Proceedings of the 1st International Forum on Psychology, Law, and Education (IFPLE 2025)

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Legal Certainty and Justice in Bank Credit Agreements: Reconstructing Default through a Pancasila-Based Hermeneutic Approach

Authors
Aspin Aruan1, *, Roswita Sitompul1, Azharuddin Azharuddin1
1Doctoral Program in Law, Universitas Prima Indonesia, Medan, Indonesia
*Corresponding author. Email: aspinaruan1@gmail.com
Corresponding Author
Aspin Aruan
Available Online 3 January 2026.
DOI
10.2991/978-2-38476-531-7_49How to use a DOI?
Keywords
Reconstruction; Default; Bank Credit; Pancasila; Hermeneutics
Abstract

Bank credit agreements are legal instruments that set out the obligations of debtors and the sanctions imposed in the event of default. The Indonesian Civil Code regulates the forms and consequences of default in a normative manner but does not provide criteria for exceptions when debtors face objective impediments. As a result, judicial practice in Indonesia-particularly in small claims procedures tends to interpret default in a legal-formalistic manner, emphasizing delays or breaches of contractual clauses. This study seeks to reconstruct the concept of default so that it aligns with the values of Pancasila through a hermeneutic legal approach. The method employed is normative legal research using statutory, case, and hermeneutic approaches. Six court decisions from 2019 to 2024 were analyzed. The findings reveal that judges continue to emphasize formal legal certainty while neglecting the values of humanity, deliberation, and social justice. Accordingly, a model of civilized legal certainty is needed, incorporating good faith assessment, mandatory deliberation, and proportional sanctions. This study concludes that a Pancasila-based interpretation of default can provide substantive legal certainty that is more just, balanced, and humane

Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 1st International Forum on Psychology, Law, and Education (IFPLE 2025)
Series
Advances in Social Science, Education and Humanities Research
Publication Date
3 January 2026
ISBN
978-2-38476-531-7
ISSN
2352-5398
DOI
10.2991/978-2-38476-531-7_49How to use a DOI?
Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Aspin Aruan
AU  - Roswita Sitompul
AU  - Azharuddin Azharuddin
PY  - 2026
DA  - 2026/01/03
TI  - Legal Certainty and Justice in Bank Credit Agreements: Reconstructing Default through a Pancasila-Based Hermeneutic Approach
BT  - Proceedings of the 1st International Forum on Psychology, Law, and Education (IFPLE 2025)
PB  - Atlantis Press
SP  - 489
EP  - 498
SN  - 2352-5398
UR  - https://doi.org/10.2991/978-2-38476-531-7_49
DO  - 10.2991/978-2-38476-531-7_49
ID  - Aruan2026
ER  -