Legal update · Civil & Commercial Litigation
Guide to Civil Contract Practice in Indonesia 2026
- Contracts remain valid under Article 1320 when they have agreement, capacity, a clear object, and a lawful purpose, and e‑signatures using a Kominfo‑registered certificate now satisfy the formalities, eliminating the need for notarisation.
- Lease agreements have no statutory deposit limit, rent increases must be pre‑agreed, and eviction requires a court order unless the parties expressly waive Article 1266.
- For digital transactions, ensure parties are legally capable, use certified e‑signatures, include dispute‑resolution and choice‑of‑law clauses, and preserve auditable electronic evidence while confirming any applicable Terms of Service.
The summary is produced when the article is published, then reviewed and approved by the author. It does not replace the article and is not legal advice.
Reviewed by Jaka Margana ·
18 September 2026
In 2026, Indonesia’s civil law still rests on Article 1320 of the Civil Code. A contract is valid if there’s agreement, capacity, a clear object, and a lawful purpose. The big change? E‑signatures are now accepted when you use a Kominfo‑registered certificate, according to PP No.71/2019. So you can skip notarisation as long as the digital formalities are satisfied.
Typical contracts include leases, sales, and employment agreements. Landager 2026 notes that lease deposits are purely contractual—no statutory limit—and any rent hike must be agreed in advance. Evicting a tenant still needs a court order unless the parties sign a clause that waives Article 1266. This short guide highlights the must‑know points for lawyers and firms.
Hybrid contracts are becoming popular. A Magister 2026 paper suggests mixing traditional and digital clauses to keep legal certainty while giving businesses flexibility. Take the PUBG Mobile virtual‑item sale case: Universitas Lampung 2026 found it can be valid under Article 1320, but only if you respect the game’s Terms of Service that usually block transfers. Bottom line: always check the TOS before you draft a digital contract.
Quick tips: 1) Make sure everyone is legally capable (at least 17 years old, not under guardianship). 2) Use certified e‑signatures. 3) Add clear dispute‑resolution and choice‑of‑law clauses. 4) Keep electronic evidence in a format that can be audited. Do these and you lower the chance of a breach.
Every published article constitutes legal opinion and accordingly may not be used as evidence in any legal proceeding.