BUSINESS LIABILITY FOR OFF-PROCEDURE CONSUMER TRANSACTIONS: AN ANALYSIS OF ULTRA VIRES AND VICARIOUS LIABILITY

Abstract

The phenomenon of off-procedure transactions between consumers and business actors is increasingly prevalent in business practices. The legal issue arising from this practice is the uncertainty in consumer protection, as business actors frequently evade liability by invoking the doctrine of ultra vires. This research aims to analyze the legal certainty of consumer protection in off-procedure transactions using an analytical approach based on the principles of ultra vires and vicarious liability. This study employs a normative legal research method, utilizing secondary data obtained through literature review. The findings indicate that the Consumer Protection Law, as lex specialis, provides a strong legal foundation to guarantee the protection of consumer rights, including in transactions conducted outside official procedures, provided that consumers act in good faith and the transactions are related to goods or services traded by business actors. Article 19 of the Consumer Protection Law applies the principle of strict liability, requiring business actors to compensate consumers for losses incurred, while Article 1367 of the Indonesian Civil Code reinforces corporate liability for employees’ actions conducted within the scope of employment under the vicarious liability doctrine. Although business actors may assert the ultra vires doctrine, this principle cannot be used as an absolute defense to evade liability when transactions are connected to the business activities of the company. Therefore, consumer protection must remain a priority to ensure legal certainty and fairness in transactions within Indonesia’s business landscape.