In review: contract formation in Turkey

Bizar Male

All questions

Contract formation

i Freedom of contract

‘Freedom of contract’ is a fundamental principle of the Turkish contract law and guaranteed by the Constitution. According to this principle, parties can dictate the content of the contract as they wish unless an exception exists.

Freedom of contract also includes the freedom for deciding the type of contract. The sales contract, tenancy agreement, donation agreement, contract of work, general service agreement, loan agreement, publishing contracts, and power of attorney agreement listed as a type of contracts in the CO. Nonetheless, parties are not obliged with the types of contracts listed in the CO: they could make a contract in different forms at their will due to the existence of freedom of contract.

ii Necessary elements for the establishment of the contract

Parties shall agree on essential components of the contract per Turkish Law. Essential components of a contract are divided into two subcategories as ‘objective essential components’ and ‘subjective essential components’. Objective essential components are components defined in the legal definition of the contract and constitute the minimum conditions for the contract (e.g., price in the sales contract). Subjective essential components are components that became an essential component through the common will of the parties, or one party’s will and other’s approval (place and date of performance).

Statements required for the establishment of the contract are offer and acceptance. The offer is an appeal for making a contract including all essential components of the contract and directed towards the other party or everyone. The person proposing may restrict the bindingness of the offer for time. If an offer is made without limitation of time; there will be two possibilities. If there is a face to face situation between parties, the offer will not be binding unless the counterparty accepts it immediately. If a face to face situation does not exist between parties, the offer will bind the proposer for a reasonable time. The contract will be established with the acceptance of the offered. Silence is not regarded as a declaration of will as a rule; hence, the person remaining silent against the offer is not considered as accepting it.

If the offer for making a contract does not include the essential components or will of binding, it will be called as ‘invitation for offer’. In an invitation to an offer, one party calling the other party for making negotiations and contracts.

In Turkish law, the validity of contracts is not subject to any form unless the opposite is indicated by the law. Nonetheless, lawmakers required a form for making a contract as an exception. Assignment of claim, surety, and real estate sales contract can be provided as instances for this exception. If a contract is not made according to form ordained by law, it will be invalid.

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