GOOD FAITH IN BANK CREDIT AGREEMENT

Abstract

In our life interactions amidst the society, the honest people or people with good faith must be
protected. The provisions concerning good faith in the Civil Code are contained in Article 1338
Paragraph 3 stating that all agreements should be carried out in a good faith. This means that
any party making an agreement should act in a good faith, including the credit agreement in a
bank. In the bank credit agreement, the parties are given an opportunity to enter into an
agreement (consensus) on the content in accordance with the wishes of the parties. But, not all
agreements made with a consent reflecting the values of honesty and propriety available in the
society. Sometimes there are parties who seek their own advantage in implementing an
agreement by looking for the weaknesses and shortcomings of the agreement. The good will
contained in an agreement provides a legal protection for those implementing the agreement.
Good faith has to be present from the pre-contract phase where the parties begin to negotiate
to reach an agreement up to the stage of contract implementation. In the event that an agreement
is deemed to violate the principles of a good faith, the law gives the judge an authority to
change or even remove part or all of the agreement. The principles of good faith also provide
a clue that in carrying out the agreement each party should be fair to each other.