Legal Literacy - Avoid legal risks! Understand 5 legal consequences that are often overlooked when violating an agreement. Learn about compensation, cancellation, fines, and more.
Definition of Agreement
An agreement is an understanding between two or more people regarding a specific matter that is agreed upon by them. Agreements can be made orally or in writing.
Legally, agreements are regulated in the Indonesian Civil Code (KUHPerdata), specifically in Article 1313 which reads:
"An agreement is an act whereby one or more persons bind themselves to one or more other persons to do something or not to do something.."
Conditions for the Validity of an Agreement
Conditions for the validity of an agreement are regulated in Article 1320 of the Civil Code (KUHPerdata), namely:
- Agreement of those who bind themselves
- Capacity to create an engagement
- A specific matter
- A lawful cause
Types of Agreements
Types of agreements include:
- Consensual agreement: an agreement that arises solely from the agreement of the parties, for example, buying and selling, renting, and exchange.
- Real agreement: an agreement that arises from the delivery of an object, for example, borrowing and lending, and pawning.
- Formal agreement: an agreement that must be made in a specific form determined by law, for example, marriage and grants.
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