Turkey: General Terms Within The Scope Of Turkish Code Of Obligations

Last Updated: 3 August 2018
Article by Elif Dirican

The positive arrangements relating to the general terms are regulated under the Turkish Code of Obligations No. 6098, Articles 20 - 25.

In the first paragraph of article 20 of the Code of Obligations general terms is defined as "the contract terms which are previously and unilaterally prepared by one party with a purpose of using them for several numbers of similar contracts and submitted to the other party during the signing of a contract".

This regulation, first of all helps to make the control of general terms and conditions used in any kind of contracts possible and more effective. Particularly, public notaries, insurance companies, travel agencies and transport companies, banks, companies providing public services and construction companies use contracts that contain general terms and conditions (standard clauses) frequently. The control of the general terms is made through arrangements based on a dualist structure by which control is performed prior to the signing of a contract (control under two subtitles, namely control with respect to the rules relating to unfair competition and rules relating to competition law) and control of the content and form of the contract based on specific principles and rules of contract law. This control, which also applies to contracts in which the parties to the contract do not qualify as consumers, is aimed at allowing everyone to obtain the full benefit of the protective provisions without making any discrimination between consumers and merchants, as has been done in countries such as Germany, Austria, Italy and Holland.

In the Turkish Code of Obligations, whereas on the one hand, the explanations regarding the definition of the general terms and their field of application are included in article 20, on the other hand supervision and control of the enforcement of the provisions of the law and regulations thereunder is regulated under articles 21 and 22 of the law. Interpretation assessment which means supervision and control of a condition that is determined to be included in the content of a contract by way of interpretation is regulated under article 23 of the law, and the control of its validity which becomes effective in cases where it is determined that this condition does not provide a sufficient protection for the other party within the meaning of the law is regulated under articles 24 and 25 of the law.

The provisions regarding the general terms and those that are stated under the Code of Obligations have a mandatory character and parties to contracts are not allowed to accept any condition contrary to these provisions.

The provisions regarding the general terms and those that are stated under the Code of Obligations have a mandatory character and parties to contracts are not allowed to accept any condition contrary to these provisions. It has been expressly stated that the arrangements regarding the general terms which are provided for under the Law have a mandatory character (articles 20 thru 25 of the Turkish Code of Obligations). According to this: "In essence, it is considered imperative to arrange these provisions in the form of mandatory provisions covering all contracts in order to provide clarification to the issues such as validity rules to which the general transaction terms are subject, sanctions to be imposed in cases of non-compliance with any of the rules of validity and interpretation of general transaction terms". In that case, contract provisions stating that the contract does not include general terms or that the contract is not a standard form contract or that the parties to the contract have negotiated and agreed upon the terms and conditions, and etc. shall be considered null and void and of no effect in cases where the provisions of the contract contain elements and/or factors of general terms and conditions which are contrary to the mandatory provisions.

According to the law (article 20/III of the Turkish Code of Obligations):

"Records indicating that any and all conditions incorporated into a contract containing general terms or into an independent contract have been negotiated and agreed upon by the parties to the contract cannot alone exclude them from being qualified as transaction terms." In such a case, the party which claims that these conditions have been incorporated into the contract after being discussed, negotiated and agreed upon by the parties to the contract (in this case the party which has previously and unilaterally drafted or prepared the contract) shall have the burden to prove its claims.

According to article 20 of the Code of Obligations the mandatory elements to be taken into consideration in determining whether or not a contract contains general terms are as follows:

  • These terms should have prepared by one of the parties to the contract with the purpose of using them for several numbers of similar contracts;
  • They should have been prepared unilaterally by one of the parties to the contract;
  • These terms should not be convenient for negotiation and should have been submitted to the other party(ies) without holding any discussion on the issue between the parties to the contract.

In Turkish Law, as a rule, general terms (clauses), in other words standard business terms are valid. However there are three types of controls with respect to general terms:

  • Control of validity (enforcement) (art.21)
  • Control of interpretation ( art.23)
  • Control of content (art.25)

Pursuant to the provisions of articles 21 thru 24 of the Turkish Code of Obligations ("TCO") the terms and provisions which are qualified as general terms and conditions shall be deemed not to have been written (not to have been incorporated into the relevant contract) in case of any of the following situations/circumstances.

  1. If any clause or provision of the general terms is contrary to interests of the other party, the party who has unilaterally drafted the relevant contract is required to give clear information to the other party regarding the existence of any such clause or provision and to provide the other party with opportunity to allow him to read, learn and understand the content of any such clause or provision prior to or during the signing of the contract. The validity of any such clause or provision shall depend on the acceptance of the other party, or otherwise any such clause or provision shall be deemed not to have been written (not to have been incorporated into the relevant contract). (Art. 21, TCO)
  2. (BK. m. 21/2) Any general term in a contract which is not relevant to the nature and characteristics of the work contemplated under the relevant contract shall be deemed not to have been written and shall be considered as invalid even if the other party has been informed of any such terms and has accepted any such term. (Art. 21/2, TCO).
  3. Clauses and provisions which grant authorization to the author (the party who has drafted the relevant contract) to unilaterally make amendments to the provisions of a contract containing general terms or to make new arrangement in such type of a contract shall be deemed not to have been written. (Art. 24, TCO)

If some clauses and provisions of general terms contained in a contract are deemed not to have been written (or not have been incorporated into the relevant contract) the validity of the remaining provisions shall not affected and shall continue in full and affect. Pursuant to the provisions of article 22 of the Code of Obligations, author (the party who has drafted the relevant contract) cannot plead as a defense that he would not have entered into the contract without the presence of such clauses and provisions which are deemed not to have been written (or not have been incorporated into the relevant contract), in other words he cannot maintain that he is not bound by the contract, and that the contract is invalid in its entirety.

As a consequence, general terms, or in other words unfair terms and conditions of a contract are the general terms and conditions of a contract which have been previously and unilaterally drafted by one party without any discussion and/or negotiation on the terms of the contract with the other party/parties with the purpose of using them for several numbers of similar contracts and submitted to the other party during the signing of the contract for the purposes of incorporating them into the contract. In case of that a term in any contract is deemed as an unfair term after the control of validity, interpretation and content, it will be invalid from the beginning.

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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