LEGAL ANALYSIS OF PMH AND BREACH OF PERFORMANCE

Before analyzing, it is good to understand what is meant by Breach of Contract (Wanprestasi) and Unlawful Acts (PMH). Here is the explanation:

Breach of Contract (Wanprestasi) is the failure to fulfill an obligation or a breach of promise or negligence committed by the debtor, either by failing to do what was agreed upon or by doing something that is prohibited by the agreement.

The term “wanprestasi” originates from the Dutch word “wanprestatie,” which means the non-fulfillment of a performance or obligation set for certain parties in an agreement, whether the obligation arises from a contract or from a statutory obligation.

Breach of contract has legal consequences for the party committing it and leads to the emergence of the injured party’s right to demand compensation from the breaching party. The law expects that no party will be harmed by such a breach.

Legal Consequences of Breach of Contract

The legal consequences or sanctions imposed on the debtor for committing a breach of contract are as follows:

a. Obligation to pay compensation

Compensation involves paying for the losses caused by the destruction or damage of the creditor’s property due to the debtor’s negligence. To claim compensation, there must first be a demand (a reminder) unless in certain situations where no reminder is needed.

The provisions regarding compensation are regulated in Article 1246 of the Civil Code, which consists of three types: costs, damages, and interest. Costs are all expenses clearly incurred by the creditor, while interest refers to the loss of profits that were expected or previously calculated.

Compensation must be calculated in monetary terms and must be in the form of money. This means that the compensation caused by a breach of contract should only be calculated in terms of a sum of money. This is to avoid difficulties in valuation if it were to be compensated in another form.

b. Cancellation of the agreement

Another sanction for a debtor’s negligence is the cancellation of the agreement. This sanction may not always be seen as a punishment. In some cases, the debtor may feel relieved from obligations due to the cancellation.

According to the Civil Code, Article 1266: The condition for cancellation is always stated in reciprocal agreements, where if one party fails to fulfill its obligations, the agreement is not automatically cancelled but must be requested for cancellation by a judge. This request must still be made even if the cancellation condition due to non-fulfillment is stated in the agreement. If the cancellation condition is not stated in the agreement, the judge has the discretion to, upon the defendant’s request, provide a grace period to fulfill the obligation, but the grace period cannot exceed one month.

c. Transfer of risk

The consequence of a breach of contract involving the transfer of risk applies to agreements concerning goods, such as leasing agreements. As stated in Article 1237, paragraph 2 of the Civil Code, “If the debtor neglects to deliver the goods, from the moment of his negligence, the goods are at his responsibility.”

Unlawful Acts (PMH) in civil law refers to any act that causes harm and gives the victim the right to claim compensation from the person who committed the act. The harm can be material or immaterial.

PMH can occur in both criminal law and civil law. In this context, PMH refers to civil law.

According to Munir Fuady (Fuady: 2002, p. 3), Unlawful Acts are a collection of legal principles aimed at controlling dangerous behaviors, assigning responsibility for damages resulting from social interactions, and providing compensation to victims through appropriate claims.

PMH is regulated in Article 1365 of the Civil Code, which states, “Any act that violates the law and causes harm to others obligates the person causing the harm due to their fault to compensate for the loss.”

Differences between Breach of Contract and Unlawful Acts (PMH)

To make it easier to see the differences between breach of contract and unlawful acts, here is a comparison table (Ikatan Hakim Indonesia: 2016, p. 33).

 

Reviewed from	Breach of Contract (Wanprestasi)	Unlawful Acts (PMH)
Legal Source	Articles 1238, 1239, 1243 of the Civil Code Arises from an agreement/contract	Articles 1365 to 1380 of the Civil Code Arises from a person’s actions
Elements	There is an agreement between the parties; One party violates or fails to fulfill the terms of the agreement; The party has been declared negligent but still refuses to fulfill the agreement.	There is an act; The act violates the law; There is fault by the actor; There is harm to the victim; There is a causal relationship between the act and the harm.
Right to Sue	The right to claim compensation in breach of contract arises from Article 1243 of the Civil Code, which generally requires a notice of default (reminder)	The right to claim compensation in PMH does not require a notice of default. Whenever PMH occurs, the injured party has the right to directly claim compensation.
Proof in Lawsuit	The plaintiff only needs to show that there is a breach of contract or that the agreement was violated	The plaintiff must prove that all elements of PMH are met, in addition to proving that the debtor’s fault caused harm.
Compensation Claims	The Civil Code regulates the calculation of compensation that can be claimed, including the types and amounts of compensation in breach of contract. In breach of contract claims, restitution to the original state cannot be demanded.	The Civil Code does not regulate how compensation is calculated, so both material and immaterial losses can be claimed. Restitution to the original state can be demanded.

Example Case of Unlawful Acts (PMH)

Mr. Ahmad resides at Bekasi Rd No.10, Bekasi, and owns a plot of land measuring 2000 m² located at Kusuma Bangsa Rd No.7, Kec. Tambun, Bekasi, with proof of ownership in the form of Certificate of Ownership No. 0234/Tambun. On August 27, 2010, Mr. Ahmad’s land was rented by Mr. Amir Mahmud, the CEO of PT. Cakrawala, located at Antara Rd No.17, Central Jakarta, for a warehouse to store goods belonging to PT. Cakrawala, for a period of 10 years at a rent of Rp. 10,000,000 (ten million rupiah) annually, with payment due every August 27.

On August 27, 2010, at the signing of the Lease Agreement between PT. Cakrawala and Mr. Ahmad, the first year’s rent of Rp. 10,000,000 (ten million rupiah) was paid by PT. Cakrawala.

While the lease was still in effect, on January 1, 2014, Mr. Ahmad sold the land to PT. Alexindo, represented by Mr. Hendrik Purnomo, the CEO of PT. Alexindo, located at Jin Proklamasi No.17, Bekasi, for Rp. 500,000,000 (five hundred million rupiah).

When Mr. Amir Mahmud attempted to pay the rent for the ongoing year on August 17, 2014, Mr. Ahmad rejected the payment, citing that the land had already been sold to PT. Alexindo. Mr. Amir Mahmud then approached Mr. Hendrik Purnomo, the Director of PT. Alexindo, to pay the rent, but the payment was again refused. In fact, Mr. Hendrik Purnomo provided a letter to PT. Cakrawala requesting that they vacate the land within one month, by the latest September 17, 2014.