Turkey: Assumption Of Debt Under The Turkish Code Of Obligations

Introduction

Within the scope of a debt relationship, it is possible for the person who will perform the obligation to change under certain conditions. This is possible pursuant to the provisions on assumption of the obligation regulated under Articles 196-204 of the Turkish Code of Obligations ("TCO").

The law makes a dual distinction in this regard, and the assumption of the obligation can be made in two different ways: internal assumption of the obligation and external assumption of the obligation. Within the scope of this article, the concepts of internal assumption of debt and external assumption of debt and the difference of the concept of assumption of debt from the concept of assignment of claims will be analyzed.

I. Internal Assumption of Debt

In internal assumption of debt, which is one of the types of debt assumption, the debtor and the third party conclude a contract, and with this contract, the third party is under the obligation to release the debtor from the debt. In order for this contract to be concluded, the general validity conditions for contracts must be present. Internal assumption of the debt is regulated under Article 195 of the TCO.

Pursuant to Article 195 of the TCO, in the event of an internal assumption of the obligation, the third party shall be under the obligation to relieve the debtor from its obligation.

Pursuant to the same article, unless the debtor fulfills its obligations arising from the internal assumption agreement; it will not be able to request the other party to fulfill its obligation.

Pursuant to the same article, in the event that the debtor has not been relieved from its obligation, the debtor shall not be obliged to request the other party to fulfill its obligation unless the debtor fulfills its obligations arising from the internal assumption agreement.

II. External Assumption of Debt

In external assumption of debt, which is another type of assumption of debt, the creditor and the third party conclude a contract and with this contract, the third party assumes the debt. In order for this contract to be concluded, the general validity conditions for contracts must be present. External assumption of the debt is regulated under Articles 196 and 197 of the TCO.

Pursuant to Article 196 of the TCO, in the case of external assumption of an obligation, the debtor shall be released from its obligation by an agreement to be concluded between the obligor and the creditor.

Pursuant to the same article, the notification of the internal assumption agreement to the creditor by the assumer, or by the debtor with its consent, shall constitute a proposal for the conclusion of an external assumption agreement. In this case, the creditor's acceptance may be explicit or implicit. The creditor shall be deemed to have accepted the assumption of the obligation if the creditor accepts the performance of the assumption without any reservation or consents to any other action taken by the creditor in its capacity as an obligor.

Pursuant to Article 197 of the TCO, the proposal regarding the assumption of the obligation may be accepted by the creditor at any time. However, if the assumer or the previous debtor sets a certain period of time for acceptance and the creditor remains silent until the expiration of this period, the proposal may be deemed rejected.

Pursuant to the same article, if a new internal assumption agreement is concluded before the acceptance of the proposal by the creditor and a proposal is made to the creditor regarding this second internal assumption, the first proposer will be released from being bound by its proposal.

III. Difference from Assignment of Claims

The assignment of claims is regulated under Articles 183-194 of the TCO. Pursuant to Article 183 of the TCO, the creditor may assign its claim to a third party without seeking the consent of the debtor, unless the nature of the contract or the work prevents it.

In the assumption of the debt, the person who will perform the debt changes, while in the assignment of the claim, the person who will accept the performance changes. Although the two legal institutions are similar due to the fact that the parties to the debt relationship change in both; they are different from each other in terms of their bases and consequences.

Conclusion

Within the scope of a debt relationship, it is possible to change the person who will fulfill the obligation. This may be possible pursuant to the provisions on assumption of the obligation regulated under Articles 196-204 of the TCO. The law provides for two different types of internal assumption of the obligation and external assumption of the obligation. In this article, the concepts of internal assumption of the obligation and external assumption of the obligation and the difference between the concept of assumption of the obligation and the concept of assignment of the claims are analyzed.

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.