Recent social and economic developments have brought with them the need to provide services to the masses. In order to meet this demand, banks and other service providers, such as insurance and travel companies, have started using standard contracts, imposing abstract and one-sided terms on the other party. Today, these terms are generally referred to as standardized terms of contract (genel işlem şartları). This new form of contract has changed our traditional understanding of agreements that has always been seen as a combination of offer, negotiations and acceptance. As this new form of contract has left no door open for negotiations, it has become necessary to provide legal protection for individuals who have often been obliged to say either "yes" or "no" to the entirety of a standard contract.
The Law on Consumer Protection
Under Turkish law, the first concrete protection against standardized contractual terms was introduced in 2003 for consumers under the Law on Consumer Protection (the "Consumer Law"), and then under the Regulation on Unfair Terms in Consumer Contracts. These two regulations introduced a definition of unfair terms in contracts, basically regulating them as any unilateral condition included in the contract by the seller, supplier or creditor that is contrary to the principle of good faith.
As per the above-mentioned regulations, several criteria are taken into consideration in determining whether a contract includes unfair terms. In this respect, the nature of the goods or services being provided under the contract, the conditions giving rise to the contract's conclusion, and/or the conditions of other relevant contracts are taken into account in such analysis. However, the difference between the true prices of the goods or services, and the amounts determined under the contract, does not affect the analysis.
Under consumer legislation, if a consumer is unable to affect the context of a term because the said term was prepared in advance and, thereby, already included in the standard contract, such terms are automatically considered not to have been negotiated with the consumer. The sellers or suppliers who allege that a standard term has been negotiated are obliged to prove their claim. Unfair terms in a contract are not binding on the consumer.
Protection under the new Turkish Code of Obligations
In the absence of any regulation under the current Turkish Code of Obligations, the new Turkish Code of Obligations ("Law No. 6098"), effective as of 1 July 2012, introduces a fundamental innovation to Turkish law by regulating, in detail, standardized terms of contracts and the applicable regime thereof. The new Law provides broader protection for the weaker party to a contract, when compared to that which is provided under consumer legislation. Inspired by the laws of many European countries, Law No. 6098 provides control over standardized terms, irrespective of the titles of the contracting parties. The major provisions of Law No. 6098 are summarized as follows:
Definition and Scope of Application
Law No. 6098 defines standardized terms as "contractual terms prepared beforehand by the drafting party unilaterally, and proposed to the counter party during the conclusion of a contract, with the intention to use such terms in similar contracts in the future."
In assessing whether a contractual term qualifies as a standardized term, its content, written style and form are not material considerations, and neither is the fact that it is included in the text of the contract or its annexes. In addition, the fact that the context of contracts prepared for the same purpose are not identical, or if the existence of any notation stating that a standardized term has been accepted through negotiation, does not prevent any contractual term from being classified as a standardized term. The provisions on standardized terms of contracts also apply to contracts executed by individuals or entities who are granted permission, either by law or official authorities.
As per Article 21 of Law No. 6098, standardized terms that contravene the other party's interests are deemed not to have been written if the drafting party has not explicitly informed the other party of the existence of such terms, nor has provided the opportunity to the other party to be made aware of the terms, and if the other party has not accepted such terms. The contractual terms that are basically irrelevant to the nature of the contract and characteristics of the work are also deemed not to have been written. In this instance, the contract's remaining terms continue to be valid.
The terms that provide the drafting party the right to unilaterally modify the terms of a standard contract, or to introduce new terms, are deemed not to have been written. The terms that contravene the bona fide principle or aggravate the condition of the counterparty are also invalid. Finally, if a clause that is included in the standardized contract term is unclear or ambiguous, or could have more than one meaning, it is interpreted to be against the drafting party and in favor of the other party.
With the introduction of the above-mentioned provisions, it appears that the Turkish legal profession will undergo an important change. While the effectiveness of these new provisions, in practice, has yet to be tested, one may predict that the parties to many of the standard contracts currently in use, and which we unwillingly consent to today, will have to be revised in order to comply with the law.
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