Protection for Parties Involved in A Bank Credit Agreement with the Principles of Balance and Good Faith

Abstract

An agreement has a role and function to collect and distribute funds to economic actors. A bank encounters several problems due to the conflict of interests between a debtor and a bank, as the creditor. Generally, the problem is a wanprestatie (a default) by a debtor which becomes a conflict and foreclosure of collateral by the bank. As a preventive measure, a credit agreement is made by applying the principles of balance and good faith to protect the involved parties. Hence, both a debtor and a creditor feel secure and protected from various factors that may harm their interests. The present study is a normative legal research. It analysed the implementation of the balance principle to protect the parties in a bank credit agreement based on the Circular Letter of the Financial Services Authority Number 13/SEOJK.07/2014 concerning Standard Agreement. Meanwhile, for good faith principle, in addition to its regulation set forth in Article 1338 Paragraph 3 of the Indonesian Civil Code (KitabUndang-Undang Hukum Perdata/KUH Perdata), such principle becomes one of the requirements for a legally applied agreement as stipulated by the fourth term of agreement legality as set out in Article 1320 of KUH Perdata.