Executive summary - Clickwrap type terms of use will probably be recognized in Indonesia but note the importance of having records of confirmation.
Outline
A. Contract Formation under the Indonesian Civil Code
At the outset, it is necessary to understand the basic requirements of contract formation in Indonesia.
The Civil Code in Article 1320 stipulates in the general term that "there must be assent of the individuals who are bound thereby". The Indonesian Civil Code does not specifically stipulate paper documents or wet ink signatures. But this is what the Indonesian courts have come to expect in order to prove the existence of a contract.
The conventional view of a valid contract is therefore that captured in a formal document with both parties appending their wet ink signature onto a paper document. This view is not likely to change in the near future. So, it will not be possible to apply common law concepts of contract formation such as contract by conduct or contract by correspondence - where the act of assent is not captured in the same document.
The above sets the backdrop in the following discussion on the validity and enforceability of "electronic contracts" which by its very nature seeks to do away with the above traditional notion of contract under the Civil Code.
B. ITE Law - Digital signature
Electronic contract first gains its recognition under Law No. 11 of 2008 on Electronic Information and Transactions (the “ITE Law”) in Article 18 Paragraph (1):
Article 18 ITE Law
Electronic Transactions which are made into an Electronic Contract are binding on the parties.
Further, under Government Regulation No. 71 of 2019 on the Organization of Electronic Systems and Transactions (“GR 71/2019")
Article 1 point (22) GR 71/2019
Digital Signature is a signature which consists of Electronic Information which is adhered to, associated or related to other Electronic Information which is utilized as a verification and authentication tool.
The above notwithstanding, Articles 60 paragraph (2) of GR 71/2019 provides that digital signatures can either be certified or uncertified.
Article 60 paragraph (2) and (4) GR 71/2019
(2) A Digital Signature shall consist of:
(4) The Uncertified Digital Signature as referred to in paragraph (2) letter b is made without using the services of the Indonesian Electronic Certification Provider.
This opens the door to "uncertified Digital Signature" which could possibly include overseas digital signature framework that are not certified by Indonesian certification institutions. However, note this caveat on evidential value as provided the Elucidation to Article 60 Paragraph (2) of GR 71/2019:
Elucidation of Article 60 paragraph (2) GR 71/2019
The legal implications of the use of certified or non-certified Digital Signatures shall affect the strength of the evidentiary value.
It is arguable that "uncertified Digital Signatures" extends to scan of a wet ink signature might also qualify as an uncertified signature – although the evidential weight is probably low.
Clickwrap terms of use – However, uncertified signatures notions will probably does not extend to click wrap agreements where the act of assenting is a temporal act of clicking a virtual button on the computer display or the act of entering into a course of dealing – it does not result in any signatures in the tangible sense. This temporal act is not captured by anything visible and readily recognizable by the human eye as a signature in the traditional sense. Nevertheless, it seems generally accepted that clickwrap agreements are valid in Indonesia.
C. Clickwrap Agreement Legality
There are two issues in connection with clickwrap agreements:
Contract Formation – clickwrap agreements are still not on firm ground as discussed above. It is arguable that the following provision in GR 71/2019 supports the recognition of clickwrap agreements where there is no appending of signatures (wet ink or electronic).
On the point of contract formation, it will be necessary to refer to two sets of government regulations:
The relevant regulations are set out below:
Article 46 GR 71/2019
Elucidation to Article 46 Paragraph (1) letter (b) GR 71/2019
Electronic Transactions can include several forms or variants, including:
"contractual relationship is completed electronically" arguably includes clickwrap. By this interpretation, a contractual relationship can be said to have been completed through the conduct of the parties such as the act of checking a clickwrap button.
Another source of reference is GR 80/2019. Article 40 of GR 80/2019 does not add much to the above provision from of GR 71/2019:
Article 40 GR 80/2019
Electronic Offerings shall be declared as accepted if the accepting party already perform Electronic Acceptance toward the terms and conditions delivered in Electronic Offerings.
The definition of Electronic Offering and Electronic Acceptance set out as below:
Article 1 point (14) and (15) GR 80/2019
Although the above suggest that explicit assent is required, this seems to be softened by another provision in the same regulation Article 47 - a contract can be concluded "can be made from the results of interaction with an automatic transaction device organized by" the platform.
Article 47 GR 80/2019
(1) An Electronic Contract can be made from the results of interaction with an automatic transaction device organized by Business Practitioners.
(2) The parties cannot deny the validity of automatically made Electronic Contract unless it can be proven that the said automatic system is not working accordingly.
(3) In the event of Business Practitioners uses an automatic translation device, then all losses incurred due to the use of said automatic translation device are the responsibility of Business Practitioners
Article 46 of GR 71/2019 and Article 47 of GR 80/2019 seems to support for clickwrap type arrangements.
Record of the agreed terms
However, it would be of no practical effect if it is not possible to prove in court the entering of a clickwrap agreement – usually in the event of a dispute. To do this, it should at least have available tangible contemporaneous records of the act of checking and the terms agreed to.
Contractual terms in online contracts – Assuming that contract formation is not an issue, there is then the issue of proving the terms and conditions that comprise the agreement. Bearing in mind that any record of the terms and conditions are in digitized form tucked away in the ether world repository. Even if such terms and conditions can be printed when it becomes necessary because a dispute has arisen, there is still the challenge of proving that the printed terms and conditions were the ones to govern the agreement at the time of the user's act of clicking.
This brings us to the point that the act of clicking is purely temporal. Any subsequent printout will not be a contemporaneous record of the terms and conditions. In a more developed jurisdiction, evidence will be called to prove that the printed terms and conditions are the correct copy of the version stored in the computer system - the version of terms and conditions that the user previously gave his or her assent to.
Indonesian courts may not be receptive to such after-the-fact testimony to prove contemporaneous terms and conditions of online contracts. They are accustomed to printed agreements with wet ink signatures signifying parties' assent to the governing terms. Indonesian judges have the proclivity of dismissing claims where claimants veer off from their strict expectations of evidential proof. Any attempt to prove agreements other than the traditional mode might be at risk of such rejection. See below under Best Practice where we propose record keeping of clickwrap agreements. Further reasons for the need to keep such record is found in GR 80/2019.
Article 46 GR 80/2019
(1) Electronic Acceptance from Consumers should be responded by Business Practitioners within a certain timeframe.
(2) The response as referred to in paragraph (1) should be carried out in the form of Electronic Confirmation and/or non-electronic confirmation that can be stored and used as proof of agreement.
(3) Electronic Confirmation can be carried out through the act of identifying, correcting or modifying data input or purchase order form, or providing a statement of already obtained sufficient information and/or clearly conveying the intention to buy.
(4) The contents of Electronic Confirmation must be the same as the Electronic Offering information
Confirmation is important because the validity of the contract can be affected in the event that there is any discrepancy on the content of the terms of the agreement - Article 44 paragraph (2) of GR 80/2019.
Because of the need for confirmation, it may therefore be difficult to argue that the current framework supports browse wrap contacting.
Consent under Personal Data Protection Act
In this context, data subject consent probably comes to the fore.
The requirement for obtaining consent can be said to be well defined - Article 22 of Law No. 27 of 2022 on Personal Data Protection (the “PDPA”):
Article 22 PDPA
What is clear is that a positive act indicating assent is required. It cannot be implicit - that the data subject is deemed to give consent by continued use of the services on the website.
Clickwrap is therefore a viable option even if the PDPA quite clearly rules out implicit assent.
The act of clicking is nevertheless a temporal act - and the backend record might show no more than the IP address of the data subject (usually the only identity available to the data controller) and the act of checking off the box, and the associated set of terms and conditions. Note that the IP address is not a constant that is always associated with the same data subject. It is therefore not a reliable means to identify the user. If the identification of the data subject is not submitted prior to clicking, it can be foreseen that it will be difficult to prove the identity of the person who "clicked" at the material time.
Best Practice in Clickwrap Agreement Management
The primary consideration would be record keeping of the act of clicking. Bearing in mind that IP address as the source of the click will not be sufficient to identify the user without more such as name and residence. The system should therefore at least be set up with a prompt for the data subject to submit his or her name and other identifiers.
An automated system should be set up to generate record keeping. Whenever a user checks off the click box, the record should be automatically generated with the following data field:
The record generated should ideally be captured in an email to the user serving as a contemporaneous record.
The confirmation email to the user should be served as a record of the consent and the terms agreed to. A system should be set up to safe keep emails. Should any litigation arise, the email will serve as a contemporaneous record of the act of assent and the terms assented to.
The back-end process should be documented should the veracity of the records be challenged.
The above makes no prediction of how the Indonesian court will eventually rule on the question of a click wrap contract. Each case will have to be considered on its own merits. Professional advice should be sought in respect of your business practice.
