Position of Law Number 24 of 2009 on the Limitation of the Principle of Freedom of Contract in International Agreements
DOI:
https://doi.org/10.58524/smartsoc.v6i3.1464Keywords:
Principle of Freedom of Contract, International Agreements, IndonesianAbstract
Economic globalisation has multiplied cross-border agreements in which Indonesian and foreign parties frequently adopt English as the sole contract language, yet Article 31 of Law Number 24 of 2009 requires that any agreement involving Indonesian subjects be drawn up in Indonesian, creating a normative tension with the principle of freedom of contract. This study analyses the legal basis on which the language requirement restricts freedom of contract, examines the opportunities and challenges arising from its implementation, and clarifies its jurisprudential standing. It uses normative (doctrinal) legal research combining statutory, case, and conceptual approaches, drawing on primary legal materials—the Civil Code, Law Number 24 of 2009, Presidential Regulation Number 63 of 2019, and relevant court decisions—analysed qualitatively and prescriptively. The study finds that the requirement operates through the lawful-cause element of Article 1320 of the Civil Code, so that an agreement written solely in a foreign language is treated as having an unlawful cause and is null and void, as affirmed by the Supreme Court in Decision Number 601 K/Pdt/2015 (Nine AM Ltd v PT Bangun Karya Pratama Lestari); Presidential Regulation Number 63 of 2019 nevertheless permits a bilingual instrument in which the Indonesian text governs, providing a practical reconciliation. It concludes that the language requirement is a legitimate but not absolute limitation on freedom of contract—a limitation on the validity of the agreement rather than on the autonomy to contract. The study contributes a reconciliatory reading that treats mandatory Indonesian and party autonomy as complementary rather than opposed, and recommends bilingual drafting with an Indonesian governing-language clause to secure both national interest and contractual certainty.
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