Legal Consequences for Parties That Conduct Defaults In Verbal Contracts

Verbal contracts are often conducted. Unfortunately, verbal contracts are prone to defaults. This article discusses the strength of verbal contract, its legality based on the Civil Code, and the legal consequences that bind the parties who conduct defaults. Normative juridical approach was employed using justice theory and literature review. Primary, secondary and tertiary legal materials were used to complement the secondary data obtained through literature and data of Medan District Court Decision Number: 750 / Pdt.G / 2018 / PN.Mdn. The results showed that the defendants did defaults, where the plaintiffs’ rights were not fulfilled by the defendants within the verbal contracts as the defendants denied the contracts. Therefore, the judges rejected plaintiffs’ lawsuit. Verbal contracts are legally valid and do not violate the Law Number 1320 of Code of Civil Law which states that the requirements of a valid contracts include agreement that binds two parties, capability in making an agreement, a specific problem, and a non-prohibited reason. The plaintiffs proved in the court that the verbal contract made between plaintiffs and the defendants was valid and legal based on witnesses’ statements and documents. However, board of judges rejected the suit due to the absence of written agreement.