Legal Protection for Holders of Bad Checks as a Means of Payment in Commercial Transactions

Abstract

The study entitled “Legal Protection for Holders of Bad Checks as a Means of Payment in Commercial Transactions in Jayapura City” aims to obtain a clear understanding of the factors contributing to the issuance of bad checks and to examine the legal protection afforded to holders of bad checks as a means of payment in commercial transactions in Jayapura City. This study employs an empirical juridical approach, which places greater emphasis on field data as primary data. Nevertheless, the research begins with a review of relevant literature. The findings reveal several factors contributing to the issuance of bad checks, including weaknesses in Article 180 of the Indonesian Commercial Code, relatively strict bank policies, speculative practices by issuers as current account holders, and the failure of bank administration to implement the prudential principle. Legal protection for holders of bad checks as a means of payment in commercial transactions in Jayapura City remains inadequate, both in terms of preventive and repressive measures. Therefore, from a civil law perspective, legal protection requires the issuer to be held liable for compensating the holder and reimbursing at least the amount of funds involved in the transaction. However, if the dispute is to be resolved through civil litigation, the claim must be submitted to the competent District Court through the appropriate procedures.