FINANCING LAW ASSIGNMENT

Name

: Noorila Ulfa Nafisah

Student number

: 031311133081 (A-3)

A. Differences among Leasing, Hire Purchase and Consumer Financing

No.
Category
1. Specific Legal
Basis

2.

The objects

3.

The parties
involved
Types of
agreement
within
Source of funds
to purchase the

4.

5.

Leasing
Presidential Regulation No. 9 of
2009, Minister of Finance Decree
No. 1251/KMK.013/1988, Minister
of
Finance
Decree
No.
634/KMK.013/1990 and Minister of
Finance
Decree
No.
1169/KMK.01/1991
Usually, for goods that are needed
for running a business (capital
goods),
either
movable
or
immovable goods.

Hire Purchase
Consumer Financing
Minister of Trade and Cooperation Within Presidential Decree No 61 of
Decree No. 34/KP/II/80 but is 1988 and Minister of Finance Decree
repealed by Minister of Trade No. 448/KMK.017/2000
Regulation
No.
21/MDAG/PER/10/2005

Usually, for movable goods without Usually, for movable goods or

proof of ownership.
immovable goods needed by the
consumer to be used for daily needs.
The goods commonly attached with
proof of ownership.
Lessor, lessee and supplier.
Lessor/seller and lessee/buyer.
Creditor (finance company), debtor
(consumer) and supplier.
1. Lease agreement;
Hire
purchase
agreement 1. Accounts payable agreement;
2. Purchase agreement (if the option (combination on the essence of lease 2. Agreement on fiduciary.
right is executed).
agreement and purchase agreement)
Lessor pays the goods from supplier. The goods is already owned by the The finance company gives fund to
seller/lessor.
the consumer to purchase the goods
Page 1 from 5

No.

6.

7.

8.

9.

Category
goods in initial
state
Owner of the
goods during the
term (bearing the
risk)
Transfer of
ownership rights
over the goods
(levering)
Owner of the
goods after the
term
Availability of
collateral

Leasing

Hire Purchase

Consumer Financing
from the supplier.

Lessor.

Lessor/seller.

Consumer.

Through the use of option rights and

legal actions. The legal actions
comprising leasing agreement and
purchase agreement.

After the last payment from the

buyer or the time the payment receipt
acquired, thus by the law, the goods
is owned by the buyer.

Lessee if using the option right

(finance lease); lessor if there is no
option right (operating lease).
No need specific collateral. In
practice, the goods itself becomes
object of material collateral.

Buyer.

After the consumer buys the goods

from the seller by way of fund given
by finance company over the
signature of accounts payable
agreement.
Consumer.

No need specific collateral. In The purchased goods is under the

practice, the goods itself becomes fiduciary
(fiduciare
eigendom
object of material collateral.
overdracht).

Page 2 from 5

B. Similarities among Leasing, Hire Purchase and Consumer Financing

1. Leasing, hire purchase and consumer financing are stipulated under the same regulation,
that is Presidential Regulation No. 9 of 2009 concerning Financial Institution. Although
hire purchase is not specifically stated, hire purchase is also a recognized financial
institution.
2. All of them are included into types of business in finance company according to article
1.2 of Presidential Regulation No. 9 of 2009. They are used to give aid for the business
entity or personal entity to finance the needs, in the form of providing either fund or
capital goods. Such provision does not undergo credit facilities or capital market activity.
3. Since the three of them are included into financial institution, the company must be in the
form of either Limited Liability Company or Cooperative. The shares of the Limited
Liability Company can be owned by Indonesian citizens and/or Indonesia Legal Entity;
or foreign citizens or foreign legal entity. However, the ownership of foreign legal entity
shall not exceed 85% from the paid-up capital. Those are stipulated under article 6 and 7
of Presidential Regulation No. 9 of 2009.
4. Those three financial institutions shall not withdraw funds directly from public in the
form of demand deposits, time deposits, and savings, because their characteristics are
different and separated from the banking products, even though they can also exert with
prudential principles as being used by the bank in the case of issuing the promissory
note.
5. In dealing with such financial institution, between the fund providers and the beneficiary
(party who needs the fund) underlie their legal relationship on the contract that are
agreed by the parties before executing their performances.
6. Leasing, hire purchase and consumer financing contracts are included into innominate
contract, since they are not regulated specifically in the Burgelijk Wetboek. They are the
contracts that appear and develop by the society so that they are stipulated under specific
regulations i.e Presidential Regulations.
7. Since the aims of leasing, hire purchase and consumer financing is to give fund to the
needed parties, the payment method is in the form of periodical payment. Therefore, the
parties in the contract have to agree on the due date and the goods ownership status as
well after the full payment.

Page 3 from 5

C. Comparison of Novation, Subrogation and Cessie

No
.
1.

2.

Novation
Legal basis:
Book III BW, article 14131424 BW
According to article 1413
BW, novation enables the
renewal of:
a. object agreement;
b. debtor; or
c. creditor.

Subrogation

Cessie

Legal basis:
Legal basis:
Book III BW, article 1400- Book II BW, article 6131403 BW
624 BW.
Enables the replacement
It is a replacement way of
of creditor, because there
piutang atas nama (op
is a shift from old creditor
naam).
to the new creditor.

3.

According to article 1414

BW, the novation subject
requirement is the capable
persons in obligations.

No specific conditions for

the subrogation subject,
hence it refers to article
1329 BW.

4.

Parties
involved
are
Parties
involved
are debtor, creditor and third
creditor, debtor and third party to give loan to
party as the replacement.
debtor for paying its debt
to the creditor.

5.

Objects of novation are

movable or immovable
goods, either tangible or
intangible.

6.

Novation occurs due to the

agreeement of parties to
renew the debt.

7.

The
agreement
is
abolished to reemerge as a
continuation of the old
agreement.

8.

After novation, the debt is

still paid by the debtor.

No specific conditions for

the subrogation subject,
hence it refers to article
1329 BW. However, due
to its scope, subject of
cessie can be either
individuals
or
corporations.
Parties
involved
are
cedent (creditor), cessus
(debtor), and cessionaris
(third party to receive
right to claim from old
creditor).

Objects of subrogation are

Objects of cessie are
movable or immovable
piutang atas nama or
goods, either tangible or
other intangible goods.
intangible.
Cessie occurs due to the
Subrogation can occur due agreement of parties. It
to laws or agreement.
can also happen to some
civil actions.
The
agreement
is
abolished for one second The agreement is not
but reemerged again. It is abolished, but only shifted
abolished due to the to the new creditor.
payment.
After subrogation, the debt After cessie, receivables is
is paid by the new sold from the old creditor
creditor.
to the new creditor.
Page 4 from 5

No
.

9.

10.

11.

12.

Novation

Subrogation

All parties involved act

actively. Since basically, it
is as a result of three
parties negotiation i.e
There is a time when the
creditor, debtor, and third
debtor acts passively.
party
to
agree
on
abolishing
the
old
agreement and replacing it
to the new one.
Basically, subrogation is
The accessoir agreement an accessoir agreement,
is also abolished if the hence it also follows up
main
agreement
is when the new creditor
abolished.
follows
the
main
agreement.

Cessie

The debtor is always

passive since he only get
the notification to whom
he shall pay (the new
creditor).

The accessoir agreement

is not abolished, but only
replaced to the new
creditor.

There must be deed either

It does not absolutely need It does not absolutely need
authentic deed or deed
to use deed.
to use deed.
signed under hand.
Notification is needed, but
it is not the conditions of
There
must
be
Notification is not needed, subrogation validity. Such
notification,
because
because novation happens notification
must
be
cessie can only be
due to the agreement of all expressly stated so that the
happended after the debtor
parties.
new creditor can obtain
is given the notice.
his rights/payment from
the debtor.

Page 5 from 5