Turkey: Spousal Consent Under The Surety Agreement Pursuant To Article 77 Of The Law No. 6455 And The Provision Added To Article 584 Of The TCO

Introduction

Following the entry into force of the Turkish Code of Obligations No. 6098 ("TCO"), many types of agreements have been subject to different provisions as compared with the former Code of Obligations No. 818. One of these agreements is the surety agreement. Indeed, the amendments made to the Swiss Law of Obligations in 1941 in order to protect the surety, especially those related to the validity of the surety agreement, are adopted in the Code of Obligations No. 6098. One of these amendments is related to the capacity of a married person to be a surety in accordance with Art. 584 of the TCO. Pursuant to this article, if the surety is married, the validity of the surety agreement is subject to the written consent of the other spouse unless there is a separation decision rendered by the court or the right to live separately for the spouses has arisen. This provision has been criticized on the grounds that it is a hindrance to business life, and is amended with Article 77 of the Law No. 6455 on the Amendment to Customs Law and Certain Laws and Decree Laws, which entered into force through publication in the Official Gazette dated 11.04.2013 and numbered 28615.

Consent of the Spouse under Swiss Law

Unlike the Turkish Code of Obligations whose provisions regarding suretyship have not been amended as of 1926, the Swiss Federal Code of Obligations which dates back to 1881, underwent extensive changes in 1911 and the section regarding the surety agreement took its latest form with amendments made in 1941. One of the reforms adopted with the Federal Act dated December 10, 1941, which entered into force on July 1, 1942, was the provision regarding the consent of the spouse under the surety agreement (Swiss CO Art. 494). One of the reasons for enacting said provision was to protect the family. Paragraph 2 of that article set forth that if the surety is the owner of an enterprise registered to the trade registry, shareholder of an unlimited liability company, unlimited partner of a limited partnership, manager or director of a joint stock company, manager of a limited partnership divided into shares or the shareholder who is a director of a limited liability partnership, the person has sufficient business experience and spousal consent is not required; in other words, protecting the family through the requirement of spousal consent was not necessary. However, the Parliament abrogated this paragraph on June 17, 2005 and it remained in force until December 1st of the same year. According to the legal affairs commission of the national council, it was not appropriate to compare today's economic conditions with the year 19411: "Nowadays, the mere fact of being registered with the trade registry, is not sufficient to evaluate the results of the suretyship. If the economic conditions of a company are not duly assessed, the surety agreement may result in unfavorable consequences that were not paid attention to beforehand with regards to the surety and his family. Therefore, the consent of the spouse shall be required in all cases for married persons which are not in the process of separation and who desire to be a surety." Consequently, as Swiss CO Art. 494, paragraph 2 has been abrogated since December 1, 2005, the spousal consent has become obligatory for the sureties by the persons stated in the abrogated paragraph as well.

Consent of the Spouse under Turkish Law

The aforementioned amendments made to the Swiss Code of Obligations (which were made after 22.4.1926, the date of promulgation of the Code of Obligations numbered 818), were not adopted under the Turkish legal system until the entry into force of the Code of Obligations No. 6098.

The draft text of the Code of Obligations No. 6098 set forth the following provision, which was in line with the aforementioned abrogated provision of the Swiss Code of Obligations:

"If a surety is granted with respect to an enterprise, by the owner of the enterprise registered with the trade registry, shareholder of an unlimited liability company, unlimited partner of a limited partnership, manager or director of a joint stock company, manager of a limited partnership divided into shares or the shareholder who is a director of a limited liability partnership, the consent of the spouse shall not be required."

With the amendments to the Swiss Code of Obligations in 2005 stated above, which coincided with the period where said provision was included in the Draft TCO, this provision corresponding to paragraph 2 of Article 585 of the TCO has been excluded from the draft text. Accordingly, the exceptional provision regarding the instances where the consent of the spouse is not required with respect to the validity of the surety contract was deleted from the first version of the Code of Obligations No. 6098.

The provision of the TCO requiring spousal consent has been criticized for a long time since it does not stipulate any exceptions and thus adversely affects business life.

On the grounds to make "amendments for the easement of the natural flow of business life" the relevant article of the TCO has been amended with Article 77 of the Law No. 6455 on the Amendments to Customs Law and to Certain Laws and Decree Laws, dated 28.3.2013. The article, which entered into force on 11.04.2013 in accordance with Art. 90 of the Law No. 6455, is as follows:

"The consent of the spouse shall not be required for the sureties granted in relation to an enterprise or a company by the owners of the enterprises registered with the trade registry or by the shareholder or director of the company; the sureties granted by the craftsmen and artisans registered to the craftsmen and artisans registry in relation to their occupational activities, the sureties to be granted for the credits used within the scope of Law numbered 5570 and dated 27.12.2006 on the Provision of Credit Facilities Supported by Interest Carried out by Banks with Public Capital; and the sureties granted for agricultural credit, agricultural sale and craftsman and artisan credit and surety cooperatives and to the shareholders of the cooperatives by public institutions and organizations."

As seen, similar to the draft version of the TCO, the new provision does not require spousal consent for sureties to be granted with respect to the enterprise by the owner of an enterprise registered to the Trade Registry. Additionally, a similar provision has been established with respect to other partnerships. However, unlike the provision in the draft TCO, the types of partnerships have not been specified one by one, and a general expression was used in the amended TCO provision which exempts "the sureties to be granted with respect to a company by the shareholder or the director of the company" from spousal consent.

In addition, it has been accepted that under certain circumstances, which have not been stipulated either under the Draft or under the provision of the reference Code amended on 1941 and abrogated afterwards, a surety agreement may be established without the consent of the spouse.

In addition to the shareholder or director of a company, the sureties granted by the craftsmen and artisans registered to the craftsmen and artisans registry concerning their occupational activities are exempted from the consent of the spouse.

Similarly, in the sureties to be granted for the credits to be used within the scope of the Law No. 5570 and dated 27.12.2006 on the Provision of Credit Facilities Supported by Interest Carried out by Banks with Public Capital, the consent of the spouse shall not be required.

Finally, it has been accepted with a more general listing method, that the consent of the spouse shall not be required in the sureties granted in the credits which will be made available to agricultural credit, agricultural sale and craftsman and artisan credit and surety cooperatives and to the shareholders of the cooperatives by public institutions and organizations.

Conclusion

The provision which the TCO introduces in relation to "spousal consent" was subject to severe criticism from the date of entry into force of the Code on the grounds that it is a hindrance to business life. An additional paragraph was introduced as a result of such criticism and in the above described circumstances, the surety agreements entered into by married persons do not require spousal consent in order to be valid.

Footnote

1. Feuilles Fédérales 2004 4659.

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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