1.

DEFINITION OF AGREEMENT
In the Big Indonesian Dictionary, an agreement is an "agreement" in writing or orally made by two or more
parties, each of whom agrees to comply with what is stated in the agreement.
The Legal Dictionary explains that an agreement is an “agreement” made by two or more parties, in writing
or orally, each agrees to comply with the contents of the agreement that has been made together. According to
Article 1313 of the Civil Code, "An agreement is an act by which one or more persons bind themselves to one or
more persons.
According to Sudikno, an agreement is a legal relationship that based on an agreement to cause legal
consequences. The legal relationship occurs between one legal subject and another legal subject, where one legal
subject is entitled to achievements and so are other legal subjects who are obliged to carry out their achievements in
accordance with what has been agreed.

2. LEGAL PRINCIPLES OF AGREEMENTS

a. The principle of freedom of contract (freedom of contract)
The principle of freedom of contract can be analyzed from the provisions of Article 1338 paragraph (1) of the
Criminal Code, which reads: "All agreements made legally apply as law for those who make them." This principle is
a principle that gives freedom to the parties to: (1) make or not make an agreement; (2) enter into an agreement with
anyone; (3) determine the contents of the agreement, its implementation, and its requirements, and (4) determine the
form of the agreement, whether written or oral.
b. The principle of consensualism (consensualism)
The principle of consensualism can be concluded in Article 1320 paragraph (1) of the Criminal Code. In the
article it is determined that one of the conditions for the validity of the agreement is the existence of a word of
agreement between the parties both sides. This principle is a principle which states that agreements are generally not
held formally, but only with the agreement of both parties. An agreement is an agreement between a will and a
statement made by both parties. The principle of consensualism known in The Criminal Code is related to the form
of the agreement.
c. The principle of legal certainty (pacta sunt servanda)
The principle of legal certainty or also known as the principle of pacta sunt servanda is a principle related to
the consequences of the agreement. The principle of pacta sunt servanda is the principle that judges or third parties
must respect the substance of the contract made by the parties, as befits a law. They must not intervene on the
substance contract made by the parties. The principle of pacta sunt servanda can be concluded in Article 1338
paragraph (1) of the Criminal Code. However, in Further development of the principle of pacta sunt servanda is
given the meaning of pactum, which means an agreement that does not need to be strengthened by oaths and other
formalities. While the term nudus pactum is enough with just an agreement.
d. Principle of Good Faith (good faith)
The principle of good faith is stated in Article 1338 paragraph (3) of the Criminal Code which states: reads:
“The agreement must be executed in good faith.” This principle is the principle that the parties, namely the creditor
and debtor, must carry out the substance of the contract based on firm trust or confidence as well as the good will of
the parties. The principle of good faith is divided into two types, namely relative good faith and absolute good faith.
In the first intention, one pays attention to the real attitude and behavior of the subject. In the second intention, the
assessment lies in common sense and justice and an objective measure is made to assess the situation (impartial
assessment) according to objective norms.
e. Principles of Personality (personality)
The principle of personality is the principle that determines that someone who will do and/or make contracts
are for personal use only. This can be seen in Article 1315 and Article 1340 of the Criminal Code. Article 1315 of
the Criminal Code states: "In general, a person cannot enter into an engagement or agreement other than for
himself." The essence of this provision is clear that to enter into an agreement, the person must be for his own
benefit.
 In addition to the five principles described above, in the Engagement Law Workshop held by the National
Legal Development Agency (BPHN), the Ministry of Justice of the Republic of Indonesia on 17-19 December 1985,
eight principles of national engagement law were successfully formulated (BPHN, 1985:21) . The eight principles
are: the principle of trust, the principle of legal equality, the principle of balance, the principle of legal certainty, the
principle of morality, the principle of propriety, the principle of habit, and the principle of protection.

3. COVENANT THEORY
The legal basis of securities engagement according to agreement theory lies in an agreement which is the act of two
parties, namely between the issuer and the holder. The objection to this theory lies in its inability to provide a
solution to several issues that arise in the circulation of the securities. Under normal circumstances, this theory can
be accepted, but in abnormal circumstances, the theory cannot be accepted, for example because the securities are
lost or stolen. In this case, the issuer is still responsible for the holder or bearer of the letter that is obtained
abnormally.

4. TYPES OF DEALS
a. Official Deed (Authentic)
Official Deed is a deed made officially by a public official. This deed will authentically describe an event that
occurred or a condition where the official witnessed it firsthand. In this realm, public officials are notaries, judges,
court bailiffs, employees at the civil registration office, and others. An authentic deed has strong evidentiary power
so that when the deed is brought to court as one of the evidences, the judge cannot refute and ask for additional
evidence. An official deed must meet the following requirements:
1. The deed must be made when witnessed by a public official.
2. The deed must be made in accordance with the provisions of the law.
3. The public official who witnessed the making of the deed must be a public official who has the authority to
make the deed.
b. Underhand Deed (Underhand)
Underhand Deed is a deed that is not too binding because it is only made by the disputing persons and and
will usually be added with a witness's signature so that the deed becomes a little stronger. Underhand Deed is
regulated in Article 101 Paragraph B of Law no. 5 of 1986 concerning the State Administrative Court. This article in
detail states that "Underhand Deed is a letter made and signed by the parties concerned with the intention of being
used as evidence regarding the legal events contained therein". Underhand Deeds have strengths and weaknesses,
namely:
 Weaknesses: Underhand Deed will be weak if one party does not recognize the signature, aka assumes the
signature is fake.
 Pros: Underhand deeds are easier to make and do not require special requirements and complicated
procedures. It only takes both parties to the dispute and a witness so that the deed can be stronger.