Doing business together without making a written contract carries many risks. Therefore, you need to pay attention during implementation.

Legal grounds:

• Civil Code 2015.

The parties to the contract must respect and comply with the concluded agreements. However, if the agreements are not recorded in writing, but only through verbal exchanges, the implementation of the agreement as well as the resolution of disputes, if any, will face many difficulties.

Pursuant to Article 119 of the 2015 Civil Code as follows:

Article 119. Forms of civil transactions

1. Civil transactions are expressed verbally, in writing or by specific acts. Civil transactions through electronic means in the form of data messages according to the provisions of law on electronic transactions are considered written transactions.
2. In cases where the law stipulates that civil transactions must be expressed in documents that are notarized, authenticated, or registered, those regulations must be complied with.

According to the above regulations, verbal contracts are also recognized by law, except in some cases where the contract must be made in writing and must even be notarized or authenticated.

However, verbal contracts carry many risks because the contract content is not recorded in writing or audio data so that it can be read or listened to again to verify exactly what the parties have agreed to. Therefore, the content of the contract may be denied or there may be differences in the perceptions of the parties.

Therefore, to ensure their rights, the parties should pay attention to a number of issues such as:

• During the contract implementation process, documents and data that have arisen should be archived. Those documents and data can be paper documents, emails, faxes, phone messages, audio data, etc.;
• Other individuals and organizations should be invited to testify when performing work under the contract.
• If possible, what has been agreed should be recorded in writing;
• If possible, a document should be drawn up to confirm what the parties have agreed upon and the work the parties have performed.

All documents and data formed during the performance of an oral contract will be the basis for the parties, as well as the jurisdiction, to determine exactly what the parties have agreed upon.