Legal Protection for Cooperatives Whose Customers Commit Breach of Contract: Study of Decision Number 293/Pdt.G/2021/PN MDN

Volume 6, Number 1, 2025 https://ijble.com/index.php/journal/index Legal Protection for Cooperatives Whose Customers Commit Breach of Contract (Study of Decision Number 293/Pdt.G/2021/PN MDN) Titania Melinda Safira1, Rodiatun Adawiyah2 Universitas Prima Indonesia , Corresponding authors: ABSTRACT This study aims to analyze the legal considerations taken by judges in cases of breach of contract (default) by customers against cooperatives, based on Decision Number 293/Pdt.G/2021/PN Mdn, and to identify appropriate legal measures that can be pursued by cooperatives in resolving such cases. The research employs a normative legal method with a case study approach. Data were collected through a literature review and analyzed using a descriptiveanalytical method. The findings reveal that the judge's considerations are influenced by several factors, including the terms of the contractual agreement, the supporting evidence submitted by the parties, and the contextual impact of the COVID-19 pandemic. In dealing with cases of default, cooperatives may adopt persuasive measures and engage in alternative dispute resolution mechanisms. This study contributes theoretically to the field of legal studies, particularly in understanding judicial reasoning in civil cases, and provides practical insights for cooperatives in managing contractual disputes effectively. Keywords: legal protection, cooperatives, breach of contract, default, dispute resolution NTRODUCTION In fulfilling daily needs, individuals inevitably require financial resources to access goods and services. As such, money functions not only as a medium of exchange but also as a tool to support various economic transactions (Nopirin, 2000). In this regard, the presence of financial institutions that are capable of managing and distributing financial resources becomes crucial. Among these institutions, cooperatives play a significant role, particularly in the context of the Indonesian economy, where they are viewed as pillars of people-based economic empowerment. Cooperatives in Indonesia are formalized under Law Number 25 of 1992 concerning Cooperatives, which defines cooperatives as business entities composed of individuals or cooperative legal entities with a foundation of mutual cooperation and democratic management. Muhammad Hatta, as the “Father of Indonesian Cooperatives,” emphasized that cooperatives are collective economic institutions that enable individuals with limited financial capacity to improve their welfare through shared ownership and collective action (Hatta, 1954). One of the most prevalent types of cooperatives is the Savings and Loan Cooperative (Koperasi Simpan Pinjam), which serves to provide financial assistance through savings collection and credit distribution. These activities are governed under Government Regulation Number 9 of 1995 concerning the Implementation of Savings and Loan Activities by Cooperatives. According to Article 1 of the regulation, the savings and loan function involves the mobilization and distribution of funds through savings and credit activities for members, prospective members, other cooperatives, or members of other cooperatives. 753 Volume 6, Number 1, 2025 https://ijble.com/index.php/journal/index Specifically, Article 1 paragraph (4) defines savings as funds entrusted by members and other related parties in the form of deposits or time deposits, while paragraph (7) defines loans as the provision of money or receivables based on an agreement between the cooperative and another party, where the borrower has an obligation to repay the amount within a certain period along with any agreed interest. However, despite the ideal function of cooperatives as financial intermediaries rooted in trust and mutual benefit, their operational sustainability can be significantly disrupted when borrowers (customers) fail to fulfill their contractual obligations. Such breach of contract—or default—can lead to financial instability within the cooperative, disrupt liquidity, and threaten the rights of other members who also rely on the institution. This issue is reflected in the case documented under Decision Number 293/Pdt.G/2021/PN MDN, where a customer obtained a loan amounting to IDR 1,000,000,000 (One Billion Rupiah) with a 60-month term, yet failed to meet the repayment terms stipulated in the contract. The resulting default triggered legal proceedings aimed at resolving the dispute and protecting the cooperative’s legal and financial interests. In the context of contract law, default (wanprestasi) is defined as the failure of a party to perform obligations as specified in an agreement without a valid legal reason (Subekti, 2001). According to Article 1243 of the Indonesian Civil Code (KUHPerdata), such failure entitles the aggrieved party to seek compensation. Cooperatives, in this sense, are entitled to legal remedies to uphold their rights, including access to collateral, mediation, or court enforcement mechanisms. Legal protection for cooperatives is vital not only for dispute resolution but also for the maintenance of institutional trust, operational continuity, and equitable treatment among members. Drawing from the theory of legal protection as posited by Satjipto Rahardjo (2000), the law must act not only reactively—after harm occurs—but also preventively to ensure that vulnerable parties, such as cooperatives comprised of smallscale economic actors, are safeguarded from potential contractual breaches. Thus, the legal study of this case aims to examine the extent to which existing legal frameworks offer protection to cooperatives in the face of customer defaults, and how legal certainty, justice, and benefit (the three pillars of Gustav Radbruch’s theory of law) can be ensured in the practice of cooperative-based financial services. METHOD This research adopts a normative juridical approach, also known as doctrinal legal research, to examine the legal principles and statutory provisions relevant to cases of breach of contract, particularly those involving cooperatives. The study focuses on analyzing legal norms found in statutory regulations such as the Indonesian Penal Code (KUHP) and cooperative laws, as well as relevant legal theories and concepts. This approach is essential for understanding how the law conceptualizes obligations, default, and legal remedies available to cooperatives when customers fail to fulfill contractual agreements, as exemplified in Decision Number 293/Pdt.G/2021/PN MDN. Additionally, the study employs an analytical descriptive approach to systematically describe and interpret the legal facts surrounding disputes involving financial cooperatives. To strengthen the analysis, the research integrates three complementary legal research strategies: the statute approach, to examine relevant laws and regulations; the conceptual approach, to explore key legal definitions and 754 Volume 6, Number 1, 2025 https://ijble.com/index.php/journal/index doctr (...truncated)