The cancellation of a House Order Letter inevitably carries certain legal consequences. A unilateral cancellation of the house order agreement by the buyer is essentially not considered a breach of contract by either party, since the house order letter is not a binding agreement. The house order letter is typically made before the execution of a Sale and Purchase Binding Agreement (PPJB) before a Notary. The characteristic of a house order letter is that it is a written document used in property transactions, especially for houses, between the buyer and the developer or seller.

Its main function is to demonstrate the buyer's seriousness in purchasing the offered house. However, it is important to understand that the house order letter is not an official sale and purchase agreement. Although it does not yet have the binding legal force like the PPJB or the Deed of Sale and Purchase (AJB) authorized by a notary, the house order letter still carries legal value as an initial document that indicates the intent and preliminary agreement between the buyer and the seller. In essence, the house order letter is not equivalent to a binding Sale and Purchase Binding Agreement (PPJB) for land, and thus cannot be categorized as a conditional engagement.

This can be seen based on the provisions of Article 1253 of the Indonesian Civil Code (KUHPerdata), where the legal effect of a unilateral cancellation of the House Order Letter by the buyer includes the termination of an agreement. When necessary, the parties may release themselves from obligations as stipulated in Articles 1266 and 1267 of the Civil Code. Furthermore, the seller is obliged to return the amount of money already paid by the buyer, after deducting a certain percentage in accordance with Aristotle’s theory of distributive justice. The parties may also be subject to penalties, the amount of which is adjusted based on mutual agreement and must be paid either by the buyer to the developer or vice versa, for each day of delay, and is to be paid in full.