Turkey: How The Contract Is Signed During The COVID-19 Pandemic?

Introduction

In Turkish law, when the parties mutually explain their will to enter into a legal relationship, the contract is established and the parties who declare their will are bound by their intention except the contracts which provide the specific requirement as to form. In other words, freedom of form principle¹ is applied in Turkish contracts law. Disclosure of the will may be in words, in writing or in other various forms. On the other hand, legal acts shall be proven by documentation if their value at the time they have been performed 4.480 Turkish Liras.² For these legal transactions, parties shall prefer the written form. In corporate life, the parties generally prefer to conclude a written contract to determine the specific conditions, their rights and obligations in order for ensuring the enforcement of these terms and conditions and using for the resolution of disputes that may arise as proof.

However, due to the COVID-19 pandemic, many businesses and institutions have switched to the remote working model to the extent permitted by the nature of their business. Although, it is possible to provide business continuity with clients or business partner with technological equipment, there may be malfunction in business relations if the transaction or process requires that parties shall convene physically. Especially, during the epidemic, although the parties' will compromise, there may arise a question: How the conditions of contract is proven without wet-ink signature in case of dispute between parties? In this article, it is examined the manners which may be applied in case that parties cannot convene physically particularly in the epidemic period.

I. Secured Electronic Signature

Digitalization gradually leads to legal transactions and therefore, some concepts occur and take more places in practices such as Secured Electronic Signature ("SES"). According to Article 15 of Turkish Code of Obligations no. 6098 ("TCO")³, the person who undertakes an obligation shall sign the document through his own handwriting. In this context, secured electronic signature is equivalent to a handwritten signature. In addition to this, Electronic Signature Law no. 5070⁴ also includes regulation analogous with TCO regarding SES. Accordingly, SES shall be (i)uniquely linked to the signatory, (ii)capable of identifying the signatory (iii)created using means that the signatory can maintain under his sole control and (iv) linked to the data to which it relates in such a manner that any subsequent change of the data is detectable. Finally, Article 18/3 of Turkish Commercial Code no. 6102 ("TCC")⁵ states that the notices between tradesmen regarding default of a party, termination of an agreement or reneging of an agreement, shall be made via the registered electronic mail through notary, registered mails, telegraph or secured electronic signature. Accordingly, as it can be understood from the legislation afore-mentioned, SES shall be considered that it is equivalent to the wet-ink signature. Therefore, when a transaction regarding the contract has been made with parties' secured electronic signature during the COVID-19 pandemic, it shall be accepted as proof in case of dispute between the parties.

II. Registered Electronic Mail System

Initially, Article 1525 of TCC has been introduced Registered Electronic Mail System ("REM"). In order to provide applicability of this provision Regulation on Procedures and Principles Regarding the Registered Electronic Mail System⁶ ("Regulation") has been promulgated and provide more detail provisions. Article 1525 of TCC regulate that transmission of notification, protests, objections, other similar declarations, invoices, confirmation letter and assembly invitations are allowed to be made in a safe way through REM system without endangering the rights of the senders and recipients provided that the parties have compromised on the mentioned transaction earlier. It can be determined that (i)when and by whom the e-mail is sent (ii)content of the e-mail (iii) whether the e-mail is changed by someone else (iv) the time of sending e-mail precisely in REM system since a REM includes SES and time tramp. In addition to the foregoing, according to Article 15/1 of the Regulation, briefly, REM system can be defined as a qualified form of electronic mail that is accepted legal evidence in case of dispute between the parties. Therefore, if the both parties are merchant and have REM address, they may conclude their contract and send notifications through REM in electronic environment. It can be determined through the system whether the notifications reach the other party and whether the content to the notification has changed.

III. Confirmation Letter

According to Article 21/3 of TCC, the party may send the confirmation letter to another party to verify the conditions of the contract which is established previously through telephone, telegraph, or any means of communication and the confirmation letters shall be deemed to be accepted if no written objection is raised within 8 (eight) days from the recipient party. Therefore, the confirmation letter regarding the contract may be a proof which has been conclude between the parties through telephone, telegraph, oral or another communication tool, whether the one party does not raise an objection within 8 (eight) days during the pandemic period. Furthermore, it will be useful to send the confirmation letter to another party through a notary public, registered and reply-paid letter or REM in order to strengthen the evidence quality of the confirmation letter.

Conclusion

Especially, in COVID-19 pandemic, although the parties compromise for establishing, amending or renewing the contract, they cannot convene physically due to the measures for pandemic and they cannot run the signing process. In the digital world, legislation gradually is more comply with the electronic environment and digitalization. In this Article, it is evaluated the facilities provided in Turkish legislation regarding the contracts that are not subject to any form requirement (freedom of form principle) during the pandemic. However, a concrete situation assessment shall be made for each contract type and its content.

Footnotes

1. Oğuzman/Öz, Borçlar Hukuku Genel Hükümler, p.141.

2. Turkish Code of Civil Procedure numbered 6100 dated January 12, 2011; published in Official Gazette numbered 27836 dated February 4, 2011.

3. Article 15 of Turkish Code of Obligations numbered 6098 dated January 11, 2011; published in Official Gazette numbered 27836 dated February 4, 2011.

4. Electronic Signature Law numbered 5070 dated January 15, 2004; published in Official Gazette numbered 25355 dated January 23, 2004.

5. Turkish Commercial Code numbered 6102 dated January 13, 2011; published in Official Gazette numbered 27846 dated February 14, 2011.

6. Regulation on Procedures and Principles Regarding the Registered Electronic Mail System published in Official Gazette numbered 28036 dated August 25, 2011.

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.