This study aims to analyze the legality of buy back guarantee which is increasingly being used in banking and financing institutions. The research results are very important to determine the position of the buy back guarantee agreement in the debtor and creditor credit agreement so that the legal relationship between debtors, creditors and third parties can be found. This type of research is literature research, legal materials are analyzed qualitatively with a normative juridical approach.
The research concludes that the fulfillment of the insurance elements in Article 1820 of the Civil Code is a legal basis to justify the buy back guarantee as a guarantee agreement. However, buy back guarantee does not provide legal certainty for creditors because it does not have executorial power like material guarantees. Therefore, based on the research results, it is recommended for legislators to immediately formulate laws and regulations governing buy back guarantee as a strong legal basis for banks and financing institutions in the practice of guarantees.