Legal Consequences Of The “Void By Operation Of Law” Clause In A Land Lease Agreement Due To Lessee Default (A Study Of Court Decision Number 64/Pdt.G/2021/PN Sorong)

Abstract

This study aims to analyze the validity of a "null and void by operation of law" clause in a land lease agreement triggered by a breach of contract, as well as the legal consequences regarding the building and rental payments already made, based on Sorong District Court Decision Number 64/Pdt.G/2021/PN Sorong. The research employs a normative-juridical method utilizing both the statute approach and the case approach. Primary, secondary, and tertiary legal materials were analyzed using a qualitative-prescriptive method. The findings indicate that the land lease agreement satisfied the requirements of Article 1320 of the Indonesian Civil Code, rendering it valid and binding upon the parties. While the clause in Article 6 represents an exercise of freedom of contract, its application must still adhere to Articles 1266, 1267, 1338 paragraph (3), and 1339 of the Indonesian Civil Code, as well as the principles of propriety, balance, and proportionality. The forfeiture of the building and the loss of rental payments should not be enforced absolutely without considering the legal status of the building, the performance already rendered, actual losses incurred, and *force majeure* circumstances. The legal consequences of a breach of contract must be applied proportionately, balancing the rights and obligations of the parties to prevent one party from gaining an excessive advantage.