The Principle of Balance in Informal Credit Agreements

Abstract

This research seeks to examine how the principle of equilibrium is utilized by the parties involved in the informal credit agreement. The research method involves empirical research. Furthermore, the research involves conducting interviews and reviewing relevant literature. The legal content is reviewed qualitatively and then explained in detail with analysis. The findings of this study indicate that the application of the principle of balance at the pre-contractual stage has reflected fairness for the parties involved, as both the bank and the debtor provide opportunities for negotiation to exchange rights and obligations fairly. However, at the contractual stage of informal credit agreements, there is still an omission of a crucial clause, namely, the clause stating "the agreement is made in two copies, each of which is given to the parties involved." This clause is essential as it guarantees that each party receives a copy of the credit agreement, thereby fostering the principle of balance in contracting. In the post-contractual stage, many debtors still do not receive a copy of the informal credit agreement. This practice is inconsistent with the principle of balance, which requires equal standing between the parties.