VALIDITY OF LEASE AGREEMENT SIGNED BY UNAUTHORIZED LEGAL SUBJECT REPRESENTING A BUSINESS ENTITY (CASE STUDY OF PANGKALPINANG DISTRICT COURT VERDICT NUMBER: 36/PDT.G/2020/PN.PGP Jo. BANGKA BELITUNG HIGH COURT VERDICT NUMBER: 24/PDT/2020/PTBBL)

Abstract

An agreement is a legal relationship of wealth/property between two or more people, which gives the power inherent in certain rights to one party to obtain achievement and at the same time obliges the other party to fulfill the achievement. The validity of an agreement is determined by the fulfilment of the conditions contained in the provisions of Article 1320 of the Civil Code. Regardless of the protection by these legal norms, the majority of business actors or investors in Indonesia often make decisions based on trust in their close colleagues or relatives in running or managing their businesses. This sense of trust often causes problems in business activities. The consideration of appointing someone as an employee especially as a business manager/manager solely on the grounds that they have been long-time close friends (even considered as a family member) is not a guarantee that someone has the ability, integrity, and responsibility to develop and run a business as was the case in Pangkalpinang. The author describes the legal consequences that occur following lease transactions carried out on the basis of trust in friends. The method used is a normative juridical research method, while the data collected in this study is secondary data.