Business Transaction Without Contract

In the business transaction, the parties usually make a written agreement to anticipate if there is a dispute in the future related to business transaction, where the written agreement aims to protect the rights of the parties if one party defaults.

Usually, commercial disputes occur due to negligence of one party, either regarding payment or work that is not in accordance as promised. If so, then the parties will strictly hold to the written agreement that was ever signed.

The term of consent, agreement, or contract basically same because referred to legal basis as stipulated on Civil Code Article 1320:

In order to have valid consent, should be fulfilling four requirements:

  1. mutual consent which bind parties
  2. capability to make an agreement
  3. specific object
  4. not violates against the law

These requirements are basic requirements to make an agreement, however the parties may stipulated other this as long as not violates or reduces the requirements.

Then, what if the parties did not make a written agreement to run their business transaction? Or in the other hand, they did not stipulate into certain document i.e agreement.

Basically every consent which made by parties should be based on consciousness both parties or not in a depressed situation or condition, intimidation, or lack of consciousness (seriously ill, hypnotized, etc). In full awareness (normal situation) the parties can understand each other’s goals which are then specifically regulated.

Agreement is not only interpreted in the form of signing on document (agreement), but agreement may be manifested in a meeting, phone call, chatting, email, or another communication media as long as such thing may be proved accurately and valid.

For example, if someone buys a cellphone through an online store, then usually the prospective buyer will first ask the details of the cellphone to be purchased, then the seller will answer the availability of the stock. Furthermore, the seller explains the availability of stock and asks for payment, then the buyer transfers payment according to the requested price. This is where an agreement has taken place, where there is a request and payment that all communication and proof of payment will be a series of agreements. This is where the agreement found its form flexibly and randomly, which later would require a thorough and detail verification to formulate the “agreement”.

Furthermore, the injured party can file a lawsuit to the court, surely the option of the lawsuit can be in the form of default or unlawful actions depending on the legal proposition or evidence which will submitted later. But if it is based on an agreement, then of course the lawsuit is about default.

The evidence that will be submitted to the court must refer to the regulation in the civil procedural law, which is stated in Article 164 HIR, namely:

  1. Written evidences (letter)
  2. Witness
  3. Presumption
  4. Recognition
  5. Oath

In the era of digital technology, e-mail and conversation evidence can also be categorized as written evidence as long as the verification process is submitted properly according to applicable regulations, in the other hand there are no manipulations or violations against procedures. However, especially for hidden audio/video recording cannot be used as evidence because it can violate the provisions of Law No. 19 of 2016 concerning Amendments to Law No. 11 of 2008 concerning Electronic Information and Transactions.

Thus, it is strongly recommended for potential buyers (especially expensive items) to properly maintain any form of communication or documents relating to the transaction to anticipate legal risks that may arise in the future.

author: Wilopo Husodo

Published by Husodo & Partners

contact@husodolawfirm.com

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