Reconstructing Indonesian Contract Law for Long-Term Commercial Relationships: A Relational Contract Theory Framework
Abstract
Introduction: Long-term commercial relationships such as supply, distribution, franchising, outsourcing, licensing, and strategic partnerships cannot be fully governed through contractual terms determined at the time of formation. Indonesian contract law, primarily rooted in the Civil Code, continues to emphasise contractual autonomy, pacta sunt servanda, and legal certainty, but provides limited conceptual guidance for managing contractual incompleteness, continuing cooperation, and adaptation to unforeseen circumstances.
Purposes of the Research: This study examines whether the classical framework of Indonesian contract law adequately governs long-term commercial relationships and develops a relational framework for addressing contractual incompleteness while preserving contractual autonomy and legal certainty.
Methods of the Research: This study employs prescriptive normative legal research using statutory, conceptual, and historical approaches. Primary legal materials include the Indonesian Civil Code and relevant legal instruments, while secondary materials comprise scholarly literature on Relational Contract Theory, contractual incompleteness, good faith, and relational governance. The materials are analysed through legal interpretation, comparative analysis, and conceptual synthesis.
Results Main Findings of the Research: The study demonstrates that the principal limitation of the classical paradigm is not contractual autonomy or pacta sunt servanda, but the assumption that long-term contractual obligations can be exhaustively determined ex ante. It proposes a three-dimensional framework comprising formal-protective, relational-procedural, and adaptive dimensions. The framework integrates substantive certainty with procedural mechanisms for cooperation, information sharing, review, renegotiation, adaptation, and dispute prevention. Conclusion: Relational Contract Theory can therefore serve as a normative framework for reconstructing Indonesian contract law without abandoning contractual certainty. The proposed model provides a basis for legislative development, judicial interpretation, and contract drafting that preserves enforceability while enabling long-term commercial relationships to adapt to changing circumstances.
Downloads
References
Af Hällström, Anna, Petra Bosch-Sijtsema, and León Poblete. “Challenges with Collaboration: The Interaction of Formal and Informal Ties in Infrastructure Construction.” Construction Management and Economics 43, no. 1 (2025): 7–25. https://doi.org/10.1080/01446193.2024.2371153.
Amiruddin, Azwar. “Kontrak Ambigu : Bahan Bakar Utama Sengketa Bisnis Di Badan Peradilan.” Kendari Pos. June 13, 2025. https://kendaripos.fajar.co.id/2025/06/13/kontrak-ambigu-bahan-bakar-utama-sengketa-bisnis-di-badan-peradilan/.
Carter, Eleanor, Michael Gibson, Carolyn J Heinrich, and Deanna Malatesta. “A Tyranny of Metrics vs. a Tool for Learning: Exploring Performance Information Use on the Spectrum of Formal to Relational in Outcomes-Based Contracts.” Public Management Review 17, 2026, 1–26. https://doi.org/10.1080/14719037.2026.2630985.
Chao, Emmanuel. “Inter-Firm Relational Adaptation: Analysis of Dynamics from an International Perspective.” Cogent Social Sciences 10, no. 1 (2024): 2330162. https://doi.org/10.1080/23311886.2024.2330162.
Colombi Ciacchi, Aurelia, and Dietmar von der Pfordten. “Exploring the Relationship between Law and Governance: A Proposal.” The Theory and Practice of Legislation 11, no. 2 (2023): 151–67. https://doi.org/10.1080/20508840.2023.2215657.
FitzGerald, Clare, Stefanie Tan, Eleanor Carter, and Mara Airoldi. “Contractual Acrobatics: A Configurational Analysis of Outcome Specifications and Payment in Outcome-Based Contracts.” Public Management Review 25, no. 9 (2023): 1796–1814. https://doi.org/10.1080/14719037.2023.2244501.
Gratzke, Lennart, Markus Philipp Zimmer, and Paul Drews. “IT Outsourcing Relationships in the Context of Digital Transformation: From Transactional Relationships to Ecosystem Partnerships.” Information Systems Management 43, no. 1 (2026): 65–84. https://doi.org/10.1080/10580530.2025.2575172.
Klijn, Erik Hans, Samantha Metselaar, and Rianne Warsen. “The Effect of Contract- and Network Management on Performance and Innovation in Infrastructure Projects.” Public Money & Management 44, no. 5 (2024): 428–37. https://doi.org/10.1080/09540962.2023.2204533.
Koppenjan, Joop, Erik-Hans Klijn, Stefan Verweij, Mike Duijn, Ingmar van Meerkerk, Samantha Metselaar, and Rianne Warsen. “The Performance of Public–Private Partnerships: An Evaluation of 15 Years DBFM in Dutch Infrastructure Governance.” Public Performance & Management Review 45, no. 5 (2022): 998–1028. https://doi.org/10.1080/15309576.2022.2062399.
Li, Xiaolin, Yilin Yin, Wenqing Mu, Huimin Li, Ruihua Liu, and Ruirui Zhang. “Re-Examining the Link between Relational Governance and Project Management Performance: An Integrated Framework.” Journal of Asian Architecture and Building Engineering 23, no. 4 (2024): 1407–27. https://doi.org/10.1080/13467581.2023.2270012.
Luo, Yazhuo, and Yuanze Chen. “How Does Contractual Governance Affect Construction Project Performance? The Mediating Role of the Contractor’s Behavior.” Journal of Asian Architecture and Building Engineering 24, no. 5 (2025): 3879–97. https://doi.org/10.1080/13467581.2024.2396606.
MacMillan, Catharine. “Covid-19 and the Problem of Frustrated Contracts.” King’s Law Journal 32, no. 1 (2021): 60–70. https://doi.org/10.1080/09615768.2021.1885328.
Meerkerk, Ingmar van, Rianne Warsen, and Erik-Hans Klijn. “Boundary Spanning for Contractual Fairness in Public Infrastructure Projects: Its Impact on Performance and Innovation.” Public Management Review 26, no. 7 (2024): 2122–43. https://doi.org/10.1080/14719037.2023.2262474.
Mouzas, Stefanos, and N T Sudarshan Naidu. “Overcoming Contract Incompleteness: Evidence from Long-Term Supply Relationships.” Production Planning & Control 36, no. 9 (2025): 1155–74. https://doi.org/10.1080/09537287.2024.2348518.
Rosander, Lilly, and Anna Kadefors. “Implementing Relational Contracting in A Public Client Organization: The Influence of Policy Clashes, Resources and Project Autonomy.” Construction Management and Economics 41, no. 8 (2023): 651–69. https://doi.org/10.1080/01446193.2023.2190992.
Sandoval, Juan, Ilias Krystallis, David Whitmore, and Martina Huemann. “Managing Strategic Relationships in Inter-Organisational Projects.” Production Planning & Control 37, no. 5 (2026): 463–80. https://doi.org/10.1080/09537287.2025.2554161.
Satheesh, Shreya Anna, Stefan Verweij, Ingmar van Meerkerk, Tim Busscher, and Jos Arts. “The Impact of Boundary Spanning by Public Managers on Collaboration and Infrastructure Project Performance.” Public Performance & Management Review 46, no. 2 (2023): 418–44. https://doi.org/10.1080/15309576.2022.2137212.
Singh, Prakash J, Ananya Bhattacharya, and Alka Ashwini Nand. “Impact of Relational Norms on Performance: Interaction between Solidarity, Power and Flexibility in Buyer-Supplier Relationships.” Production Planning & Control 36, no. 12 (2025): 1623–36. https://doi.org/10.1080/09537287.2024.2389894.
Spithoven, Antoon. “Theory and Reality of Cryptocurrency Governance.” Journal of Economic Issues 53, no. 2 (2019): 385–93. https://doi.org/10.1080/00213624.2019.1594518.
Tukamuhabwa, Benjamin R, Henry Mutebi, Enoth Akandwanaho, Levi Kabagambe, and Ivan Tumukunde. “Enhancing Water and Sanitation Project Performance in a Developing Economy: Role of Governance Mechanisms and Risk Management Practices.” Cogent Business & Management 10, no. 3 (2023): 2263994. https://doi.org/10.1080/23311975.2023.2263994.
Zhang, Lihan, Tianhuan Ding, and Yongcheng Fu. “Do Measurement Methods Matter? A Meta-Analysis of Antecedents and Outcomes of Contractual Governance in Interorganisational Relationships.” Production Planning & Control 36, no. 1 (2025): 110–26. https://doi.org/10.1080/09537287.2023.2255869.
Copyright (c) 2026 Fatihani Baso, Sayidah Asma Basir, Andi Novita Mudriani Djaoe, Suriani Suriani (Author)
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Authors who publish their manuscripts in this Journal agree to the following conditions:
- The copyright in each article belongs to the author, as well as the right to patent.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work.
- Authors have the right to self-archiving of the article (Author Self-Archiving Policy)
