Covenants are a common thing that happens in everyday life. If we want to do a business deal, then an agreement is needed. When we buy insurance products, there is also an agreement. Let's see what are the legal terms of the agreement in this article!
Legal Terms of the General Agreement
According to Article 1320 of the Civil Code, there are 4 conditions that must be met if the agreement we make is valid in the eyes of the law. Here are the conditions:
1. The agreement between those who bind themselves
The first condition is an agreement between the two parties that bind themselves. This agreement must be reached without coercion, and deception.
An example is when a customer buys an insurance product. Prospective customers and insurance providers must reach an agreement without coercion and fraud.
The insurance agreement usually includes things such as benefits, premium costs and also how to claim.
2. Have enough skills to make an agreement
Quoting from Article 1330 of the Criminal Code, the parties to the agreement must be competent. The criteria for people who can be said to be incompetent are people who have the following criteria:
- Immature people
- People who are in special conditions (disabled, insane, declared bankrupt by the court and so on
3. The promised object is clear
The promised object or service must be clear and accountable. An example of this is the process of buying and selling a house.
The house for sale must have a clear address and specifications. Starting from the area, address, village and sub-district must be clear.
4. Objects must be legal
An agreement will be considered invalid when the object being traded is illegal.
For example, there is a process of buying and selling illegal drugs such as marijuana, drugs and so on.
Legal Terms of Insurance Agreement
As previously mentioned, in the process of buying and selling insurance, there is an agreement. The following are the legal terms of an insurance agreement:
- Period of coverage
- Police deadline
- How to pay premium
- Premium amount
- The exchange rate used in the insurance policy
- Company policy regarding late payment of premiums
- Benefits to be gained by police holders
- How to extend an insurance contract
- Exceptions in coverage
- How to terminate a contract
- Terms and how to submit a claim
- How to resolve disputes if there is a conflict between the insurance company and the policyholder
Make sure before you buy a policy, the things above have been included in the policy book.
Basis in the Agreement
In accordance with what is mentioned by the Criminal Code, the agreement itself has 5 basics. Here are the basics of the agreement
1. Fundamentals of Freedom of Contract
Everyone has the freedom to determine what the contents of the agreement itself are, not only the contents of the person can also freely determine the form of the agreement.
2. Fundamentals of Consensualism
Consensualism means that both parties must agree with each other to bind a promise.
If both parties have agreed, then the agreement will automatically take effect. But the case is different if the agreement made is a formal agreement. A procedure is needed to ratify a formal agreement.
3. Basis of Legal Certainty
In accordance with article 1338 of the Criminal Code, a valid agreement must be made in accordance with the law.
If both parties renege on the agreement, the party who violates the agreement may be punished according to the judge's decision.
4. Fundamentals of Good Faith
Mutual trust, mutual honesty and mutual openness are things that must be done by both parties who are bound by the agreement.
5. Personality Principle
Each agreement must be binding on the parties directly involved. This means that the parties involved in the agreement cannot be represented.
Consequences of the Legal Conditions of an Agreement Not Fulfilled
If the legal requirements number 1 and 2 are not met, then the process of canceling the agreement must be carried out through the court.
Meanwhile, if points 3 and 4 are not fulfilled, then the agreement is considered never existed because the object is not clear.
If one party breaks a promise, and it is detrimental to the other party, then it is very likely that the party who breaks the promise will be prosecuted in court. Usually the judge will also give a number of sanctions.
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