Legality and Legal Consequences of Unilateral Termination of a Construction Work Contract: A Case Study of the Long-Segment Kabuena–Turu Road Project Contract No. 600.1.9/V.25.4/SP/DPUPR-KY/2023

Fajar Ari Setiawan; Hulman Panjaitan; Paltiada Saragi

doi:10.55227/ijhess.v5i3.2105

Authors

Fajar Ari Setiawan Universitas Kristen Indonesia
Hulman Panjaitan Master/Law Program, Faculty of Law, Christian University of Indonesia
Paltiada Saragi Master/Law Program, Faculty of Law, Christian University of Indonesia

DOI:

https://doi.org/10.55227/ijhess.v5i3.2105

Keywords:

contract termination, government procurement, construction services, legal protection, legal certainty

Abstract

This study aims to analysis the legality and legal consequences of the unilateral termination of the Long Segment Road Works Contract for the Kabuena–Turu section No. 600.1.9/V.25.4/SP/DPUPR-KY/2023 by the Commitment Making Official (PPK) under Indonesian positive law and relevant legal principles. The research employs a normative legal method supported by a limited qualitative empirical approach, using statutory, case, and conceptual approaches. Research materials consist of legislation, the contract and its implementation documents, complemented by scholarly literature and, where necessary, interviews with relevant parties. Data are analyzed using descriptive qualitative analysis combined with normative legal reasoning. The findings show that the contract was terminated when the physical works had in fact reached 100% completion and had been jointly measured, without clear evidence of default and without the prior stages of warnings and adequate opportunities for correction, so that the termination does not fully satisfy the material and procedural requirements for contract termination under government procurement rules. The termination also does not extinguish the Government’s obligation to pay for all completed works and to regularize the administrative consequences, while the service provider remains entitled to payment, to file objections, and to pursue legal remedies for the restoration of its rights. It is concluded that the unilateral termination in this case is weak in terms of legality, does not provide sufficient legal protection and legal certainty for the service provider, and risks undermining business confidence in government procurement, thereby indicating the need to strengthen both the regulatory framework and practice of contract termination as well as dispute resolution mechanisms in construction services procurement.

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