Criminalization Of Contract Disputes Legal Analysis Of Supreme Court Decision Number 358 K/Pid/2020

Abstract

The criminalization of contractual disputes is a phenomenon that frequently occurs in law enforcement practice in Indonesia, where breach of contract in private legal relationships is often shifted into the criminal sphere through the construction of fraud offenses. Conceptually, however, breach of contract and fraud are fundamentally different, particularly with regard to the existence of malicious intent (mens rea) from the outset of the agreement. The blurring of boundaries between civil and criminal law potentially leads to legal uncertainty and the excessive use of criminal law in resolving private disputes. This study aims to analyze the conceptual distinction between breach of contract and the criminal offense of fraud in judicial practice, as well as to examine the legal reasoning of the Mahkamah Agung Republik Indonesia in Decision No. 358 K/Pid/2020 and its implications for legal certainty in the resolution of contractual disputes in Indonesia. The research adopts a normative juridical method with statutory, doctrinal, and case-law approaches. The analysis is conducted qualitatively using a deductive reasoning method. The findings indicate that breach of contract constitutes a violation of contractual obligations that should be resolved within the civil law domain, whereas fraud requires the presence of malicious intent from the beginning of the contractual relationship. Decision No. 358 K/Pid/2020 affirms that failure in the performance of a contract, in the absence of initial intent to deceive, cannot be classified as a criminal offense but rather constitutes a civil breach of contract. The decision reinforces the principle of ultimum remedium and rejects the criminalization of contractual disputes. This study concludes that a clear distinction between breach of contract and fraud is essential to ensure legal certainty and to prevent the excessive use of criminal law in civil disputes. The Supreme Court’s decision provides important jurisprudential guidance for law enforcement authorities to exercise greater caution in qualifying contractual disputes in accordance with their proper legal character.