“Put merely; the default can be used for when a party to an agreement violated that agreement, while tort can be used when someone broke the law and it caused injury/damages to someone else.”
When parties had a dispute in the private sector, often they would settle the dispute in the court. Disputes in the private sector are varying; it could be about late payment or no payment at all, it could be about a breach of agreement, and many more. However, in general, private disputes could be categorized into two, which are default and tort. Most people often missed this and mixed the two into one lawsuit; however, each has a different basis and implication. Mixing the two into one lawsuit could even result in the lawsuit rendered as obscure. Thus, one should be clear on his/her claims when filing a lawsuit, is it a default, a tort, or perhaps both?
Details of Default and Tort
In layman’s terms, default is a breach of contract while tort is a wrongful act. The basis of default is the existence of a contract between several parties, which one of the parties breached the contract by doing any of the following things:
- Failed to fulfil its part of the obligation, either in purpose or unintentionally. For example, if party A agreed to buy a car from Party B for a sum of money but then Party A didn’t pay the money to Party B after receiving the car;
- Conducted the obligation wrongly / not as agreed. For example, if Party B agreed to sell Party A a red car for a sum of money, but then Party B delivered a blue car instead of red car;
- Failed to fulfil its part of the obligation in time. For example, if Party A agreed to buy a car from Party B and it’s agreed to be delivered the day after, but then Party B delivered the car a week later instead;
- Conducted an act prohibited by the agreement, for example, if Party A rented a car from Party B in condition that Party A should not modify the car in any way, but then Party A did a paint job on the car.
Considering the principle of freedom of contract as stipulated in article 1338 of Indonesian Civil Code, the specific form of default could vary depending on what agreed between the parties, however, as long as a party breached a legally accepted contract, his/her act could be considered as a default. Despite being based on an agreement, however, the basis of compensation for default could be found in article 1243 of Indonesian Civil Law, which stipulates “Compensation for costs, damages and interests for the breach of an obligation only becomes obligatory, if the debtor, after she or he have been declared to be in default, remains in default, or in case of obligations where he must give or produce something, is only given after the lapse of a period.”
Unlike default, the tort is not based on an agreement but instead on infringement of law. The basis of tort can be found on article 1365 of Indonesian Civil Code, which stipulates “Every unlawful act that causes damage onto another person obliges the wrongdoer to compensate such damage.” The elements of tort can be divided into the followings:
- There is an unlawful act. According to Indonesian Law, unlawful act refers to an act which violates either the written law or unwritten law such as norms and decency;
- There is a fault. It includes ones caused by purpose, and one’s causes by negligence;
- There is an injury. The unlawful act must have caused injury or damages to another party, either material or immaterial;
- There is causality between the act and the injury.
Simply put, the default can be used for when a party to an agreement violated that agreement, while tort can be used when someone broke the law and it caused injury/damages to someone else.
Mixing Default and Tort in a Lawsuit
One of the most important things when filing a lawsuit to Indonesian court is to be as clear as possible. A lawsuit which is obscure on its basis, object, or claim is considered as formally defective and will be rejected by the court. Mixing both default and tort is considered as obscure as the plaintiff would be seen to be unsure of what his/her own claim is. As supported by Supreme Court Decision No. 1875 K/Pdt/1984 and 879 K/Pdt/1997, both default and tort have their own implication and burden of proof and thus cannot be mixed. However, it is allowed to file both default and tort claims together as an action could violate both an agreement and the prevailing law. As supported by Supreme Court decision No. 2686 K/Pdt/1985 and 886 K/Pdt/2007, the plaintiff is allowed to file both default and tort claim together as long the two claims are clearly separated. This kind of claims is considered as objective cumulation instead of obscure.
Author: Benedictus Giovanni
Gaffar & Co., Indonesian Boutique Law Firm which specializing and focus on commercial law areas include capital market and financial services.
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