Elements and Stages of Contract Establishment

PERTANYAAN

There are 3 elements in a contract, namely the essentialia element, the naturalia element, and the accidental element. Please elaborate on these three elements. In addition, what are the stages in order to form/establish a contract? Thank you.

INTISARI JAWABAN

The stages of forming a contract consist of pre-contract, contract formation, and contract execution. In the process of pre-contract and establishment of a contract, there is a process of planning, designing, drafting the framework, and elaborating the contents of the contract.

Meanwhile, there are three elements of a contract, namely essentialia, naturalia, and accidental elements. What are the explanations?

Please read the review below for further explanation.

ULASAN LENGKAP

This article is an English translation of Unsur-Unsur dan Tahapan Pembentukan Kontrak which was written by Rizky Amalia and was published on Thursday, 22 December 2022.

All legal informations which are available through Klinik hukumonline.com have been prepared for educational purposes only and are general in nature (read the complete Disclaimer). In order to obtain legal advice specific to your case, please consult with Justika Partner Consultant.

Stage of Contract Establishment

A contract is an exchange of obligations that places the contractors bound to each other in order to comply with and implement the obligations which have been mutually agreed upon.

Article 1313 of the Indonesian Civil Code defines an agreement as an act whereby one or more persons bind themselves to one or more persons. In line with this definition, according to Subekti, an agreement is an event in which one person makes a promise to another person or in which two people promise each other to implement something.[1]

The common law system provides the following definitions of contracts/agreements:[2]

A contract is a promise or a set of promises for the breach of which the law gives a remedy or the performance of which the law is someway recognized as a duty.

The objective of the parties to set out the obligations embodied in the contract clauses are to provide legal protection and legal certainty in order to achieve a common purpose.

Also read: These are the 4 Conditions of a Valid Agreement and the Consequences if They are not Fulfilled

Hence, what are the stages of a contract?

1. Pre-contract

This stage is carried out by the parties before the contract is formed. The parties negotiate their interests in order to exchange their rights and obligations in a contractual relationship.

2. Establishment of a contract

At this stage, a contractual relationship emerges between the parties.

3. Implementation of a contract

This stage is the implementation (performance) of the exchange of rights and obligations based on the agreement of the parties. This stage is also known as the post-contractual phase.

These three stages must be based on the principles of contract law. A rule or norm essentially has a philosophical basis as well as a basic foundation or principle as its spirit.[3]

Several important aspects of the contracting process stage are as follows:

1. understanding of the legal basis of a drafted contract;
2. good command of the legal language;
3. the ability to negotiate to determine the rights and obligations which will later be set forth in the contract.

Meanwhile, the contract drafting process consists of several stages, namely research, drafting of contract frameworks (outlining), and wording. By conducting research, the contract drafter will have a sufficient understanding of the formulated contract.

Furthermore, regarding the drafting of the contract framework, these are the guidelines that should be used:

1. Systematic, complete, and clear

With a systematic, complete and clear framework, it will be easier for the parties to understand the rights and obligations of each as outlined in the contract.

2. One clause one concept

Each clause in the contract has one concept. By implementing this principle, the contract will be well understood by the parties as well as third parties such as judges.

3. Headings/title for each clause

Granting titles to each clause will facilitate the tracing of the contract in question.

4. 3P principle (predict, provide, protect)

By predicting the possibilities which might occur in the implementation of contracts, it will be easier to anticipate by providing clauses that regulate if such possibilities occur. The abovementioned clauses are also intended to protect the interests of the parties.

5. Supporting clause at the end

The placement of supporting clauses after the main clause indicates that the preparation of the contract is carried out systematically.

Elements of Contract

The anatomy of the contract consists of the opening, comparison, recital/premises/considerations, the content of the contract, and the closing.[4]

Answering your question regarding the elements of the contract, namely essentialia, naturalia, and accidental elements. These elements constitute the scope of the elaboration of the content.

Meanwhile, the elaboration of the elements of the contract are namely:[5]

1. Essentialia

This element is the main thing that must be present in a contract. The existence of this main clause determines the existence of the relevant contract.

For example, in a sales contract, the form of the essential element is the existence of goods and prices. Without these two elements, the sale and purchase contract does not exist.

2. Naturalia

The clauses contained in this element of naturalia are classified as supporting clauses. This element has been regulated in laws and regulations. If the parties do not agree on other matters than what is regulated by the laws and regulations, then the parties are deemed to have complied with the existing rules.

For example, the clause on tax. If the parties do not stipulate otherwise on the mechanisms and rules regarding the parties who are obliged to pay taxes, then the parties are interpreted as being subject to the existing tax regulations.

3. Accidentalia

This element will bind the parties if agreed. For example, prohibition, default, compensation, fine, interest, termination of the contract, force majeure, insurance, and dispute settlement.

For example: in a contract, the parties agree that the settlement of contract disputes will be settled through arbitration. Consequently, the parties are unable to propose settlements of said cases outside of what has been agreed.

These three elements are set out in a contract based on needs so that the common purpose and goals of the parties can be properly accommodated.

These are the answers we can provide, we hope you will find them useful.

Legal Basis:

1. Indonesian Civil Code.

References:

1. Agus Yudha Hernoko, Hukum Perjanjian: Asas Proporsionalitas dalam Kontrak Komersial, Jakarta: Kencana Prenadamedia, 2014;
2. P.S. Atiyah, An Introduction to the Law of Contract, New York: Oxford University Press, 1996;
3. R. Subekti, Hukum Perjanjian, Jakarta: Intermasa, 1987;
4. Ridwan Khairandy, Hukum Kontrak Indonesia dalam Perspektif Perbandingan, Yogyakarta: FH UII Press, 2013;
5. Y. Sogar Simamora, Buku Ajar: Teknik Perancangan Kontrak, Fakultas Hukum, Universitas Airlangga, 2006.

 

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[1] R. Subekti, Hukum Perjanjian, Jakarta: Intermasa, 1987, p. 1.

[2] P.S. Atiyah, An Introduction to the Law of Contract, New York: Oxford University Press, 1996, p. 2.

[3] Agus Yudha Hernoko, Hukum Perjanjian: Asas Proporsionalitas dalam Kontrak Komersial, Jakarta: Kencana Prenadamedia, 2014, p. 21.

[4] Y. Sogar Simamora, Buku Ajar: Teknik Perancangan Kontrak, Fakultas Hukum, Universitas Airlangga, 2006, p. 51.

[5] Ridwan Khairandy, Hukum Kontrak Indonesia dalam Perspektif Perbandingan, Yogyakarta: FH UII Press, 2013, p. 48.