The Principle of Rebus Sic Stantibus as an Alternative Solution for Banks in Negotiating Bad Debt Settlement Due to Force Majeure after Earthquake in the Special Region of Yogyakarta, Indonesia

Abstract

The research is conducted to answer the research problem, which is whether the principle of rebus sic stantibus can be used as an alternative solution for banks in negotiating bad debt settlement due to force majeure after earthquake in the Special Region of Yogyakarta, Indonesia. The results of the research show that the principle of rebus sic stantibus can solve the problems of changes in circumstances. This indicates that the principle of pacta sunt servanda can be substituted by the principle of rebus sic stantibus. This principle is based on the assumption that an agreement can be terminated if the circumstances change since the period of time when the agreement was made. Therefore, based on the principle of rebus sic stantibus, the parties who agree on a certain agreement is allowed to postpone their involvement in implementing the agreement, and they are even justified to withdraw from the agreement. The conclusion of the research is that the principle of rebus sic stantibus is appropriate to be implemented by banks in solving the problems of changes in circumstances in negotiating bad debt settlement due to force majeure after earthquake.

Keywords: Force Majeure, principle of rebus sic stantibus