Reconceptualizing Pacta Sunt Servanda in Indonesian Government Construction Procurement Contracts

Abstract

The rigid enforcement of public infrastructure contracts in Indonesia systematically erodes legal certainty and perpetuates endemic disputes, as evidenced by the construction sector’s dominance in blacklisting sanctions and conflicting judicial rulings on unilateral contract terminations by local governments. This normative legal study deconstructs the formalistic interpretation of Article 1338 of the Indonesian Civil Code to formulate an adaptive contract governance model using statutory, conceptual, philosophical, comparative (Malaysia’s CIPAA and Singapore’s SOPA), and jurisprudential approaches. The findings reconceptualize pacta sunt servanda not as an inflexible doctrine, but as a hybrid relational principle synthesizing international law, national regulations, and Islamic ethical-religious precepts (Aufuu bil 'uquud and Maslahah Mursalah). This framework mandates adaptive contractual performance through equitable addenda and imposes procedural duties of cooperation and disclosure. Additionally, this study proposes an Integrated Contract Governance Framework incorporating procedural good-faith clauses and a tiered dispute resolution mechanism—advancing from negotiation to maslahah-based mediation, statutory adjudication, and litigation. Implementing expedited adjudication is deemed essential to prevent project delays and fiscal inefficiencies. Ultimately, adaptive contractual governance ensures accountable infrastructure delivery, advances sustainable development and public fiscal efficiency, and redresses structural power imbalances between public authorities and service providers.