Freedom of Contracts and Dispute Settlement Between Conventional Banking and Sharia Banking

Budiharto, Edy Sismarwoto
International Journal of Economics and Business Administration, Volume VIII, Issue 1, 285- 291, 2020
DOI: 10.35808/ijeba/438


Purpose: This study aims to investigate the freedom of contract in conventional and sharia banking interpreted as an event of signing a credit agreement that raises the rights and obligations of the parties. Design/methodology/approach: The research design was qualitative, and the method was conducted by using a normative juridical method on a philosophical approach. Findings: The results showed that based on some lawsuit cases, in the conventional banking agreement, the customer submits the law to the credit rules made by the banking system. In Islamic banking agreements, the bank and the customers resolve the dispute to the existing agreement schemes in the sharia economic legal system. The results also reveal the construction of values contained in the principle of freedom of contract in each banking agreement. Practical implications: This paper can be used by management and legal experts to identifying the differences in principle of freedom of contract in conventional and sharia banking as a measure of justice in civil agreements in business law. Originality: This paper originally highlight that differences in principles and mechanisms for contracting affect procedures in dispute resolution.

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