Legal analysis of abuse of conditions in banking credit agreements in Indonesia: implications for international consumer protection

Banking credit agreements are generally in the form of standard contracts that are determined entirely by the bank as the dominant party so that the debtor can only agree without being able to negotiate. This imbalance has the potential to be exploited by the dominant party, thus harming the weaker party. The purpose of this study is to analyze the abuse of circumstances in banking credit agreements. This normative legal study used conceptual and static approaches, whereas the data analysis technique used descriptive analysis. The study’s findings demonstrate that mistreatment of conditions has roots in both the events leading up to and including the creation of the agreement. Even though the criteria are onerous, parties in an emergency, such as debtors in desperate need of money, may be compelled to accept the credit arrangement terms. The bank is in a stronger position both mentally and financially at the same time. The Indonesian Civil Code does not yet regulate abuse of circumstances, so it needs to be revised to balance the principle of freedom of contract with the principles of propriety, fairness and balance.