The Breach of Contract/Default and Inevitable Circumstance or Force Majeur
A. The Breach of Contract or Break a Promise/ Wanprestasi/Default and Inevitable Circumstance or Force Majeur
a. Definition of Breach of Contract or Break a Promise/ Wanprestasi
Breach of contract or break a promise or in Indonesian Language is wanprestasi means negligence, default, failure to fulfill obligations in the contract. Thus, breach of contract or break a promise / wanprestasi is a condition in which a debtor (indebted) doesn’t fulfill or doesn’t perform achievements as stipulated in a contract. Breaching of contract (negligence) can arise because:
- Deliberateness or negligence of the debtor himself;
- Force majeur/ inevitable happening (overmacht).
b. Types of Breaching of contract
There are four types of debtor who can be said to have breach of contract, namely:
- The debtor does not meet any achievements at all;
- The debtor has met the performance, but not as it should have been;
- The debtor meets the achievements, but was not on time;
- The debtor meets the achievements, but does what is prohibited in the contract.
c. Breach of Contract Occurrence
In general, a breach of contract occurs when the debtor is declared to have been negligent in fulfilling his performance, or in other words, a breach of contract exists if the debtor cannot prove that he has committed the breach of contract beyond of his fault or due to compelling/inevitable circumstances. If a grace period is not determined in the implementation of fulfillment, it is deemed necessary for a creditor to warn / reprimand the debtor so that he fulfill his obligations. This warning is also known as warning letter or somasi.
In the event that the grace period for fulfilling the achievements has determined, then according to Article 1238 of KUHPerdata (the Indonesia Civil Code), the debtor is deemed negligent by the time specified. Warning letters/somasi must be submitted in writing explaining what is being demanded, on what basis, and at what time the achievement is expected. This is useful for creditors if they want to sue the debtor in court. In this lawsuit, the warning letters becomes evidence that the debtor has actually committed a breach.
There is no need for a warning or a reprimand, if the person in debt at one point in time can automatically be considered negligence. For example, in the case of a contract to make the wedding dress, but on the wedding day, the dress has not finished. In this case, even though the achievement was made by the debtor but not according to the contract, the performance itself could be considered as negligence. Sometime, in the contract itself has decided, when or in what cases the debtor can be considered negligent. There is no need for a warning or somasi here.
d. The Consequences of the Breach of Contract
As a result of default by the debtor, it can cause losses for creditor. There are four types of sanctions or legal consequences for debtors who breach, namely:
- The debtor is required to pay compensation suffered by the creditor (Article 1243 KUHPerdata /Indonesia Civil Code).
- Cancellation of the agreement is accompanied by payment of compensation (Article 1267 KUHPerdata/Indonesia Civil Code).
- Transfer of risk to the debtor since the time of breach (Article 1237 paragraph 2 of KUHPerdata/ Indonesia Civil Code).
- Payment of court fees if litigated before the judges (Article 181 paragraph 1 HIR).
Besides that, in a reciprocal agreement (bilateral), the breach of one party gives the other party the right to cancel the agreement. In such case the cancellation must be requested to the judges. This request must also be made, although the conditions for cancellation regarding non-fulfillment of these obligations are stated in the agreement. If the conditions are not stated in the agreement, the judges are free according to the circumstances, at the request of the defendant, to give a period of time for the opportunity to fulfill his obligations, which period may not be more than one month (Article 1266 of Indonesia Civil Code).
In accordance with the provisions of Article 1267 of the Indonesian Civil Code, in the event that a debtor is in breach, the creditor can choose his rights claims in the form of:
- Fulfillment of the agreement.
- Fulfillment of the agreement accompanied by compensation.
- Compensation only.
- Cancellation of the agreement.
- Cancellation of the agreement is accompanied by compensation.
The obligation to pay compensation for the debtor can be carried out if the creditor has met four conditions, namely:
- The debtor has indeed been negligent in breach of contract.
- The debtor is not in compelling/inevitable circumstances.
- The absence of any defense from the debtor to immobilize claims for compensation.
- The creditor has issued warning letters or somasi.
e. Defense of Debtor who Breach
A debtor who is accused of negligence and who is asked to be punished for his negligence, can defend himself by proposing several reasons to free himself from these punishments. There are three kinds of defense, namely:
- Declare that there is compelling/inevitable circumstance (overmacht).
- Declare that the creditor has been negligent.
- Declare that the creditor has given up his / her rights.
B. Compensation for Breaching
a. Definition of Compensation
Compensation of costs, losses and interest due to non-fulfillment of an agreement will then begin to be obliged if the debtor, after being declared negligent in fulfilling the agreement, continues to neglect it, or something that must be given or made, can only be given or made within a grace period that has passed (Article 1243 of Indonesia Civil Code). Therefore, basically, compensation for damages is compensation for losses arising from the debtor in breach.
b. The elements of Compensation
According to the provisions of article 1246 of Indonesia Civil Code, compensation consists of three elements, namely:
- Costs, namely all expenses or expenses that have actually been incurred.
- Loss, namely losses due to damage to the goods which belong to the creditor due to negligence of the debtor.
- Interest, namely the profit that should be obtained or expected by the creditor if the debtor was not negligent.
c. Limitations Regarding Indemnity/compensation
Basically, not all losses can be compensated. The law provides that the losses that must be paid by the debtor to the creditor as a result of breach:
- Foreseeable losses when the contract was made. According to article 1247 of the Civil Code, the debtor is only obliged to pay compensation that is evident or was supposed to be suspected at the time the contract was made, except if the non-fulfillment of the agreement was due to deception committed by him.
- Losses as a direct result of the breach. According to article 1248 of Indonesia Civil Code, if the contract is not fulfilled due to the deceit of the debtor, the payment of compensation is simply about the loss suffered by the creditor and the profit lost to him, only consists of what is a direct result of not fulfilling the contract.
C. Compelling/Inevitable Circumstance/Force Majeur
a. Definition of Compelling/Inevitable Circumstance/ Force Majeure
The Compelling/Inevitable Circumstance/ Force Majeure is interpreted differently according to scholars, including:
- According to Mr. Prof. Subekti, S.H., an Inevitable Circumstance is an excuse to be exempted from the obligation to pay compensation.
- According to Mr. Abdulkadir Muhammad, S.H., an Inevitable Circumstance is a condition where the debtor’s achievements cannot be fulfilled because an event occurs not because of his fault, which events cannot be known or cannot be expected to occur at the time of making the contract.
- According to Mr. R. Setiawan, S.H., an Inevitable Circumstance is a condition that occurs after a contract was made, which prevents the debtor from fulfilling his performance, where the debtor cannot be blamed and does not have to take risks and cannot predict when the agreement was made. All of this is before the debtor is negligent in fulfilling his performance at the time the situation arises.
Therefore, it can be concluded, that in this Inevitable Circumstance, the debtor cannot be blamed for the failure to implement an agreement or the delay in the implementation of an agreement. Because, this situation arises beyond the willingness and ability or the expectation of the debtor, and therefore, the debtor cannot be punished or subject to sanctions.
b. The Elements of the Compelling/Inevitable Circumstance/Force Majeur
The elements contained in that are:
- Not fulfilled with achievement, due to an event that destroy or exterminate the object of the contract. It is always constant.
- The achievement cannot be fulfilled because of an event that hinders the debtor’s actions from achieving. This can be permanent or temporary.
- The event cannot be known or expected to occur at the time of making the contract, either by the debtor or by the creditor. So, not because of the fault of the parties, especially the debtor.
c. Regulation of the Inevitable Circumstance in Indonesia Civil Code
In the Civil Code, the matter of Inevitable Circumstances is regulated in Article 1244 and Article 1245 of Indonesia Civil Code. But the two articles that regulate this Inevitable Circumstances only act as a defense of the debtor to be exempted from paying compensation if the debtor does not fulfill the contract due to a condition which Inevitable Circumstances, the provisions of the two articles are:
- According to Article 1244 of Indonesia Civil Code, if there is a reason for this, the debtor must be punished with compensation for expenses, losses and interest if he is unable to prove that that it’s not or at the valid time to do the contract, was due to an unforeseen or unexpected event, can be accounted for to him, even all of that if bad faith is not on his side.
- According to Article 1245 of Indonesia Civil Code, there is no cost of loss and interest, must be replaced, if due to Inevitable Circumstances or because of an accidental incident the debtor is unable to give or do something that is required, or because the same things have committed a prohibited act.
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P.N.H. Simanjuntak, S.H., 2016, Hukum Perdata Indonesia, Prenadamedia Group, Jakarta.