Ratio Legis of Using Cross Collateral and Cross Default Clauses in Banking Credit Contract

Abstract

Existence and growth of business has been dominated by the banking system, as a buffer of economic system. There is a rapid development, due to the growth of banking industry. One of the things that develops rapidly, are the clauses in the standard contract on Banks’s Credit Contract, for example cross collateral and cross default clauses. The existence of cross collateral and cross default clauses, tangent to issues of fairness in contract especially in the field of Bank’s Credit. This research aims to ratio legis of using cross collateral and cross default clauses in Bank Credit contracts. This research used normative legal research methods, with statue approach, conceptual approach, case approach, philosophical approach, and comparative approach. Ratio legis of using cross collateral and cross default clauses in Bank’s Credit contracts are as a strict implementation of prudential Banking principles, intend to emphasize the certainty of Debtor in fulfilling all contractual obligations to the Bank, and for the efficiency of the Bank's business activities, which must be based on good faith.

Keywords: cross collateral, cross default, contract, Credit, fairness