CONTRACTS IN THE TURKISH LAW
٭Dr. Mustafa CAN
What is the business law? I think that we should start this question. And we should
continue the answer of that question. Business law is that branch of law which deals with all
legal problems of business activities. Transactions or acts might cause such problems. There
might be contractual relations, like sales or agency, transportation, insurance, banking and
many others, where primarily goods are involved or service are performed.
In other words, contracts are the sources of obligations. The legal infrastructure of
commerce is contract. Practically every business transaction affecting anyone involves a
contract. Furthermore, such legal transactions are recognised by the state and supported with
state sanctions .This research will familiarize you with the terminology needed to work with
contract law in the Turkish System.
1. Definition of a Contract
A contract is a legal transaction which may be defined as an exchange of assents by two or
more persons, resulting in an obligation to do or to refrain from doing a particular thing which
is enforceable by law. A contract may also be described “as an agreement creating legally
enforceable obligations” . The other words a contract is a legally binding agreement.
The substance of the definition of a contract is that by mutual agreement or assent the
parties create enforceable duties or obligations. That is, each party is legally bound to do or to
refrain from doing certain acts.
2. Classification of Contract
Contracts may be classified in terms of enforceability or validity, as valid, void or
A. Valid Contracts
A valid contracts is an agreement that is binding and enforceable. For example, (A)
promises to sell his computer for $ 100 and (B) consents to buy it. (A) is under an obligation
to transfer the ownership of the computer and (B) must pay $ 100. This contract is a valid
contract. Such contracts are fully binding and enforceable.
* The Turkish Justice Academy, Ankara/TURKEY
. According to Art 48/II of The Turkish Constitution art “which states that each individual has the right to enter
into contractual relations of his own choice”. The Turkish Constitution sets forth not only the structure and
powers of government but also the limitations on those powers. Turkey has a prominent place among today’s
developing countries by the length of its experience. The Turkish Constitution establishes a tripartite
government: a legislative branch to make the laws, an executive branch to execute the laws, and ajudicial branch
to interpret the laws. According to the Turkish Constitution, the basic characteristics of the Turkish Republic
have been described as “a democratic, secular, and social state governed by the rule of law, in accordance with
the concepts of social peace, national solidarity, and justice; respectful of human rights...”.
. The Turkish Code of Obligation(TCO) art.1; The foundation of the Turkish law of a current legal system may
be found in Roman law or practices or moral laws applied in bygone ages. Until the 12th century, law in the
western world operated on several primary levels. Collections of written laws such as the Augustinian Code or
the Code of Charlemagne(both traceable to Roman law) created a broad written legal framework. This basic
system still prevails in many European countries and is known as the “civil” law. Towards the end of the 1900’s,
many European countries codified much of their law both public and private. On the other hand, in the Anglo
Saxon countries the notion of uncodified law prevailed, and many rules are derived from customary laws and
judicial precedents. Turkey has followed many European countries and codification of many European laws.
Legislative branch has become the most important foundation of the Turkish law(CAN, M., The Foundation of
Turkish Law, ejournal(www.hukukcu.com), p.1).
B. Voidable Contracts
A voidable contract is an agreement that is otherwise binding and enforceable, but because
of the circumstances surrounding its execution or the lack of capacity of one of the parties, it
may be rejected at the option of one or both of the parties. They are valid until declared void.
Contracts made by mistake are generally considered voidable . For example, a person who
has been forced to sign an agreement that person would not have voluntarily signed may, in
some instances, avoid the contract.
The validity of a voidable contract may only be challenged by an interested party; in the
case of mistake, for example only by the party who is misled by mistake. The period during
which a voidable contract may be voided is usually fixed by law .
C. Void Contracts
Void contracts are those which have no legal effect either because they are against law or
morals, because of incapacity lack of formality or impossibility . A void contract is without
legal effect. A contract that contemplates the performance of an act prohibited by law is
usually incapable of enforcement; hence it is void. Likewise, it cannot be made binding by
later approval or ratification.
3. The Agreement
A. In General
A contract consists of enforceable obligations that have been voluntarily assumed. Thus,
one of the essential elements of a contract is an agreement. There is an agreement when the
parties lead each other reasonably to believe that they are of the same mind about a given
transaction. This point is reached by an offer on the one side, and an apparent acceptance of
the offer on the part of the other.
B. Requirements of an Offer
An offer expresses the willingness of the offeror to enter into a contractual agreement
regarding a particular subject. It is a promise that is conditional upon an act or return promise.
a. Contractual Intention
To make an offer, the offeror must appear to intend to create a binding obligation .
Whether this intent exists is determined by objective standards. Thus intend may be shown by
conduct. For example, when one party signs a written contract and sends it to the other party,
such action is an offer to enter in to a contract on the terms of the writing.
The first statement made by one of two persons is not necessarily an offer. In many
instances, there may be a preliminary discussion or an invitation by one party to the other to
negotiate or to make an offer. Ordinarily, a seller sending out circulars or catalogs listing
prices is not regardingness to consider an offer made by a buyer on those terms.
In some instances, it is apperant that an invitation to negotiate rather than an offer has
been made, when construction work is done for the government, statutes require that a printed
statement of the work to be done be published and circulated. Contractors are invited to
submit bids on the work, and the statute generally requires that the bid of the lowest
responsible bidder be accepted. Such an invitation for bids is clearly invitation to negotiate.
. TCO art. 26. ; These mistakes may be diffent(ANSAY, T., Introduction to Turkish Business Law, Ankara
. TCO arts. 21,31.
. SOZER, B., Legal Environment of Business, Istanbul 2001, p.121.
. Art. 7 of TOC provides some basic guidelines to help appraise the situation when one is in doubt as to
whether a statement should be taken as an offer or an invitation to treat. According to the provisions of the said
art. the following cases, as a principle, should be rather assumed as an invitation to treat; (i) where the party who
made the declaration has specifically stated that it is not an offer, (ii) It is evident from the circumstances that the
declaration made by the party should not be taken as an offer, (iii) Sending brochures or price lists, making
advertisements do not constitute an offer; but on the other hand (iv) Displaying goods with their prices attached
on them is prima facia (as a rule) an offer.
The bid of each contractor is an offer, and there is no contract until the government accepts
one of these bids.
An offer, and the resulting contract, must be definite and certain. If an offer is indefinite or
vague or if an essential provision is lacking, no contract arises from an attempt to accept it.
Thus, an offer to conduct a business for as long as it is profitable is too vague to be a valid
offer. The acceptance of such an offer does not result in a contract that can be enforced .
c. Communication of Offer to Offeree
An offer must be communicated to the offeree. Otherwise the offeree cannot accept even
though knowledge of the offer has been indirectly acquired. Not only must the offer be
communicated, but also it must be communicated by the offeror or the offeror’s direction.
C. Termination of Offer
An offeree cannot accept a terminated offer. Offers may be terminated by revocation,
counteroffer, rejection, lapse of time, death or disability of a party, or subsequent illegality.
a. Revocation of Offer by Offeror
Ordinarily, an offeror can revoke the offer before it is accepted. If it is done, the offeree
cannot create a contract by accepting the revoked offer . Thus, the bidder at an auction sale
may withdraw a bid before it is accepted, and the auctioneer cannot accept that bid later.
An ordinary offer may be revoked at any time before it is accepted even though the offeror
has expressly promised to the offeree that the offer would not be revoked before a specified
No particular form or words are required to constitute a revocation. Anywords indicating
the offeror’s termination of the offer are sufficient. A revocation of an offer is ordinarily
effective only when it is made known to the offeree. Until it is communicated to the offeree,
directly or indirectly, the offeree has reason to believe that there is still an offer that may be
accepted, and the offeree may rely on this belief.
It is ordinarily held that there is a sufficient communication of the revocation when the
offeree learns indirectly of the offeror’s revocation. If the offeree accepts an offer before it is
effectively revoked, a valid contract is created. Thus, there may be a contract when the offeree
mails or telegraphs an acceptance without knowing that a letter of revocation has already been
b. Counteroffer by Offer ee
The offeree rejects the offer when he ignores the original offer and replies with a different
offer. If the offeree purpoits to accept an offer but in so doing makes any change to the terms
of the offer, such action is a counteroffer that rejects the original offer. An acceptance that
changes the terms of the offer or adds new terms is a rejection of the original offer and
constitutes a counteroffer.
Ordinarily, if (A) makes an offer, such as to sell a used computer to (B) for $ 100 and (B)
in reply makes an offer to buy at $ 75, the original offer is terminated. (B) is in effect
indicating refusal of the original offer and its place making a different offer. Such an offer by
the offeree is known as a counteroffer. No contract arises unless the original offeror accepts
Counteroffers are not limited to offers that directly contradict the original offers. Any
departure from, or addition to, the original offer is a counteroffer. A conditional acceptance is
. TOC art 7.
. TOC art 9. According to this article, in case the offeree is informed about the revocation before he learns the
offer itself, despite the revocation having arrived after the arrival of the offer, the offeror shall be relieved of his
. TOC art 5.
a counteroffer. If the original offeror accepts the counteroffer before it is revoked, there is a
binding contract on the basis of the counteroffer.
c. Rejection of Offer by Offer ee
If the offeree rejects the offer and communicates this rejection to the offeror, the offer is
terminated . Communication of a rejection terminates an offer even though the period for
which the offeror agreed to keep the offer open has not yet expired. It may be that the offeror
is willing to renew the offer, but unless this is done, there is no longer any offer for the offeree
d. Lapse of Time
When the offer states that it is open until a particular date, the offer terminates on that date
if it has not yet been accepted. This is particularly so where the offeror declares that the offer
shall be void after the expiration of the specified time. Such limitations are strictly construed.
If the offer contains a time limitation for acceptance, an attempted acceptance after the
expiration of that time has no effect and does not give rise to a contract .
e. Death or Disability of Either Party
If either the offeror or the offeree dies or becomes insane before the offer is accepted, the
offer is auotomatically terminates .
f. Subsequent Illegality
If the performance of the contract becomes illegal after the offer is made, the offer is
terminated . Thus, if an offer is made to sell alcoholic liquors but a law prohibiting such sales
is enacted before the offer is accepted, the offer is terminated.
D. Acceptance of Offer
An acceptance is the assent of the offeree to the terms of the offer. In other words, the
acceptance reflects the definite will of the other part(the offeree) to enter into proposed
contractual relationship, based on the terms and conditions contained in the offer. Whether
there has been an agreement of the parties is determined by objective standards. The other
words, an acceptance is a decleration of intention to agree to the terms of the offer given by
the party to whom the offer is made.
No particular form of words or made of expression is required, but there must be clear
expression that the offeree agrees to be bound by the terms of the offer.
When an offer has been accepted, a binding agreement or contract is created, assuming
that all of the other elements of a contract are present. Neither party can subsequently
withdraw from or cancel the contract without the consent of the other party.
An acceptance is the offeree’s manifestation of intent to enter into a binding agreement on
the terms stated in the offer . The acceptance must be absolute and unconditional. If the
offeree changes any terms of the offer or adds any new term, there is no acceptance because
the offeree does not agree to what was offered.
An offer may be accepted only by the person to whom it is directed. If anyone else
attempts to accept it, no agreement or contract with that person arises.
If the offer is directed to particular class rather than a specified individual, it may be
accepted by anyone within that class. If the offer is made to the public at large, it may be
accepted by any member of the public at large having knowledge of the existence of the offer.
a. Manner of Acceptance
The offer may specify the manner for accepting the offer. When the offeror specifies that
there must be a written acceptance, no contract arises when the offeree makes an oral
. TOC art 5.
. TOC art 3.
. AKINTURK, T., Obligation Law, Ankara, 1998, p. 21.
. TOC art. 20.
. SOZER 112.
acceptance. If the offeror calls for acceptance by a specified date, a late acceptance has no
effect. When the offeror has specified a particular manner of acceptance, the offeree cannot
accept in any other way .
Acceptance, like offer, may also be declared expressly or impliedly. After all, it is quite
customary to have acceptances made known in an implied manner. All purchases made in
our daily life, when we pick up the goods from shelves in a store and pay the Money to the
cashies, consist of implied acceptances .
b. Communication of Acceptance
If the offeror makes an offer of a unilateral contract, communicatiin of acceptance is
ordinarily not necessary. In such a case, the offeror calls for a completed or accomplished act.
If that act is performed by the offeree with knowledge of offer, the offer is accepted.
If the offer pertains to a bilateral contract, an acceptance is not effective unless
communicated . The acceptance must be communicated directly to the offeror or the
When the offeree sends an acceptance by mail, questions may arise as to the right to use
such means of communication and the time the acceptance is effective.
If the offeror does not specify otherwise, a mailed acceptance takes effect when the
acceptance is properly mailed. If the offeror specifies that an acceptance shall not be effective
until received, there is no acceptance until the acceptance is received.
c. Auction Sales
At an auction sale, the statements made by the auctioneer to draw forth bids are merely
invitations to negotiate. Each bid is an offer or bid is accepted. Usually this is done by the fall
of the auctioneer’s hammer, indicating that the highest bid made has been accepted. Since a
bid is merely an offer, the bidder may withdraw the bid at any time before it is accepted by
4. Conclusion and Effectiveness
A contract negotiated by the partiesor their agents – being present shall be formed and
start bearing effect upon the declaration of acceptance by the offeree, unles the parties agree
on a latter date. Here one should make the distindiction between deferring the effectiveness of
a contract and postponing the performance of the obligations arising from the contract . In
the first case there is, yet, no binding contractual relation between the parties, in the second
case the contract is in full force and effect but the parties shall perform their obligations at a
later date .
5. Place of For mation
Contracts entered into between parties present are deemed to be made where the parties
have reached their final agreement, in other words where the offeree has declared his
. SOZER 113; AKINTURK 24
. Customary law is an unwritten law. Customary law may give us some insights into the development of law.
Written laws have mainly developed from customary law. Customary law constituted and observed course of
conduct of the society. For a customary law to have legal validity in the Turkish system. It must be (1) antiquity,
(2) countinuity, (3) popular belief in rightness of a custom law, (4) state sanction, (5) agreement with statutory
law. In the first Article of the Turkish Civil Code states that “... there is no applicable provisions, the judge
should decide according to existing customary law....”.
. Similar to the manner where the display of goods an the shelves, with their prices attached on them and
available for the customers to pick them up by themselves constitutes implied offer.
. TOC art.9, 10.
. Contracts entered into inter absentes, are be reckoned to be concluded when the declaration of acceptance
reaches the offeror. But, such a contract becomes effective and therefore legally binding when the declaration of
acceptance was dispatched by the offeree(TOC art. 10/I). In cases, where no Express declaration of acceptance
was necessary, the effectiveness of the contract would start when the offer has reached the offeree(TOC art.
. ANSAY 9.
acceptance to the offeror; as a matter of fact that is the moment when the contract became
6. Freedom of Contract
Freedom of contract takes place in the constitutions of each state and with respect to
Turkey it is art. 48 of Turkish Constitution . Freedom of contract covers a large area and
donetes different conceptions. But, the fundamental understanding here is that the individuala
are granted the right to arrange for their private lives in a way that suits their interests and in
accordance with their free will.
Because a contract arises when an offer is accepted, it is necessary to find that there was
an offer and that it was accepted. If either element is missing, there is no contract.
An offer does not exist unless the offeror has contractual intent. This intent is lacking if
the statement of the person is merely an invitations to negotiate and cannot be accepted.
An offer must be definite. If an offer is indefinite, its acceptance will not create a contract
because it will be held that the resulting agreement is too vague to enforce.
In same cases, no contract arises because there is no offer that satisfies the requirements
just stated. In other cases, there was an offer, but it was terminated before it was accepted.
The ordinary offer may be revoked at any time by the offeror.
When the offer is accepted, a contract arises. Only the offeree can accept an offer, and the
acceptance must be of the offer exactly as made without any qualification or change.
Ordinarily, the offeree may accept or reject as the offeree choose.
The acceptance is any manifestation of intent to agree to the terms of the offer. Ordinarily,
silence or failure to act does not constitute acceptance. An acceptance does not exist until the
words or conduct demostrating assent to the offer is communicated to the offeror. Acceptance
by mail takes effect at the time and place when and where the letter is mailed or the fax is
transmitted. A telephoned acceptance is effective when and where spoken in to the phone.
. SOZER 115.
. It also take place art. 19/I of the TOC., which states that “the subject matter of a contract can be freely
decided within the limits set by the law”.