Implementation of The Principle of Freedom of Contract in Standard Agreements Reviewed From Consumer Protection

Abstract

The purpose of this study is to investigate how standard agreements use the freedom of contract principle and what that means for consumer protection. Normative legal research with a regulatory perspective is the research methodology employed. Due to their perceived efficiency and practicality, standard contracts have expanded quickly in tandem with rising public demand in the service, insurance, leasing, and financing sectors. However, because standard clauses are unilaterally drafted by commercial players, standard contracts really put consumers at a disadvantage. Article 1320 of the Civil Code and Article 18 of Law Number 8 of 1999 concerning Consumer Protection generally grant the parties freedom under the basis of freedom of contract, but this freedom is not unqualified. Through its decision, the Constitutional Court has highlighted that standard clauses that harm consumers and absolve corporate actors of accountability are incompatible with the fairness and balance principles. Therefore, in order to guarantee consumer protection and attain fairness in standard agreements, the
state must play a role through regulation and oversight.