Force Majeure as a Justification for Failure to Fulfill Contractual Obligations Due to the Covid-19 Pandemic: Suspending or Terminating Contract?
Abstract
As a result of the Covid-19 pandemic, large debtors experienced performance failures so that the President of the Republic of Indonesia designated Covid-19 as a non-natural disaster and a national disaster in Presidential Decree (Keppres) No.12/2020. The Civil Code has provided rules to anticipate failure to contractual obligations caused by circumstances beyond the parties’ ability through measures of defense against non-performance on the grounds of force majeure. The problem lies in whether the parties impeded in carrying out contractual obligations can use Presidential Decree No.12/2020 as a cause for force majeure. This study examines whether Presidential Decree No. 12/2020 meets the criteria for force majeure as regulated in the Civil Code. This research is normative legal research examining the legal norms regarding force majeure regulated in Articles 1244 and 1245 of the Civil Code. The researcher deployed legislation as primary legal material and legal doctrine as secondary legal material. Data were obtained through literature studies incorporating electronic textbooks attained through the google scholar search engine. The data were analyzed qualitatively, and conclusions were drawn based on deductive reasoning. The results indicated that Presidential Decree No.12/2020 is a fact that does not require proving. However, the event of force majeure alone is an inadequate cause for non-performance; instead, causality between the force majeure and the failure to perform must be proved. Similarly, it also needs to be confirmed that the debtor acts in good faith. In concrete cases, judges have the authority to perform the primary function of good faith by either suspending the performance of contractual obligations or terminating contractual relations and determining the responsibility of bearing the risks caused by force majeure.
Keywords: force majeure, suspend, terminate the contract, Indonesia
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