller and the lease

purchase buyer. There is no provision that requires the lease purchase agreement to be

in writing. Agreements, including lease purchase agreements, can be oral or written.

However, the existence of a written agreement can help prevent possible violations or

defaults. Therefore, it is advisable to make a lease purchase agreement in writing, either

by notarial deed or deed under hand, in order to provide security for all parties involved.

In all lease purchase agreements, it is agreed that the ownership of the goods will be

transferred on the day of payment of the last month's rent or upon repayment of the

price of the goods before the specified deadline. As long as the price of the goods has

not been paid in full, the goods remain the property of the seller, although proof of

ownership of the goods may be in the name of the buyer. This clause reflects the

precautionary attitude of the seller towards the possible transfer of rights to the leased

goods.

At the moment when both parties sign the letter of agreement, the lease purchase

agreement is considered to be formed. Usually, no testimony from several witnesses is

required, and a minimum stamp of Rp.6000 is usually affixed to the letter of agreement

to strengthen its legal force. Although a lease purchase agreement is not the same as a

sale and purchase or lease, it is a combination of the two, in which the parties exercise

their rights and obligations in accordance with previously agreed terms.

An example of the application of a lease purchase agreement in Indonesia is when

someone wants to buy a house through a lease purchase scheme. In this case, the buyer

pays the down payment first, followed by installment payments or installments until

paid off.

Delycia Anwar Rannu, Gunardi Lie

1936 Syntax Idea, Vol. 6, No. 04, April 2024

By paying a down payment, title to the house has not been transferred, even though

the house is already occupied or controlled by the rental buyer. Rental buyers are

required to maintain and maintain the house during the installment payment process.

Title to the new house will transfer to the rental buyer after the last installment payment

is made and the price of the goods is paid off. That's when the rental seller will submit

proof of ownership of the house to the rental buyer.

In this context, a lease purchase can be thought of as a mixed agreement that

combines elements of sale and purchase and a lease agreement. As long as the price of

the goods has not been paid in full, the title to the goods remains with the seller of the

lease, even though the goods are already in the hands of the rental buyer. The new title

will be transferred from the seller of the lease to the buyer of the lease after payment of

the last installment to settle the price of the goods (Bawarodi, 2014).

Marhainis Abdulhay describes default as when parties who should have fulfilled

their obligations do not do so. The legal consequence of default is that the agreement

does not need to be called for cancellation, because it is automatically null and void.

However, Article 1266 paragraph 2 confirms that the legal effect of default does not

directly cause cancellation, but must be requested cancellation by a judge. Articles from

1244 to 1252 of the Civil Code provide for compensation for default, which includes the

payment of actual losses, costs incurred, as well as the right to sue for loss of potential

profits. Further, the options for further prosecution are provided for in Article 1267 of

the Civil Code.

The termination of a contract signifies the end of the agreement between two

parties, namely the creditor (the party entitled to the performance) and the debtor (the

party obliged to fulfill the performance). This concept can be applied to different types

of agreements such as sale and purchase, accounts receivable, or lease. In the draft

contract law, the process of termination of the contract is regulated in detail in articles

such as Article 7.3.1 to Article 7.3.5. The articles include the right to terminate the

contract, notice of termination, anticipation of non-performance, warranty against non-

performance, and effect of termination in its entirety. Article 7.3.1 gives the right to

terminate the contract when the failure to fulfill the obligations under the contract

reaches a fundamental level (Salim Hs, 2019)

The expiration of the lease purchase contract may occur in the following situations::

1. The final payment has been settled.

2. The second party (the tenant buyer) dies and there are no heirs to carry forward

the contract.

3. The buyer went bankrupt, and the vehicle was impounded.

4. There is a seizure by the rental seller against another party because the buyer has

transferred the object of the lease purchase to another person.

5. One of the parties breaches the contract (default).

6. A court ruling has been issued.

7. Criminal acts such as fraud, destruction, or embezzlement occur.

8. Third parties commit unlawful acts.

Application of Standard Agreements in Lease Purchase Contracts: Legal Implications of

Business in the Realm of Civil Law

Syntax Idea, Vol. 6, No. 04, April 2024 1937

The implementation of the lease purchase contract cannot be separated from these

legal consequences. In practice, the errors or omissions of either party may result in

legal liability. The lease purchase agreement binds both parties to fulfill the agreed

obligations.

However, sometimes one of the parties does not fulfill the agreed obligations. It

should be borne in mind that there is currently no specific Law regulating rental

purchase contracts in detail. Therefore, the contract expiration process can be adjusted

to the agreement of both parties.

Possible ways to terminate the contract include payment of the last installment,

death of one party without heirs passing on, confiscation of goods leased by the seller to

the other party, or permanent court judgment.

In execution, contracts may fail or be imperfect due to fault or external forces. This

condition of non-performance of the contract is called default, which is the non-

fulfillment of obligations that should be carried out in accordance with the contract.

The consequences of default can be described as follows:

1. Engagement obligations remain: Despite any delay in fulfilling the performance,

the creditor still has the right to demand the performance of the performance

from the debtor. The creditor is also entitled to claim damages for the delay.

However, the withdrawal of goods by the rental seller from the rental buyer must

be carried out in accordance with applicable legal procedures, taking into

account the principles of fairness.

2. The debtor must pay compensation to creditors: Article 1243 of the Civil Code

stipulates that debtors who commit defaults must pay compensation to creditors.

3. The burden of risk passes to the debtor: If an obstacle arises after the debtor

defaults, then the risk of loss is transferred to the debtor, unless the creditor acts

with grave error or willfulness.

4. Creditors can exempt themselves from providing counter-performance: If the

initial agreement is reciprocal, creditors can exempt themselves from the

obligation to provide counter-performance using Article 1266 of the Civil Code.

Damages may arise due to default or tort. Default is regulated in Book III of the

Civil Code, while unlawful acts are regulated in Article 1365 of the Civil Code. Default

can be in the form of not fulfilling overall achievements, delays in fulfilling

achievements, or improper implementation of achievements. The defaulting debtor must

pay compensation for costs, losses, and interest suffered by the creditor. The law

specifies that the debtor must first be declared in a state of negligence before the

indemnity obligation can be imposed.

The creditor has the right to demand payment of installments that are not fulfilled

by the rental buyer. If the lease buyer does not fulfill his obligations, including timely

payment of installments, then it is considered a default. In this case, the creditor can

demand fulfillment of the agreement, fulfillment of the bond, and compensation for

costs and interest.

Delycia Anwar Rannu, Gunardi Lie

1938 Syntax Idea, Vol. 6, No. 04, April 2024

CONCLUSION

The conclusion of this study highlights the importance of a deep understanding of

the business practices of lease purchase contracts, especially in the context of the

application of standard agreements and their legal implications in the realm of civil law.

The business practice of lease purchase contracts, which is increasingly common in

Indonesia, has raised questions about the balance of rights and obligations between

providers and recipients of goods or services.

The application of standard agreements in lease purchase contracts has significant

implications in the context of business law, with expanded discussions on consumer

protection, legal liability, and dispute resolution. The importance of an in-depth

understanding of the legal framework governing lease purchase contracts is crucial in

ensuring equal rights and obligations between both parties.

From this research, we also gain a better understanding of the legal aspects

associated with lease purchase contracts, such as the role of standard agreements, the

contract termination process, and the legal consequences of default. Although there is

no law that specifically regulates lease purchase contracts, this study provides a clear

picture of the legal framework governing this practice in Indonesia.

In addition, the study underscores the importance of freedom of contract in the

business practices of lease purchase contracts, while still paying attention to legal

principles governing consumer protection and public order. With a better understanding

of the dynamics and changes in the practice of lease purchase contracts, as well as their

impact on business law, we can identify emerging challenges and opportunities, and

develop appropriate legal frameworks to address them.

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