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All Journal IJEBD (International Journal Of Entrepreneurship And Business Development)
Augustinus Setijanto
Civil Engineering Doctoral Program, Universitas Tarumanagara - Jakarta, Indonesia
Economics, Econometrics & Finance

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Managing Extension of Time (EOT) in B2B Construction: From Contractual Mechanisms to Relational Governance for Dispute Prevention Augustinus Setijanto; Sarwono Harjomuljadi
IJEBD (International Journal of Entrepreneurship and Business Development) Vol 9 No 3 (2026): May 2026
Publisher : LPPM of NAROTAMA UNIVERSITY

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.29138/ijebd.v9i3.3620

Abstract

Extension of Time (EOT) is one of the most important mechanisms in construction contracts because it serves to regulate adjustments to the project schedule when delays occur. However, in Business-to-Business (B2B) construction projects, EOT is often narrowly understood as merely the right to additional time or even directly associated with cost claims. This reductive understanding frequently triggers conflicts, as the parties fail to distinguish between the right to time, the right to compensation, and the quality of the relationship that underpins contract execution. This article aims to build a more comprehensive understanding of EOT by situating it within three main dimensions: the contractual dimension, the economic dimension, and the relational dimension. This study employs a qualitative method with conceptual, normative, and analytical approaches, through an examination of construction contract literature, institutional economics theory, relational contract theory, dispute avoidance, and a critical analysis of high-rise project practices. The findings indicate that EOT is fundamentally a mechanism for allocating time-related risks, not an automatic basis for financial compensation. Compensation arises only when there is a clear basis of liability and a provable causal relationship. Furthermore, construction disputes are more often triggered not by the delay itself, but by communication failures, weak documentation, misclassification of delays, and poor quality of relationships between parties. Therefore, this article argues that EOT needs to be reframed from merely a claim tool into an instrument of relational governance to prevent disputes, build trust, and create shared value in B2B construction projects.
Application of the Principles of Good Faith and Pacta Sunt Servanda in Unequal Construction Contracts: A Case Study of B2B Developer–Contractor Augustinus Setijanto; Corina Permatasari; Nana Artahana; Join Hadamean; Peto Syamsul Alam; Arief Koeswanto; Prastiwo Anggoro; Tri Lisiani Prihatinah
IJEBD (International Journal of Entrepreneurship and Business Development) Vol 9 No 1 (2026): Jan - Feb 2026
Publisher : LPPM of NAROTAMA UNIVERSITY

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.29138/ijebd.v9i1.3494

Abstract

The legal relationship between developers and contractors in business-to-business (B2B) construction contracts in Indonesia often shows a significant imbalance of power. Although formally the contract is made based on the principle of freedom of contract, substantively the legal relationship often deviates from the principles of fairness and balance that form the basis of contract law. This paper examines the application of two fundamental principles in contract law, namely good faith and pacta sunt servanda, which means that every agreement made legally is binding on the parties who made it (Article 1338 paragraph (1) of the Civil Code) in the practice of biased construction contracts, particularly when developers modify FIDIC standard contracts by removing or limiting clauses that are detrimental to their interests, such as the Dispute Avoidance/Adjudication Board (DAAB), the right to an extension of time (EoT), and the right to suspend payment. This study uses a normative-juridical approach with case and comparative analysis methods, examining actual practices between developers and contractors experiencing delays, variation orders, and payment delays. The results of the analysis show that the removal of these protective mechanisms not only creates the potential for structural default but also constitutes a violation of the principle of good faith in the implementation of contracts as stipulated in Article 1338 paragraph (3) of the Civil Code. Meanwhile, the pacta sunt servanda principle cannot be applied absolutely if the substance of the contract contains a striking imbalance and violates propriety (Article 1339 of the Civil Code). This paper offers an update in the form of a reinterpretation of the principle of good faith as a corrective instrument against exploitative clauses, as well as a proposal for the establishment of a national DAAB institution with proportional costs to uphold contractual justice. Thus, the application of contract law in construction contracts must be directed towards substantive balance and a fair relational relationship between developers and contractors, so that national development objectives can be achieved without causing protracted disputes.
THE EFFECTIVENESS OF CONSTRUCTION GOODS AND SERVICES PROCUREMENT LAWS ON PRIVATE CONTRACTORS: A LEGAL SYSTEM PERSPECTIVE LAWRENCE M. FRIEDMAN Augustinus Setijanto; Tedi Sudrajat; Sami'an Sami'an
IJEBD (International Journal of Entrepreneurship and Business Development) Vol 9 No 1 (2026): Jan - Feb 2026
Publisher : LPPM of NAROTAMA UNIVERSITY

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.29138/ijebd.v9i1.3516

Abstract

Public procurement of construction works constitutes a strategic instrument for national development; however, in practice it continues to face complex legal problems. These problems do not merely arise from procedural violations or corrupt intent, but also from unclear administrative authority, regulatory complexity, and weak legal culture in procurement implementation. Such conditions have contributed to increasing procurement disputes and the risk of policy criminalization, particularly affecting private contractors who perform works based on administrative orders issued by authorized officials. This paper aims to analyze legal problems in construction procurement in Indonesia by applying Lawrence M. Friedman’s legal system theory, which emphasizes three interrelated elements: legal structure, legal substance, and legal culture. The research employs a normative legal method with statutory, conceptual, and case-based approaches, analyzed through qualitative-descriptive techniques based on procurement regulations, legal doctrines, and judicial decisions as well as procurement practices. The analysis demonstrates that the ineffectiveness of construction procurement law stems from an imbalance among the three elements of the legal system. Weak coordination within the enforcement structure leads to the criminalization of administrative errors, complex legal substance creates ambiguity and risky discretion, while a permissive legal culture exacerbates deviations in practice. This paper offers a systemic reform perspective by emphasizing clearer differentiation between administrative and criminal liability, stronger legal protection for good-faith private contractors, and the reinforcement of ethical values and legal culture in procurement governance. Through this approach, construction procurement law is expected to function more effectively in achieving legal certainty, justice, and utility for sustainable national development.
Legal Risks of Land Use and Spatial Planning in Development by Private Developers and Contractors in Indonesia: Normative Analysis, Case Studies, and FIDIC Contract-Based Mitigation Strategies Augustinus Setijanto; Rahayu Subekti; Sarwono Hardjomuljadi
IJEBD (International Journal of Entrepreneurship and Business Development) Vol 9 No 1 (2026): Jan - Feb 2026
Publisher : LPPM of NAROTAMA UNIVERSITY

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.29138/ijebd.v9i1.3519

Abstract

This article aims to comprehensively analyze the legal status of land use and spatial planning as a source of legal risk in construction projects, as well as its implications for private developers and contractors. This study uses a normative legal research method with a statutory, conceptual, and case study approach, by examining relevant laws and regulations, legal doctrine, and court decisions, including Supreme Court Decision Number 3053 K/Pdt/2011 and an apartment development dispute at the West Jakarta District Court. The results of the study indicate that land rights are not absolute and are always limited by spatial planning provisions as a public legal instrument. Weak synchronization of the RTRW/RDTR, zoning changes, and low internalization of the social function of land in development practices are dominant factors in the occurrence of disputes and project terminations. This study also found that contractors can no longer be positioned solely as technical implementers, but rather as active subjects of spatial planning compliance who potentially bear legal risks if they continue to carry out work that conflicts with spatial designations.These findings and proposals are expected to strengthen legal certainty, improve projectgovernance, and minimize disputes in private sector development.
ENVIRONMENTAL LAW IN APARTMENT DEVELOPMENT IN LARGE CITIES Augustinus Setijanto
IJEBD (International Journal of Entrepreneurship and Business Development) Vol 9 No 4 (2026): July 2026
Publisher : LPPM of NAROTAMA UNIVERSITY

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.29138/ijebd.v9i4.3678

Abstract

This study aims to analyze the legal responsibilities of developers and contractors in apartment construction under Indonesian environmental law and to examine the roles of Environmental, Social, and Governance (ESG), Environmental Governance, and Relational Governance in the prevention of environmental disputes. This study employs a normative legal methodology using legislative, conceptual, and case study approaches to examine the construction of the Uttara Yogyakarta Apartment and the LA City Jakarta Apartment. The results indicate that environmental disputes are not only caused by physical environmental damage but also by failures in the governance of relationships among stakeholders. Compliance with Law No. 32 of 2009 is a minimum requirement, whereas the success of sustainable development requires community participation, transparency, communication, trust, and good governance. This study proposes a conceptual model, the Relationship-Based Environmental Governance Theory, which links ESG Compliance, Environmental Governance, Stakeholder Trust, Social License to Operate, and Dispute Avoidance as a new paradigm in construction environmental law.
Co-Authors Arief Koeswanto Corina Permatasari Join Hadamean Nana Artahana Peto Syamsul Alam Prastiwo Anggoro Rahayu Subekti Sami'an Sami'an Sarwono Hardjomuljadi Sarwono Harjomuljadi Tedi Sudrajat Tri Lisiani Prihatinah