Preparing a Breach of Contract Lawsuit

Indonesian Lawyer Experts in:
PREPARING A BREACH OF CONTRACT LAWSUIT

Breach of Contract occurs when a party in the agreement fails to perform their promised obligations. The obligation may be in the form of delivering goods/services or making a payment based on the agreed schedule or it can be any terms being violated by a party as stated in the agreement which may or may not incur a loss to the other party either directly or indirectly.

Before a lawsuit is filed, the party may have had several meetings recorded in the Minutes of Meetings, however, due to disagreement in settling the dispute, filing a lawsuit may be inevitable.

This article is a suggestion for the drafter to understand how the Breach of Contract Lawsuit should be addressed in Indonesia.

Important things to know before filing a Lawsuit

When either party allegedly breaches a contract, the damaged party shall first ensure that the contract or agreement signed by the parties are:

1. Valid and binding for both parties: both parties shall acknowledge all clauses outlined in the agreement and any amendments therein.
2. The contract or agreement is not violating the relevant laws and regulations: no articles or clauses are being void by law.
3. The damaged party has carried out part or its entire obligations under the agreement.

Once the above three points are identifiable, the damaged party shall understand that a lawsuit contains “posita” and “petitum” as the principle of drafting a lawsuit in Indonesia.

1. “Posita” is the background, facts, and juridical aspects including laws and regulations.
2. “Petitum” is part of a lawsuit that contains matters requested or claims by Plaintiff to be rewarded by the court.

From the panel of judges’ point of view and considering the number of cases they examine. Hence a straightforward Breach of Contract Lawsuit is necessary to ensure the panel of judges understands the case.

The “posita” shall be “clear and concise” where it elaborates the parties and their domicile, date, terms and conditions of the agreement being violated by the defendant, amount of loss, and juridical aspects according to the Civil Law and other related laws in Indonesia.

Having a comprehensive lawsuit would also reduce the possibility for the defendant to file a motion for an exception (demurrer) on the error in the object, error in person, premature lawsuit, and/or obscuur libel (unclear lawsuit).

What to elaborate on and what to claim in a lawsuit

The panel of judges is too busy to read the entire lawsuit. Although it may vary case-by-case 10 (ten) pages containing “posita” and “petitum” shall be sufficient to elaborate on the issues in a “clear and concise” manner.

Based on our experience, the panel of judges will grasp the case effortlessly if the plaintiff explains the background of the case with a table, boxes, diagram, or picture and put it in simple Bahasa Indonesia. The use of “yang mana”, “hal mana”, and/or other wordy languages is not efficient to address the main issue.

Other than the defendant’s information, the Plaintiff could address several matters in formulating the posita in a breach of contract lawsuit:

1. Elaborate on the backgrounds of the agreement: make sure to utilize 5W + 1H (What, When, Where, Who, Why, and How).
2. State the objectives of the lawsuit, and mention the minutes of meetings, photos of the meeting and or even any acknowledgment by Defendant towards the matter (if any) in order to prevent a claim of error in the object, error in person, premature lawsuit, and or obscuur libel (unclear lawsuit).
3. Relevant laws and regulations that relate to the agreement, such as Article 1320 in conjunction with Article 1338 of the Civil Code, Article 1457 of the Civil Code, etc.
4. Strengthen the argumentation with Supreme Court jurisprudence.
5. Calculate the loss due to breach of agreement in posita in a concise manner: this would illustrate the amount of loss suffered by the plaintiff.
6. Request for an immediate decision and periodic penalty payment (Dwangsom):

In addition to a breach of contract lawsuit due to unpaid outstanding, the plaintiff could also assert:

1. 6% moratorium interest (bunga moratoir) could be requested by the plaintiff according to Staatsblad No. 22 of 1848.
2. Conservatoir beslag (collateral confiscation): make a list of the defendant’s assets to be confiscated for the repayment of outstanding.

Once the posita is carefully drafted, claims in the petitum shall conform with the content stated in the posita. The claim could contain the following claims:

1. To accept and grant the entire lawsuit;
2. To declare the agreement is valid and binding;
3. To declare that the defendant has XXX outstanding;
4. To declare the defendant in default for not fulfilling its obligations;
5. To sentence the defendant to fulfill its obligation to pay its debt for XXX with an additional 6% moratorium interest from the total debt per year to the plaintiff, calculated since the lawsuit is registered at XXX court;
6. To place security seizure on the defendant’s asset;
7. To declare this decision could be carried out despite the legal remedies of the third-party resistance, appeals, or cassations (uitvoerbaar bij voorrad).
8. To sentence the Defendant to pay the entire cost of this case.

Hopefully, through a clear and concise lawsuit with solid evidence, the decision shall be in favor of the plaintiff entirely or partially.

Need legal assistance in filing a lawsuit? Contact us at info@maulanalawfirm.com