Legal Status and Force of Memorandum of Understanding as Valid Agreement in Indonesia
DOI:
https://doi.org/10.25134/unifikasi.v13i01.944Keywords:
Contract Law, Legal Force, Memorandum of Understanding, Sustainable Development GoalsAbstract
Memorandum of Understanding (MoU) is often misunderstood as only a moral agreement without binding force. The absence of specific regulations in positive law caused legal uncertainty that countered the spirit of Sustainable Development Goal (SDG) 16 (Peace, Justice, and Strong Institutions) in achieving accountable economic governance. Purpose: Therefore, this study aimed to analyze the legal status and force of MoU as valid agreement in Indonesian contract law. Methods: A normative-descriptive legal study was conducted to examine the problem through doctrinal interpretation and analysis of court decisions. Results: The results referred to Supreme Court Decision No. 174/Pdt/2018/PT.Bdg and Supreme Court Jurisprudence No. 1788/K/Pdt/2014, which recognized that MoU had the legal force of valid agreement, provided its substantive provisions satisfied the requirements of Article 1320 of the Civil Code. In a situation where a clause violation resulted in material losses and carried strict sanctions, MoU had the same status as a formal contract and was binding under the principle of freedom of contract (Article 1338 of the Civil Code). Conclusion: In conclusion, MoU that satisfied the essential requirements for contract validity, had a valid and binding legal status equivalent to that of a contract between the parties. It served not only as a pre-contractual document but an agreement with legally enforceable consequences. Suggestion: Based on these results, lawmakers were recommended to codify specific MoU rules when updating national contract law to ensure sustainable legal certainty. Legal practitioners were also advised to draft explicit rights, obligations, and sanctions clauses in the lease MoU to ensure its executory power. Contribution: This study contributed to literature by providing a basis for legal practitioners to consider when drafting a protective and accountable MoU.
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