A SCOPING REVIEW OF CONTRACT OF SALE: THE CASE OF INDONESIA AND JAPAN

Abstract

In this era of market economy and free trade, agreements are required to be valid and legally certain. To answer these demands, it is necessary to study and analyse the formulation of the understanding of the agreement, including the sale and purchase agreement. The principle of the legal requirements of the agreement and its prohibitions are then compared, with the main focus directed on examining the legal structure of the Indonesian Civil Code (ICC) and the Civil Code of Japan (CCJ). The underlying legal issue in this writing is whether the ICC’s legal framework in the contract of sale still adequate compared to the CCJ. The method applied is normative, exercising a conceptual approach, comparative statutes to construct a scoping review that uses a systematic and iterative concept to identify an emerging body of law on a given topic. The results are, first, similar to the ICC, in the eye of CCJ, a sale and purchase agreement is concluded as soon as one of the parties undertakes to pay the purchase money for the goods. The CCJ also stipulates that a sale and purchase agreement can proceed if the pre-agreement has been made by stating the intention by one of the parties to complete the sale or purchase. Also, the requirement that must be satisfied is the statement of purpose, which is a statement of purpose that is deemed to be valid if the parties declare their true intentions and purposes without concealing an intention of a particular purpose. Second, the reform of CCJ, effective 1 April 2020, is still believed to be the very first comprehensive set of reforms since its enactment in 1896. The authors have selected two key aspects that are related to the contract of sale, namely hidden or latent defects and guarantees. Key takeaways are that the hidden defect is deemed as the seller’s strict liability and the mandatory presence of guarantor(s) where the guaranteed obligations are a category of unspecified obligations is required and mandatory to set a cap on the guaranteed amount. These resulted in a clearer understanding that Indonesia’s legal framework, especially in the contract of sale, still relies too heavily on Article 1320 ICC and the existence of lex speciali derogat legi generali, like a standalone principle leaving ICC as the general rule unchanged.