Reformulating Contractual Freedom in Online Lending Agreements to Strengthen Consumer Legal Protection

Jhoni Jhoni, Iskandar Zulkarnaen, Kadek Rama Maheswara Puta, Yustiana Dwirainaningsih, Randy Vallentino Neonbeni

Abstract


The development of online lending services raises concerns about freedom of contract, particularly when electronic consent is obtained amid unequal bargaining positions and limited understanding of contractual terms. Although Indonesian law regulates electronic agreements and consumer protection, formal consent does not necessarily guarantee substantive contractual freedom. This study examines the principle of freedom of contract in online lending agreements and proposes its reformulation to strengthen legal protection for fund recipients. Employing normative legal research with statutory and conceptual approaches, the study qualitatively analyzes the Indonesian Civil Code, consumer protection regulations, and regulations governing Information Technology-Based Joint Funding Services (LPBBTI), using adhesion contract theory as its analytical framework. The findings reveal a gap between the formal validity of electronic consent and the quality of fund recipients' consent, reflected in contractual imbalances, insufficient understanding of material information, and inadequate standards for verifying consent. The study proposes a substantive consent framework based on three parameters: transparency of material information, verifiable understanding, and contractual fairness. It concludes that this reformulation can strengthen legal protection for fund recipients without undermining the validity of electronic contracts. Accordingly, the Financial Services Authority (OJK) should clarify technical standards for obtaining consent, while further empirical research is needed to evaluate their effectiveness.

Keywords


Freedom of Contract; Online Lending; Substantive Consent; Consumer Protection; Electronic Contracts.

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References


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DOI: https://doi.org/10.5281/zenodo.23935822

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