Ideal Formulation of Legal Protection Against Unilateral Termination of Contract and Delay in Payment for Services by the Government Based on the Values of Justice

Abstract

Government construction work contracts play a crucial role in infrastructure development and must ensure legal certainty and protection for service providers. However, in practice, unilateral termination of contracts by the government without proper procedures frequently occurs, as seen in the case of the contract termination between the Kediri City Government and PT SGU KSO. The purpose of this study is to analyze the regulations governing construction service providers in situations of unilateral contract termination and delayed payment by the government, which have not yet reflected principles of justice, and to examine the ideal formulation of legal protection against unilateral contract termination and delayed payment by the government based on the value of justice. The methodological approach used in this thesis is normative juridical research, with a descriptive-analytical research specification. The theories employed include the theory of justice and the theory of legal protection. The results of this study indicate that regulations governing construction service providers in government procurement contracts have not yet fully reflected the value of justice, as the relationship between the government as the service user and contractors as service providers remains imbalanced. The government holds a dominant position in drafting contract clauses, controlling project implementation, and determining sanctions, while contractors often have no room for negotiation and must accept standard clauses that are one-sided. Contractors are subjected to strict sanctions such as late penalties, unilateral contract termination, and blacklisting, yet when the government defaults, no equivalent sanction mechanism exists. This imbalance is evident in the Kediri and Pekanbaru cases, which demonstrate that current regulations are not equitable. The ideal formulation of legal protection for construction service providers requires the presence of fair norms that place the government and service providers on an equal footing, particularly regarding the risks of unilateral contract termination and delayed payments. The government is obligated to uphold the principle of justice through contracts that protect the rights of service providers. In practice, many government contracts do not include penalty clauses for delayed payments or unilateral termination. As a result, construction service providers occupy a weak position because they lack certainty regarding compensation or remedies when the government neglects its obligations. Based on Satjipto Rahardjo's theory of legal protection, standard contractual clauses must be reformulated to include the government's obligation to pay penalties, compensation, or damages when it commits a breach of contract.