<![CDATA[The relationship between a lender and a borrower is one of the most common forms of legal engagement in social interaction, requiring each party to exercise their rights and fulfill their obligations with honesty and full responsibility. Issues arise when a borrower fails to meet their obligations as originally agreed a situation constituting a breach of contract that harms the lender and necessitates clarity regarding the consequences to be borne by the defaulting party. This study examines the provisions governing debt-related obligations and the legal consequences that ensue when a borrower fails to honor their commitments. A normative legal research methodology is employed, utilizing a literature review of relevant legislation and legal sources, primarily the Indonesian Civil Code (Kitab Undang-Undang Hukum Perdata or KUHPerdata). The findings indicate that the Civil Code’s provisions on debt and lending encompass the requirements for the validity of an obligation, fundamental principles of contract law, the rights and responsibilities of each party, and specific regulations concerning loan transactions. Furthermore, a borrower’s breach of contract gives rise to several legal consequences, including the continued obligation to repay the debt, the liability to provide compensation for damages pursuant to Article 1243 of the Civil Code and the option for the lender to either demand the fulfillment of the obligation or seek the cancellation of the agreement as a means of protecting their rights.]]>
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