Analysis of Management of Legal Consequences of Service Provider Default on Project Delays: A Legal Study and Relational Approach to Dispute Prevention

Abstract

Delays in construction work execution represent one of the most common forms of default that trigger disputes between employers and contractors. Within Indonesia’s civil law framework, such default entails legal consequences including delay penalties, compensation, contract termination, and enforcement of performance bonds. This study examines these legal implications under the Indonesian Civil Code (KUHPerdata), Law No. 2 of 2017 on Construction Services, and several Supreme Court decisions with permanent legal force namely Decisions No. 294 PK/Pdt/2014, No. 3053 K/Pdt/2011, and No. 60 K/Pdt/2020. The research adopts a normative juridical approach supported by secondary data from literature review and judicial case analysis. It also proposes a dispute-prevention hypothesis founded on effective communication through guanxi, dynamic relationship, and personal approach, aimed at reinforcing loyalty and preventing conflict. The findings reveal that Indonesia’s positive legal system remains sanction-oriented and emphasizes legal certainty, whereas sustainable dispute prevention requires a paradigm grounded in relational trust. Integrating relational approaches into construction contract practice may establish equilibrium between legal certainty and substantive justice.