Legal Literacy - Have you ever lost an item in a parking lot? Surely you have seen the sentence "Any form of loss is not the responsibility of the parking management" on the parking ticket. But, is that sentence valid? Is the parking manager allowed to include such a sentence?
Let's discuss together about standard agreements that contains exoneration clauses, such as the sentence on the parking ticket.
Before discussing further, let's first understand the basics of agreements, such as the definition of an agreement and the conditions for its validity.
Definition of Agreement
An agreement is an arrangement made by two or more parties, either orally or in writing, to bind themselves to each other and to do something. This agreement contains written or oral agreements that are approved by all parties and must be adhered to.
An agreement can also be interpreted as a legal relationship regarding property between two parties. One party promises or is deemed to promise to do something, and the other party has the right to demand the fulfillment of that promise.
According to Article 1313 Civil Code, an agreement is a legal relationship between two legal subjects (persons or legal entities) in the field of assets. One legal subject has the right to performance (fulfillment of a promise), and the other legal subject is obliged to carry out the performance in accordance with the agreement.
As a contract, an agreement has legal consequences that bind the parties. The legal basis for agreements is regulated in the Civil Code.
Validity Requirements of an Agreement
The conditions for a valid agreement are regulated in Article 1320 of the Civil Code. These conditions are:[1]
- Agreement of the parties
- The capacity of the parties
- The intention to create legal consequences
- A specific matter
- A lawful cause
Standard Agreement
Although in principle, based on the principle in Article 1338 of the Civil Code, everyone can make an agreement with the agreed will, or in a simpler sense, this principle is referred to as the principle of freedom of contract.[2] Under the provisions of Article 1338 of the Civil Code, there are almost no transactions that cannot be carried out because each party can carry out transactions according to their own will, including all forms of modern transactions that are not or have not been accommodated in the prevailing laws and regulations.
However, the flexibility of Article 1338 of the Indonesian Civil Code raises issues regarding protection against the creation of unbalanced agreements. In an agreement made between a creditor and a debtor, for example, the debtor often has no choice but to accept an agreement presented by the creditor, even though the various clauses contained therein are very unfavorable to the debtor. Such an agreement is called a standard agreement.
A standard agreement is an agreement made and determined unilaterally by a business actor to be offered to consumers en masse. This agreement is usually printed and ready to be signed by the consumer.
Types of Standard Agreements
- An adhesion contract is an agreement presented by one party to another, where the weaker party only has the option to accept or reject the agreement in its entirety.
- A standard agreement is an agreement made by a specific institution and intended for parties who wish to carry out certain transactions.
- A company regulation is an agreement made by a company to regulate the relationship between the company and its employees.
Characteristics of Standard Agreements
- Made unilaterally
- Offered to consumers en masse
- The contents are already printed and cannot be changed
- Consumers only have the option to accept or reject the agreement in its entirety
Legality of Standard Agreements
Although it can potentially create problems regarding protection for the maker of the agreement, standard agreements are still allowed and valid as long as they meet the legal requirements of an agreement as previously mentioned. Then what about standard agreements that contain exoneration clauses?
Definition of Exoneration Clause
An exoneration clause is a clause in an agreement that aims to release or limit the liability of one party for an event or loss that may occur. This clause is also often referred to as a liability release clause or a disclaimer clause.
Rijken states that an exoneration clause is a part of an agreement that aims to release one party from the obligation to provide compensation for a breach of contract. This compensation can be in the form of partial or complete losses experienced by the other party.[3]
In simple terms, this exoneration clause is defined as a clause excluding obligations or transferring liability in an agreement.
Examples of Exoneration Clauses
- An exoneration clause on a parking ticket stating that the manager is not responsible for the loss of goods inside the vehicle.
- An exoneration clause in a lease agreement stating that the lessee is responsible for any damage occurring to the leased goods.
Legality of Agreements Containing Exoneration Clauses
In Law No. 8 of 1999 concerning Consumer Protection, an exoneration clause is considered a type of standard clause that is not permitted. Even if the agreement has been agreed upon by both parties, the agreement is invalid if it contains an exoneration clause.[4]
According to Article 1 number 10 of the Consumer Protection Law, a standard clause is a rule or condition that has been predetermined by the business actor and is stated in a document or agreement that binds the consumer.
Sutan Remy Sjahdeni in his book states that a Standard Agreement is an agreement that has been prepared with standard terms by one party without giving the other party the opportunity to negotiate.
A standard clause becomes invalid when there is an imbalance between the parties because a valid agreement must be based on the agreement of both parties and bind them as law. Violation of this principle can render the agreement invalid. Therefore, standard clauses containing exoneration clauses are prohibited.
Despite the principle of freedom of contract, the agreement must meet the legal requirements as regulated in Article 1320 of the Civil Code, including having a lawful cause. Article 1337 of the Civil Code states that an agreement is invalid if it is contrary to law or morality.
Thus, a standard agreement containing an exoneration clause is invalid because it violates the provisions of the law.
Impact of Agreements Containing Exoneration Clauses
An agreement that uses an exoneration clause can be null and void. An exoneration clause is a transfer of the business actor's responsibility for consumer protection.
An exoneration clause can cause the rights and obligations of the parties to become unbalanced. An exoneration clause in an insurance policy is a restriction or elimination of the insurer's responsibility for losses suffered by the insured.
In loan agreements on P2P Lending-based Fintech, an exoneration clause can cause the agreement to be null and void because it is contrary to Article 1337 of the Civil Code.
In the Consumer Protection Law, an agreement containing an exoneration clause can be null and void if it violates Article 18 paragraph (1). In the Civil Code, an agreement containing an exoneration clause can be null and void if it does not meet the legal requirements of the agreement.
[1] Article 1320 of the Civil Code
[2] Article 1338 of the Civil Code
[3] Ahmadi Miru. Contract Law, Contract Drafting. (Jakarta: PT Raja Grafindo Perkasa, 2007), p. 40
[4] Bernadetha Aurelia Oktavira, S.H., “The Law on Including Exoneration Clauses in Agreements” Hukum Online.
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