ABSTRACT

The Sale and Purchase Binding Agreement has developed in Indonesian land practice as a preliminary contract executed prior to the formal transfer of land rights before a Land Deed Official. Normatively, the validity of the Sale and Purchase Binding Agreement is grounded in the principle of freedom of contract as stipulated under Article 1338 of the Indonesian Civil Code, rendering it legally enforceable provided that the essential requirements of a valid agreement are satisfied. However, in practice, the Sale and Purchase Binding Agreement is frequently accompanied by a power of attorney to sell, which is susceptible to misuse as a concealed mechanism for transferring land rights without complying with the mandatory formal procedures prescribed by land law. Such practices give rise to various legal issues, including contract cancellation, claims by heirs due to the termination of authority upon the death of the principal, and legal circumvention through debt arrangements disguised as sale and purchase transactions.This study aims to analyze the legal standing of the Sale and Purchase Binding Agreement, identify patterns of misuse in practice, and formulate an appropriate legal protection framework for the parties involved. Employing normative legal research through statutory, conceptual, and case-law approaches, the findings indicate that the Sale and Purchase Binding Agreement merely creates obligatory rights and does not effectuate the transfer of title, while the use of an absolute or irrevocable power of attorney contradicts the principles of legal certainty and property protection. Therefore, stricter limitations on the use of the Sale and Purchase Binding Agreement, along with strengthened supervision by notaries and Land Deed Officials, are necessary to ensure administrative order and legal justice.

KEYWORDS: Sale and Purchase Binding Agreement, Transfer of Land Right, Legal Certainty.