The New Code of Obligations ("the New Code") became
effective in Turkey as of 1 July 2012.
The New Code includes a section regarding "general contract
terms" and introduces a new legal concept for individual
contracts which is open to debate. The section begins by defining
"general contract terms" and then sets out the
consequences if such terms are against the interests of the
The New Code has been in force for a very short period of time
and these provisions have not yet drawn due attention. The drafters
of such conditions should be mindful of being in an undesirable
position in the future due to the strict wording of the New Code as
well as certain vague provisions therein.
Definition of "General Contract Terms"
According to Article 20 of the New Code, general contract terms
are the provisions of a contract drafted and submitted by one of
the parties unilaterally in order to be used in a variety of
similar contracts in the future. The drafting party should
expressly inform the other party of the existence of such terms and
provide an opportunity to become aware of the content, failing
which the general contract terms shall be deemed
"unwritten" and have no legal effect (Article 21).
General contract terms which are unusual for a contract type or
transaction shall also be deemed unwritten.
Scope of Application
These provisions concern goods and services suppliers,
particularly those serving a large number of customers, such as
banks, insurance companies and transport companies since they are
used to setting out their own rules of negotiation – namely,
not to negotiate(the "take it or leave it" rule) –
which is not permitted by the New Code.
Before the promulgation of the New Code, the concept of
"unfair contract terms" applied only to consumer
contracts pursuant to the Law on Consumer Protection. According to
Article 6 of this Code, consumers are not bound by unfair terms,
which are defined as being the conditions inserted by the supplier
unilaterally, without negotiation, and which cause imbalance
against good faith in the rights and liabilities of the parties
contrary to the interests of the consumer. Under this Code, it was
easy to interpret the law.
The New Code leaves no room for the drafter of such general
terms to avoid the application of related provisions. One article
states that it makes no difference whether the contracts prepared
for the same purpose are identical or not.
It is clearly specified in the New Code that to add a specific
article stating that the agreement has been negotiated before the
conclusion thereof does not take the agreement or related
article(s) out of the general contract term definition.
In addition to all of the above, there is one vital provision
stipulating that any article which is contrary to the interest of
the other party or which worsens his/her position against good
faith cannot be inserted in general contract terms. This provision
may create a ground for a party to allege the invalidity of any
provision with which he/she is not happy even if he/she signed
general conditions at the outset of the relationship.
Considering all of the above, it is quite difficult to prove
that an agreement or a general contract term was negotiated between
the parties. Having regard to the "prudent merchant
principle", the courts would be cautious in the interpretation
of the above-stated provisions of the New Code in commercial
disputes (where both parties are traders or companies) since it may
cause unexpected and unintended consequences.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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