Type of Agreement and Default Case Settlement for Debtors of Sharia Pawnshop in Banda Aceh, Indonesia

Abstract

An agreement should meet requirements regulated in Article 1320 of the Civil Code, and agreement for Sharia Pawnshop is without exception. The province of Aceh is the strongest base for Sharia pawnshop. There are two factors considered essential regarding the Sharia Pawnshop in Banda Aceh, i.e. the type of agreement between debtors and the shop and the settlement of default dispute. To examine those two factors, the author conducted an empirical study with a descriptive-analytical approach. The research results showed that the contract between the Pawnshop and the debtors was stated in the form, agreed upon and filled in by both parties. Debtors commit a breach of contract because of several factors, i.e. high price estimate, decrease in the gold price, communication problem, and financial factor. The settlement for the default case was conducted by calling, texting, and sending debtors notice. When the case could not be settled, the collaterals were placed in an auction after notifying the debtors who breached the contract.