LANGUAGE REQUIREMENTS IN MULTILINGUAL AGENTS FOR CONTRACTS IN INDONESIA: AN OVERVIEW OF LANGUAGE PREFERENCE IN MULTILINGUAL AGREEMENTS

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Jack Wiston

Introduction

In Indonesia, contracts serve as legally binding agreements between parties, outlining the terms and conditions of their business or personal arrangements. Given the country’s diverse linguistic landscape and interest of foreign business and investment, language requirements on contracts play a crucial role in ensuring clarity and enforceability. Understanding the language preferences in multilingual agreements is essential for businesses and individuals engaging in transactions within Indonesia’s dynamic market.

1. Official Languages of Indonesia

Indonesia recognizes Bahasa Indonesia as its official language. It serves as the lingua franca for communication across the country’s vast archipelago, encompassing more than 700 spoken languages. Article 31 Law No. 24/2009 states that Bahasa Indonesia is to be used in all official government activities, education, communication and legal matters.

2. The Language Law: Law No. 24 of 2009

The legal foundation for language requirements on contracts in Indonesia is Law No. 24 of 2009 concerning National Flag, Language, Coat of Arms, and Anthem (Undang-Undang Republik Indonesia Nomor 24 Tahun 2009 tentang Bendera, Bahasa, Lambang Negara, dan Lagu Kebangsaan). Commonly known as the “Language Law,” this legislation governs the use of languages in various aspects of Indonesian society, including contracts and legal documents.

3. Language Options in Contracts

Although Bahasa Indonesia is the official language, Article 33 of the Language Law permits contracts in Indonesia to be drafted in multiple languages to accommodate parties with different linguistic backgrounds or international entities. This multilingual approach can be advantageous for clarity and avoiding misunderstandings between parties.

4. Preference for Bahasa Indonesia

In Indonesia, there is a preference for Bahasa Indonesia in legal documents, including contracts. Using Bahasa Indonesia in contracts ensures that all parties can fully comprehend the terms and conditions, thus reducing the likelihood of disputes arising from language barriers. Additionally, Indonesian courts and authorities are more familiar with Bahasa Indonesia, making the interpretation and enforcement of contracts more straightforward.

5. Bilingual Contracts

In certain circumstances, bilingual contracts may be employed to cater to the needs of parties with varying language capabilities. These bilingual contracts typically feature both Bahasa Indonesia and the foreign language, often English. English is widely used in international trade and business transactions, making it the most common secondary language in bilingual contracts.

6.  Equivalence of Contract Versions

When a contract is presented in both Bahasa Indonesia and a foreign language, it is essential to ensure that both versions convey the same meaning and intent. In the event of any discrepancies or inconsistencies between the two versions, the Bahasa Indonesia version typically takes precedence in Indonesian courts. However, an agreement can be made between the parties involved for the alternative language to take precedent if needed. It is vital for parties to exercise caution during translation and drafting to avoid potential ambiguities or unintentional variations.

7. Legal Requirements and Notarization

In Indonesia, certain types of contracts may require notarization for validity and enforceability. While Bahasa Indonesia contracts can be notarized directly, bilingual contracts often undergo a notarization process that includes the verification of both language versions.

8. Regional Variations

In areas where a particular regional language is predominantly spoken, such as Javanese, Sundanese, or Balinese, parties may choose to include a translation of the contract in the local language alongside Bahasa Indonesia. This practice helps to ensure that all parties fully comprehend the agreement’s terms and conditions.

Conclusion

In Indonesia, contracts serve as crucial instruments for formalizing agreements in various sectors. While Bahasa Indonesia remains the preferred language in legal documents, the option of using bilingual contracts to accommodate parties with diverse linguistic backgrounds is common. The Language Law also permits English or another language to take precedent in private contracts if required. Ensuring linguistic clarity and equivalence in multilingual contracts is essential to avoid potential disputes and to uphold the enforceability of the agreements. As Indonesia’s business landscape continues to expand, understanding the language requirements in contracts, as outlined by the Language Law, is fundamental for fostering smooth and successful transactions within the country.

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