BUSINESS

 LAW  (BLAW  202)  –  Lecture  Notes  

 
law  and  other  social  rules  and  conventions   2  
I-­‐  Law  as  Social  Order   2  
A)  Relationship  between  law  and  morality   3  
B)  Law  As  A  Cultural  Construct   4  
II-­‐  Sources  of  Law   4  
Legal  Sources  of  Turkish  Law   4  
III)  LEGAL  SYSTEMS   8  
A)  Common  Law  &  Civıl  Law   8  
Differences  between  common  law  and  civil  law   9  
B)  Islamic  Law   11  
C)  Socialist  law   12  
Private  law  and  public  law   13  
I)  In  general   13  
III)  Areas  of  Public  Law   17  
A)  Constitutional  law   17  
B)  Administrative  law   20  
C)  Criminal  Law   21  
II)  Areas  of  Private  Law   23  
A)  CIVIL  LAW   23  
B)  Law  of  Obligations   30  
Contract  and  TORT   32  
I)  Law  of  contracts   32  
A)  Principle  of  Freedom  of  Contract   32  
B)  Formation  of  Contracts   33  
C)  Representation  (Temsil)   35  
D)  Classification  of  Contracts,  in  terms  of  the  degree  of  their  enforceability   35  
E)  Termination  of  Contracts   36  
II)  Tort   36  
A)  Elements  of  an  action  in  tort   37  
B)  Strict  liability   38  
SECURITY  CONTRACTS   39  
I)   Personal  Securities   39  
A)   Suretyship  (Kefalet)   39  
B)  Guarantees  (Garanti)   43  
C-­‐  Bills  of  Exchange  Guarantees  (Avals)   43  
II)  Real  Securities   44  
A)   Real  Security  over  Immovable  Property   44  
B)  Real  Security  over  Movables   46  
LAW  OF  SALES  CONTRACTS   47  
I)   Sales  contracts  ın  general   47  
II)   United  Nations  Convention  on  Contracts  for  the  International  Sale  of  Goods  (CISG)
  48  
 A)  In  general   48  
B)  Sphere  of  Application  and  General  Provisions  (Articles  1-­‐13)   50  
B)  Formation  of  the  Contract  (Articles  14–24)   54  
C)  Sale  of  Goods  (Articles  25–88)   55  
III)   BASIC  ELEMENTS  OF  AN  INTERNATIONAL  SALES  CONTRACT   62  
A)   Preamble    &  Recital   62  
B)  The  delivery  method-­‐  Incoterms   63  
IV)   ICC  MODEL  SALES  CONTRACT   71  
Gaps  in  the  Model  Contract   88  
 
 
WEEK  1-­‐2  
 
LEARNING OUTCOME
¢Distinguish between law and other social rules and conventions
¢ Distinguish between civil law and common law
 

LAW AND OTHER SOCIAL RULES AND CONVENTIONS

 
LAW:  Oxford  English  Dictionary  
The   body   of   rules,   whether   formally   enacted   or   customary,   which   a   particular  
State   or   community   recognizes   as   governing   the   action   of   its   subjects   or   its  
members  and  which  it  may  enforce  by  imposing  sanctions.    
 
I-­‐  LAW  AS  SOCIAL  ORDER  
One   of   the   prominent   characteristics   of   every   social   structure   is   that,  
some   degree   of   order   is   needed   in   order   to   enable   individuals   to   interact     and  
organize   their   relationships.   In   today’s   modern   society   law   plays   an   important  
role  in  establishing  and  maintenance  of  social  order.  However  law  is  not  the  only  
means  to  institute  order  in  human  relations.    
 
 
 
• You shall not make for yourself an idol  
• You shall not kill    
 
• You shall not commit adultery  
 
• You shall not steal  
 
• You shall not bear false witness against your
 
neighbor    
• You shall not covet anything that belongs to your  
neighbor.  

from the “Ten Commandments”  

Legal  rule,  moral  rule,  religious  rule  and  social  conventions  altogether  make  up  
the   social   order.   Difference   is:   Failure   to   adhere   to   legal   rules   may   result   in  
sanctions   imposed   by   the   state.   Law   and   power   are   closely   connected.   In   a  
lawless   society,   power   will   reign   supreme,   while   in   a   society   of   rule   of   law,  
power  is  reigned  by  the  law.  
 
To   sum   up:   Laws   are   –enforceable-­‐   rules   regulating   the   activities   of  
societies   and   a   set   of   such   rules   regulating   a   particular   society   at   a   particular  
time   is   called   a   legal   system.   “Law”   means   objective   rules,   but   “Right”   is   a  
subjective  authority  given  to  a  person  for  use  of  the  rules  of  Law.  
 
 
Some  examples  of  non-­‐binding  social  rules,  which  still  design  the  social  structure  
and  social  interactions:    
 
-­‐-­‐Religious  Rules  (Dini  Kurallar)  
-­‐-­‐  Moral  Rules  (Ahlak  Kuralları)  
-­‐-­‐Customary  Practices  (Örf  ve  Adet)  
-­‐-­‐Rules  of  Conduct-­‐Etiquette  (Davranış  Kuralları)  
 
A)  RELATIONSHIP  BETWEEN  LAW  AND  M ORALITY  
 
-­‐ Morality   and   law   are   not   identical   and   do   not   coincide.   The   proof   is   the  
existence  of  unjust  laws,  such  as  those  enforcing  slavery.  For  example,  the  
issue  of  same  sex  marriage  creates  some  tension  between  moral  rules  and  
constitutional  right  of  personal  freedom.  
 
-­‐ Law   and   morality   have   a   strong   tendency   to   overlap.   The   existence   of  
laws   that   serve   to   defend   basic   values-­‐-­‐such   as   laws   against   murder…   -­‐-­‐
prove   that   the   two   can   work   together.   Morality   can   influence   the   law   in  
the   sense   that   it   can   provide   the   reason   for   making   certain   groups   of  
immoral  actions  illegal.  
 
-­‐ Law   and   morality   are   different   in   the   manner   that   each   achieves  
obedience.   For   laws,   people   obey   “at   least   partly   through   fear   of  
punishment” 1  whereas   with   morality,   people   obey   because   what   is  
morally   correct   is   “habit-­‐like   or   second   nature.   Social   norms   are   the  
motley   of   informal,   often   unspoken   rules,   guides   and   standards   of  
behavior  the  authority  for  which  is  vague  if  not  diffuse,  and  the  communal  
sanction   for   which   can   be   swift   and   cutting.   These   nonlegal   rules   and  
                                                                                                               
1  Garrett,  J.  Basic  Observations  on  Law  and  Morality.  

http://www.wku.edu/~jan.garrett/320/320lawmo.htm  
 obligations   are   followed   and   fulfilled   in   part   because   failure   to   do   so  
brings  upon  the  transgressor  such  social  sanctions  as  induced  feelings  of  
guilt,  shame  or  threat  of  condemnation  from  the  society.2  
 
 
B)  LAW  AS  A  CULTURAL  CONSTRUCT  
 
Each   society   develops   and   implements   a   system   of   justice   based   upon,  
and   reflective   of,   the   perceived   values   and   needs   at   a   given   time.   Law   is   a  
reflection   of   the   cultural   beliefs   of   dominant   groups   within   society,   with   the  
administration   of   justice   and   the   application   of   law   as   a   function   of   the  
worldview  of  a  community  in  time  and  place.  Subsequently,  the  approach  of  one  
cultural  group  toward  legal  and  justice  issues  may  be  very  different  from  that  of  
another.   In   any   society,   something   is   an   offence   under   law   only   because   the  
society  has  deemed  it  to  be  so.  
 
 
 
II-­‐  SOURCES  OF  LAW    
 
The  sources  of  Turkish  domestic  law,  in  descending  order  of  importance,  are  
• The  Constitution  of  Turkey  (Anayasa)  
• Laws  (Codes  or  Statutes)  (Kanun)  
• International  treaties  (Milletlerarası  Anlaşmalar)  
• Decree  Laws  (statutory  decrees)  (Kanun  Hükmünde  Kararname)  
• Regulations  (Tüzük)  
• By-­‐laws  (Yönetmelik)  
 
LEGAL  SOURCES  OF  TURKISH  LAW  
 
The  primary  sources  of  Turkish  law  are  the  constitution,  laws,  statutory  decrees,  
international  treaties,  regulations,  and  by-­‐laws.    

1-­‐The   C onstitution    
 
The  highest  source  of  Turkish  legal  order  is  the  constitution.  According  to  Article  
11  of  the  Constitution:    
“The   provisions   of   the   Constitution   are   fundamental   legal   rules  
binding   upon   legislative,   executive   and   judicial   organs,   and  

                                                                                                               
2  Patrick  S.  O’Donnell,  Social  Norms  &  Law:  An  Introduction  
 administrative   authorities   and   other   institutions   and  
individuals.    Laws  shall  not  be  in  conflict  with  the  Constitution.”    
 

2-­‐Statutes  
 
The   Turkish   Grand   National   Assembly   holds   the   power   to   make,   amend,   and  
abrogate   laws   as   authorized   by   article   87   of   the   Constitution.   Article   88   holds  
that  legislative  bills  shall  be  proposed  by  the  Council  of  Ministers  and  individual  
deputies.   Such   bills   are   debated   and   adopted   by   the   Parliament   in   its   plenary  
session   with   a   simple   majority   as   regards   with   ordinary   bills.   According   to  
Article  96  of  the  Constitution:    
 
“Unless   otherwise   stipulated   in   the   Constitution,   the   Turkish   Grand  
National  Assembly  shall  convene  with  at  least,  one-­‐third  of  the  total  
number  of  members  and  shall  take  decisions  by  an  absolute  majority  
of   those   present;   however,   the   quorum   for   decisions   can,   under   no  
circumstances,  be  less  than  a  quarter  plus  one  of  the  total  number  of  
members.    
Members  of  the  Council  of  Ministers  may  delegate  a  minister  
to   vote   on   their   behalf   in   sessions   of   the   Turkish   Grand   National  
Assembly   which   they   are   unable   to   attend.   However,   a   minister   shall  
not  cast  more  than  two  votes  including  his  or  her  own.”    
   
According   to   article   89   of   the   Constitution,   legislative   bills   adopted   by   the   Grand  
National  Assembly  shall  be  submitted  to  the  President  of  the  Republic  for  their  
promulgation.   He   shall,   within   the   same   period,   refer   to   the   Turkish   Grand  
National  Assembly  for  further  consideration,  laws  which  he  deems  wholly  or  in  
part   or   unsuitable   for   promulgation,   together   with   a   statement   of   his   reasons.   In  
the   event   of   being   deemed   unsuitable   by   the   President,   the   Turkish   Grand  
National   Assembly   may   only   discuss   those   articles   deemed   to   be   unsuitable   by  
the  President.  After  that  if  the  Grand  National  Assembly  readopts  the  bill  without  
a   change,   the   bill   shall   be   promulgated   by   the   President.   Due   to   time  
considerations  bills  concerning  the  budget  are  excluded  from  this  scrutiny  of  the  
President.  Laws  are  only  enacted  by  publication  in  the  Official  Gazette.    
 

3.   S tatutory   D ecrees  
 
The   Turkish   Grand   National   Assembly   may   empower   the   Council   of   Ministers  
with   a   legislation   to   issue   decrees   having   the   force   of   law.   However,   the  
fundamental   rights,   individual   rights   and   duties   included   in   the   First   and   Second  
Chapter   of   the   Second   Part   of   the   Constitution   and   the   political   rights   and   duties  
listed   in   the   Fourth   Chapter,   cannot   be   regulated   by   decrees   except   during  
periods  of  martial  law  and  states  of  emergency.  In  addition  to  that;  the  purpose,  
scope,principles   and   operative   period   of   the   decree   shall   be   defined   in   the  
empowering  legislation.    
 
Such  statutory  decrees  have  the  same  legal  effects  as  laws.  As  mentioned  above  
the   1982   Constitution   makes   a   distinction   between   the   two   categories   of  
statutory   decrees:   decrees   adopted   under   normal   circumstances   as   stated   in  
Article   91;   and   those   adopted   under   circumstances   of   state   of   emergency   and  
martial  law.    
 

4-­‐International   T reaties  
 
According   to   Article   90   of   the   Constitution,   international   treaties   are   another  
source  of  Turkish  law.    
“The   ratification   of   treaties   concluded   with   foreign   states   and  
international  organizations  on  behalf  of  the  Republic  of  Turkey,  shall  
be  subject  to  adoption  by  the  Turkish  Grand  National  Assembly  by  a  
law  approving  the  ratification.    
Agreements   regulating   economic,   commercial   and   technical  
relations,   and   covering   a   period   of   no   more   than   one   year,   may   be  
put   into   effect   through   promulgation,   provided   they   do   not   entail  
any   financial   commitment   by   the   state,   and   provided   they   do   not  
infringe  upon  the  status  of  individuals  or  upon  the  property  rights  of  
Turkish   citizens   abroad.   In   such   cases,   these   agreements   shall   be  
submitted   to   the   Turkish   Grand   National   Assembly   for   information  
within  two  months  of  their  promulgation.  
Agreements   in   connection   with   the   implementation   of   an  
international   treaty,   and   economic,   commercial,   technical,   or  
administrative   agreements   which   are   concluded   depending   on   the  
authorization  as  stated  in  the  law  shall  not  require  the  approval  of  
the   Turkish   Grand   National   Assembly.   However,   agreements  
concluded   under   the   provision   of   this   paragraph   and   affecting  
economic   or   commercial   relations   and   the   private   rights   of  
individuals  shall  not  be  put  into  effect  unless  promulgated.  
Agreements  resulting  in  amendments  to  Turkish  laws  shall  be  
subject  to  the  provisions  of  the  first  paragraph.  
International  treaties  which  are  duly  put  into  effect  have  the  
same  effect  as  domestic  laws.  No  appeal  to  the  Constitutional  Court  
shall  be  made  with  regard  to  these  agreements,  on  the  grounds  that  
they  are  unconstitutional.  In  case  of  conflicts  between  international  
agreements  duly  put  into  effect  regarding  basic  rights  and  freedoms  
 and   domestic   laws,   due   to   different   provisions   on   the   same   issue,   the  
provisions  of  international  treaties  shall  be  prevail.”  
   
As   seen   in   the   last   paragraph   of   article   90,   in   case   of   a   conflict   between   domestic  
law   and   an   international   treaty   regarding   issues   on   basic   rights   and   freedoms;  
the  provisions  of  the  relevant  international  treaty  will  be  applied.  Thus,  it  is  not  
wrong  to  say  that  the  status  of  such  treaties  (treaties  regarding  basic  rights  and  
freedom)  is  somewhere  between  the  Constitution  and  ordinary  domestic  law.    
 

  5 -­‐Regulations  
 
Regulations  are  written  explanations  of  a  particular  law  on  how  the  law  will  be  
interpreted,   applied   or   enforced.   The   article   115   of   the   Constitution   authorizes  
the  Council  of  Ministers  to  issue  regulations  in  accordance  with  the  constitution  
and  laws:    
 
“The  Council  of  Ministers  may  issue  regulations  governing  the  mode  
of   implementation   of   laws   or   designating   matters   ordered   by   law,  
provided   that   they   do   not   conflict   with   existing   laws   and   are  
examined   by   the   Council   of   State.     Regulations   shall   be   signed   by   the  
President   of   the   Republic   and   promulgated   in   the   same   manner   as  
laws.”    
   
As   seen   in   the   article   regulations   are   subject   to   the   examination   of   the   Council   of  
State  and  cannot  be  contrary  to  the  law  itself.  They  are  also  subject  to  the  legality  
review  of  the  administrative  courts  as  stated  in  the  Article  125.  
   

6-­‐By-­‐laws  
 
By-­‐laws   are   written   instructions   regarding   relevant   laws   and   regulations.   By-­‐
laws  are  regulated  in  the  Article  124  of  the  Constitution:    
 
“The  Prime  Ministry,  the  ministries,  and  public  corporate  bodies  may  
issue   by-­‐laws   in   order   to   ensure   the   application   of   laws   and  
regulations  relating  to  their  particular  fields  of  operation,  provided  
that   they   are   not   contrary   to   these   laws   and   regulations.     The   law  
shall   designate   which   by-­‐laws   are   to   be   published   in   the   Official  
Gazette.”  
   

7-­‐Jurisprudence   ( Hukuk   Ö ğretisi)  

 
The   Constitution   grants   the   Grand   National   Assembly   the   sole   authority   to   make  
law   and   prohibits   the   delegation   of   legislative   power   to   any   governmental  
agency.   However,   judicial   decisions   are   not   entirely   without   a   binding   effect   in  
Turkish   law.   Decisions   of   the   supreme   courts   have   a   binding   effect   on   the  
decisions  of  lower  courts  within  their  jurisdiction.      
 
The  prominent  legal  traditions  in  the  contemporary  world  are:  civil  law,  
common  law,  Islamic  law  and  socialist  law  .  
 
A  legal  tradition  is  a  set  of  deeply  rooted,  historically  conditioned  attitudes  about  
the   nature   of   law,   about   the   role   of   law   in   the   society   and   the   polity,   about   the  
proper  organization  and  operation  of  a  legal  system,  and  about  the  way  law  is  or  
should  be  made,  applied,  studied,  perfected,  and  taught.3  
 
III)  LEGAL  SYSTEMS    
 
A)  COMMON  LAW  &  CIVıL  LAW  
The  term  ‘common  law’  refers  to  legal  systems  which  have  adopted  the  historic  
English  legal  system.  Amongst  these  is,  the  United  States  (except  from  Louisiana)  
together  with  many  other  Commonwealth  and  former  Commonwealth  countries  
such  as  India,  Pakistan,  Malaysia  or  Jamaica.  
 
Common   law   tradition   evolved   in   England   from   the   11th   Century   onwards.  
William   the   Conqueror   arrived   in   1066   and   combined   the   best   of   the   Anglo-­‐
Saxon  law  (the  law  of  the  Britons,  Angles  and  Saxons)  with  Norman  law,  which  
resulted   in   the   English   common   law,   much   of   which   was   by   custom   and  
precedent   rather   than   by   written   code.   The   American   colonies   followed   the  
English  Common  Law  with  minor  variations,  and  the  four-­‐volume  Commentaries  
on  the  Laws  of  England  by  Sir  William  Blackstone  (completed  in  1769)  was  the  
legal  "bible"  for  all  American  frontier  lawyers  and  influenced  the  development  of  
state   codes   of   law.   Today   to   a   great   extent,   common   law   has   been   replaced   by  
written   statutes,   and   a   gigantic   body   of   such   statutes   have   been   enacted   by  
federal   and   state   legislatures   supposedly   in   response   to   the   greater   complexity  
of   modern   life.   The   same   can   be   said   about   the   Common   Law   in   England.  
Common   Law   is   still   the   basis   of   modern   English   Law   and   although   it   is  
constantly   developing   by   means   of   the   doctrine   of   precedent   (which   can   be  
described   roughly   as   judge-­‐made   law),   with   the   parliament   developing   in  
strength   legislation   gradually   overtook   judicial   law-­‐making.   There   is   a   strong  
tendency   in   English   Law,   especially   starting   from   70s,   to   introduce   bills   and   acts  

                                                                                                               
3  Prof.  William  Tetley,  Q.C  Mixed  Jurisdictions:  Common  Law  vs.  Civil  Law  (Codified  and  

Uncodified)  
which   hindered   the   judges’   ability   to   innovate   and   confined   their   activities   in  
certain  areas.  
 
The   term   ‘civil   law’   refers   to   those   other   jurisdictions   which   have   adopted   the  
European  continental  system  of  law  derived  essentially  from  ancient  Roman  law,  
but   owing   much   to   the   Germanic   tradition.   Civil   law   has   its   origin   in   Roman   law,  
as   codified   in   the  Corpus  Juris  Civilis  of  Justinian*,  and   as   subsequently   developed  
mainly  in  Continental  Europe.    The  civil  law  legal  tradition  can  be  categorized  the  
Romanic   laws,   influenced   by   French   law4,   and   the   Germanic   family   of   laws,  
dominated   by   German   jurisprudence.   In   civil   law   systems,   law   is   principally  
codified  and    premised  on  general  principles,  which  are  systemised  in  a  written  
regulation.    
 
Reality  is  that  it  is  increasingly  difficult  to  identify  countries  with  solely  one  legal  
tradition   or   the   other.   The   cross-­‐pollination   between   these   legal   cultures   has  
enriched   both   traditions,   creating   a   global   legal   mosaic.   The   conceptual  
distinctions   between   Civil   Law   and   Common   Law   systems   are   noteworthy   in  
certain  areas,  but  at  the  same  time,  there  appears  to  be  growing  agreement  that  
the  substantive  differences  are  becoming  increasingly  less  significant.5  
 
DIFFERENCES  BETWEEN  COMMON  LAW  AND  CIVIL  LAW  
 
Prior   to   the   19th   century,   There   was   no   sharp   distinction   between   Continental  
law   and   the   common   law.   Common   law   and   civil   law   legal   traditions   share  
similar  social  objectives  (individualism,  liberalism  and  personal  rights)  and  they  
have  in  fact  been  joined  in  one  single  family,  the  Western  law  family,  because  of  
this  functional  similarity.  
 
Civil   law   is   the   dominant   legal   tradition   today   in   most   of   Europe,   all   of   Central  
and   South   America,   parts   of   Asia   and   Africa,   and   even   some   discrete   areas   of   the  
common-­‐law  world  (e.g.,  Louisiana,  Quebec,  and  Puerto  Rico).  
 

1)     T he   r ole   o f   t he   l egislator   :  
 
French   civil   law   adopts   Montesquieu’s   theory   of   separation   of   powers   (kuvvetler  
ayrılığı),   whereby   the   function   of   the   legislator   is   to   legislate,   and   the   function   of  
the   courts   is   to   apply   the   law.   Common   law,   on   the   other   hand,   finds   in   judge-­‐
made  precedent  (İçtihat)  the  core  of  its  law.    

                                                                                                               
4  French  Code  Civil  from  1804  (Code  Napoleon)  

5  INTRO   TO   CIVIL   LAW   LEGAL   SYSTEMS,   INPROL   Consolidated   Response   (09-­‐002),   May  

2009  
  

2)   S ource   o f   l aw   i s   a nother   d istinguishing   f eature:    

 
Civil  law  codes  provide  the  core  of  the  law  -­‐  general  principles  are  systematically  
and  exhaustively  exposed  in  codes  and  particular  statutes.  Common  law  statutes,  
on   the   other,   complete   the   case   law,   which   latter   contains   the   core   of   the   law  
expressed   through   specific   rules   applying   to   specific   facts.   Case   law,   which   is   Ω

commonly  referred  to  as  common  law,  is  based  on  decisions  made  by  judges  in  
court   trials.   These   decisions   by   courts   that   are   used   for   guidance   are   called  
precedent.6  
 
To  sum  up,  it  is  clear  that  in  both  legal  traditions  codes  do  exist  and  are  applied  
by  practitioners,  but  that  these  codes  differ  in  their  style:   While  civil  law  codes  
and   statutes   are   mostly   concise   and   do   not   provide   definitions   but   state  
principles   in   broad,   general   phrases,   common   law   codifying   statutes   provide  
detailed   definitions   and   each   rule   sets   out   lengthy   enumerations   of   specific  
applications  or  exceptions  
 

3)   L egal   e ffect   o f   e arlier   j udgments    

 
Principle  of  precedents  and  doctrine  of  stare  decisis  is  the  the  method  of  common  
law   to   analyze   previous   court   decisions,   to   find   a   general   principle   in   each   of  
them   and   to   transfer   these   principles   to   a   current   dispute   that   needs   to   be  
decided.   Common   law   judges   are   subject   to   the   so   called   doctrine   of   stare  decisis  
and  thus  in  the  first  instance  are  bound  by  precedents  rendered  by  higher  courts.  
A  precedent  is  binding  until  it  is  overruled  by  a  decision  of  a  higher  court  or  until  
it   is   overridden   through   a   statute.     A   higher   court   can   also   reconsider   and  
overrule  its  own  previous  decision.  
 
Civil   law   judges   are   be   primarily   bound   to   codes   and   reason.   However   it   is   not  
entirely   correct   to   assume   that   common   law   judges   are   strictly   bound   to   the  
authority   of   higher   courts   while   civil   law   judges   are   only   bound   to   codes   and  
reason.  The  civil  law  focuses  rather  on  legal  principles.  Judge  traces  their  history,  
identifies   their   function,   determines   their   domain   of   application,   and   explains  
their  effects  in  terms  of  rights  and  obligations.  In  civil  law  jurisdictions,  the  first  
step   in   interpreting   an   ambiguous   law   is   to   discover   the   intention   of   the  

                                                                                                               
Ω
 English  word  “law”  means  all  legal  rules  whatever  their  sources,  while  the  French  word  
“loi”  refers  only  to  written  statutory  rules.    The  word  “droit”  in  the  French  civil  law  is  the  
equivalent  of  “law”  in  English  common  law.  
6  Ha  Nguyen  &  Megan  Gatley,  Chapter  1a:  Introduction  to  Law  
legislator   by   examining   the   legislation   as   a   whole,   including   the   “travaux  
préparatoires”,  as  well  as  the  provisions.    
 
 

4)   A ppointment   /   s election   o f   j udges  

 
Judges  in  the  common  law  countries,  particularly  judges  of  the  higher  courts,  are  
typically   selected   and   appointed   only   from   among   experienced   practicing  
lawyers.   It   is   quite   usual   in   civil   law   to   appoint   young   highly   skilled   but  
inexperienced  graduates  to  judgeships.  
 

5)   P rocedural   d ifferences  –   a dversarial   v s.   i nquisitorial/proceedings  

 
Court  proceedings  in  common  law  may  be  described  –  at  least  in  private  law  –  as  
strictly  adversarial  where  parties  in  a  dispute  have  the  responsibility  for  finding  
and   presenting   evidence.   In   this   system   the   attorneys   are   responsible   for  
presenting  the  facts  of  the  case,  the  positions  of  each  party  and  the  legal  views  
including   all   relevant   precedents.   In   an   ideal   common   law   procedure   the   judge  
has   the   function   only   to   manage   the   proceeding,   to   review   all   facts   of   the   case  
and  legal  views  presented  to  him  and  finally  to  decide  the  case  on  that  basis,  or  
when  the  case  is  tried  by  a  judge  and  jury,  to  sum  up  the  evidence  and  the  legal  
principles  for  the  assistance  of  the  jury.  
 
In   proceedings   of   civil   law,   judges   have   a   much   more   active   part   to   play   than  
judges  in  common  law.  That  is  why  civil  law  proceedings  –  apart  from  public  and  
criminal   proceedings   –   may   be   described   as   inquisitorial   in   contrast   with  
common   law   proceedings.   Thus   civil   law   judges   have   many   functions   which   in  
common   law   the   attorneys   are   responsible.   In   civil   law,   judge   is   generally  
responsible  for  the  oral  questioning  of  the  witnesses  in  taking  evidence.  Thereby  
the  judge  asks  the  witnesses  about  the  factual  issues  of  the  case,    
 
In  common  law,  each  party  can  bring  forward  and  question  its  ‘own’  expert  and  
the  judge  only  has  to  decide  which  expert  is  more  convincing,  in  civil  law  it  is  the  
judge   who   in   most   cases   appoints   the   expert,   often   a   sole   witness,   and   then  
accepts  his  opinion.  
 
 
 
B)  ISLAMIC  LAW  
 
As  to  Islamic  Law  (Shari’a)  the  sources  of  law  are  very  different  compared  with  
the   other   legal   families.   Islamic   law   is   primarily   a   religious   law.   All   the   schools  
and   sects   of   Islam   accept   that   the   two   main   sources   of   the   Shari’a   are  the  Qur’an  
and  the  Sunna.    
 
C)  SOCIALIST  LAW  
 
Socialist  law  is  the  official  name  of  the  legal  system  used  in  Communist  states.  It  
is   based   on   the   civil   law   system,   with   major   modifications   and   additions   from  
Marxist-­‐Leninist  ideology.  Marxists  explain  that  law  and  human  rights  arise  from  
the  interactions  of  human  beings  within  social  structures  that  contain  economic  
class   distinctions.   Class   divisions   within   societies   create   conflict   and   disorder  
and  therefore  law  (and  the  state)  comes  into  existence  to  deal  with  this  conflict.  
According   to   Engels,   “In   order   that   these   .   .   .   classes   with   conflicting   economic  
interests,   may   not   annihilate   themselves   and   society   in   a   useless   struggle,   a  
power   becomes   necessary   that   stands   apparently   above   society   and   has   the  
function  of  keeping  down  the  conflicts  and  maintaining  ‘order.’  
 
Lenin   explains,   “The   State   is   an   organ   of   class   domination,   an   organ   of  
oppression   of   one   class   by   another;   its   aim   is   the   creation   of   ‘order’   which  
legalizes  and  perpetuates  this  oppression  by  moderating  the  collisions  between  
the  classes.”  Laws  are  thus  imposed  by  the  state  to  quell  these  disturbances.  
Howard  Selsem  explains,  “Marxism,  which  has  been  so  often  accused  of  seeking  
to   eliminate   moral   considerations   from   human   life   and   history   emphasizes  
rather   the   moral   issues   involved   in   every   situation.   It   does   so,   however,   not   by  
standing   on   a   false   platform   of   absolute   right,   but   by   identifying   itself   with   the  
real  needs  and  interests  of  the  workers  and  farmers.7  
 
   

                                                                                                               
7  http://www.allaboutworldview.org/marxist-­‐law.htm    
WEEK  3-­‐4  

¢Explain the difference between public and private law

¢Explain branches of public and private law
¢ Explain the sub-branches of Civil Law
¢Explain the three categories of capacity

PRIVATE LAW AND PUBLIC LAW

 
Law   can   be   divided   into   different   types,   depending   on   the   purpose   of   the  
classification:  
♦ DOMESTIC  LAW  (İç  Hukuk)  
§ only  applies  within  the  territory  of  a  sovereign  state  
§ established  and  enforced  by  the  governing  authorities  of  the  sovereign  
state  
♦ INTERNATIONAL  LAW  (Uluslararası  Hukuk)  
§ applies  in  more  than  one  sovereign  state  
§ established   by   treaty,   i.e.,   written   agreement   among   two   states,   i.e.,  
Bilateral  Treaties    or  more  than  two  states,  i.e.,  Multilateral  Treaties    
 
♦ PUBLIC  LAW  (Kamu  Hukuku)  
§ regulates  the  relationship  between  states,  governmental  agencies  and  
private  individuals  and  entities,  e.g.,  criminal  law  
♦ PRIVATE  LAW(Özel  Hukuk)  
§ regulates   the   relationship   between   private   individuals   and   entities,  
e.g.,  contract  law  
♦ MIXED  LAW  (Karma  Hukuk)  
contains  elements  of  public  and  private  law,  e.g.,  labor  law,  social  security  
law  
 
I)  IN  GENERAL  
Private   law   is   usually   defined   as   the   law   which   governs   relationships   between  
citizens/individuals  as  opposed  to  public  law,  which  is  the  law  which  deals  with  the  
relationships  between  citizens  and  the  state,  or  among  state  institutions.    
 
Continental  European  law  in  the  Roman-­‐Germanic  tradition  is  heavily  influenced  
by   the   sharp   distinction   between   private   law   and   public   law. 8  Romans  
                                                                                                               
8  Andre  an  der  Walt,,  "Private   Law,   Public   Law,   Civil   Law"  Paper  presented  at  the  annual  

meeting  of  the  The  Law  and  Society  Association,  Chicago,  Illinois,  May  27,  2004  
categorised   law   in   terms   of   relationships   between   person   and   person,   person  
and   a   thing   and   person   and   the   state. 9  Relationship   between   a   statutory  
authority   and   an   individual   should   be   approached   as   a   relationship   existing  
between  the  state  and  the  individual  rather  than  an  individual  and  an  individual.  
On  the  other  hand,  within  the  English  legal  system  there  has  never  been  a  strong  
tradition  of  distinguishing  private  law  and  public  law.  
 
Private   Law   is   the   body   of   rules   which   recognize   and   provide   enforcement   of  
individual   (private)   rights.   Private   Law   affects   matters   between   individuals  
(whether   people,   groups   of   people   or   companies).   Examples   of   this   would   be  
commercial  codes  and  civil  codes.    
 
Most  civil  codes  in  Europe  were  conceived  in  the  19th  Century  when  the  Liberal  
laissez-­‐faire  ideology  was  dominant  in  Europe.  In  the  first  wave  of  codifications  
most   continental   European   legal   systems   adopted   both   a   civil   code   and   a  
commercial   code.   Main   pillars   of   private   law   have   been   absolute   property,  
binding  force  and  freedom  of  contract  and  fault-­‐based  liability  in  tort.  However,  
the   main   institutions   of   the   19th   century   private   law   construction   were   never  
undermined   as   such.   Rather,   the   desire   for   change   was   internalized   within   the  
system.  New  institutions  were  added  in  order  to  moderate  their  effect.  Abuse  of  
right,  good  faith,  strict  liability,  and  unjust  enrichment  operated  as  safety  valves  
that  removed  the  pressure  on  the  system.  
 
Private   law   consists   of   Default   and   Mandatory   Rules   as   a   result   of   party  
autonomy.  A  free  market  mainly  needs  rules  on  contacts  and  that  the  basic  rule  
of  contract  law  (and  indeed  the  basic  prerequisite  of  a  well  functioning  market)  
is   freedom   of   contract.   However,   the   market   must   be   regulated   and   therefore  
mandatory  rules  are  also  needed.  Mandatory  rules  are  the  rules  that  the  parties  
cannot  contract  around.10  
 
Public   Law:   norms   that   regulate   the   organization   and   function   of   public  
authorities   and   the   relationship   between   public   agencies   and   individual   citizens.  
Public  Law  deals  with  the  relationships  between  government  organisations  and  
ordinary   citizens   and   also   between   different   government   organisations.   Public  
law  consists  of  various  statutes,  
—Constitutional  law:  e.g.  role  and  power  of  the  institutions  within  the  state  

                                                                                                               
9  G  Samuel,  ‘Public   and   Private   Law:   A   Private   Lawyer’s   Response’  (1983)  46  The  Modern  

Law   Review   at   558   ;   Anne   Deegan,   The   Public/Private   Law   Dichotomy   And   Its  
Relationship   With   The   Policy/Operational   Factors   Distinction   In   Tort   Law,   Vol   1   No   2  
QUTLJJ  .    
10  Martijn  W.  Hesselink,  The  Structure  Of  The  New  European  Private  Law,  

http://www.ejcl.org/64/art64-­‐2.html  
—Administrative  law:  e.g.  regulates  public  authorities,  their  accountability    
—Criminal  law:  state  responsible  for  prosecution  of  crimes    
-­‐-­‐-­‐-­‐   International   law   :International   law   relates   to   issues   that   arise   between  
nations,  international  or  intergovernmental  organisations.    
 
 
 
 
 
 
 
 
 
PRIVATE  LAW             PUBLIC  LAW  
*  Civil  Law               *  Constitutional  Law  
-­‐Law  of  Persons             *  Administrative  Law  
-­‐  Family  Law               *  Criminal  Law  
-­‐Law  of  Inheritance             *  International  Law  
-­‐Law  of  Property             *  Law  of  Taxation    
-­‐  Law  of  Obligations   *Law  of  Civil  Procedure*  
  *Law   of   Enforcement  
&Bankruptcy  
*  Commercial  Law    
*  International  Private  Law  
   
However,  this  clear-­‐cut  distinction  between  private  and  public  law  does  give  rise  
to   some   doubt.   In   many   countries   the   cases   where   the   state   acts   as   a   private  
person   are   problematic.   Classical   examples   include   the   case   where   a  
municipality  buys  new  office  equipment.  Law  of  Property  
 
The   proper   classification   of   other   areas   is   often   disputed.   Civil   procedure,   for  
example,   is   treated   as   public   in   some   countries   and   as   private   in   others.   Labor  
law,   social   security,   and   various   topics   of   government   regulation(competition  
law)  are  often  referred  to  as  “mixed”  public  and  private  areas.      
Even   more   problematic   in   this   respect   is   that,   in   many   countries   private   law   is  
rapidly  disintegrating  into  functional  fields  of  law.  Usually,  these  functional  fields  
are   the   most   dynamic   branches   of   the   law:   labour   law,   medical   law,  
environmental   law,   information   law,   and   construction   law,   to   name   but   a   few.  
Their   main   characteristic,   apart   from   their   functional,   pragmatic   and   non-­‐
dogmatic  approach,  is  that  they  usually  contain  a  mix  between  private  and  public  
law  aspects.  11  
                                                                                                               
11  ibid.    
  
As   said,   private   law   is   usually   defined   as   the   law,   which   governs   relationships  
between  citizens  as  opposed  to  public  law,  which  is  the  law  that  deals  with  the  
relationships   between   citizens   and   the   state,   or   among   state   institutions.   This  
definition  is  quite  descriptive.  However,  there  is  another  recurrent  definition  of  
private   law   which   is   much   more   political.   In   this   definition   private   law   is   the   law  
relating   to   the   private   area,   which   is   free   from   State   intervention.   In   the   latter  
view  the  only  function  of  private  law  is  allocation.  In  that  view  private  law  has  an  
internal   logic   of   its   own   which   is   politically   neutral   and   is   only   concerned   with  
giving   every   person   what   she   or   he   is   entitled   to.12  Especially,   private   law   in   that  
view  has  neither  distributionist  nor  any  other  paternalistic  function:  rather  it  is  
held  that  private  law  should  not  be  instrumentalised  for  political  aims.      

                                                                                                               
12  ibid.  
                    
 
III)  AREAS  OF  PUBLIC  LAW    
 
A)  CONSTITUTIONAL  LAW  
 
Constitutional   law   defines   the   rules   and   code   of   conduct   for   the   government   and  
its   various   departments   as   well   as   the   governmental   system   of   the   country.   It  
also   states   the   most   basic   rights   of   the   individuals.   These   rights   such   as   freedom  
of   speech,   are   guaranteed   to   all   citizens   and   or   residents   of   that   country.  
Constitution   also   provides   the   framework   for   the   government   system   of   a  
country  
 

Government   systems:   Parliamentary   (Parlamenter   Sistemi)   and  

Presidential   ( Başkanlık   S istemi)Systems  
 
In   the   system   of   parliamentary   governance,   the   parliament   is   a   political   body  
that   includes   government.   In     parliamentary   democracies   the   executive   derives  
its   mandate   from   and   is   politically   responsible   to   the   legislature.   This   implies  
that  who  forms  the  government  is  not  determined  by  an  election  alone,  but  is  the  
outcome   of   a   bargaining   process   among   the   parties   represented   in   the  
parliament.13  
 
The   executive   governance   is   divided   between   the   head   of   the   government,  
cabinet,  i.e.  prime  minister,  chancellor  and  head  of  state.  Head  of  state,  president  
or   a   king,   approves   the   head   of   government.   Concerning   the   structure,   the  
government   or   English   cabinet,   is   a   «collective   body»   in   which   the   prime  
minister  is  the  «first  among  equals»  (Primus  inter  pares)(Eşler  arası  birinci).14  
 
In   the   system   of   parliamentary   governance,   the   head   of   the   government,  
(chancellor,  prime  minister)  and  the  government  as  a  whole,  rest  on  the  trust  of  
the   legislative   body,   i.e.   «they   rely   on   the   trust   of   the   legislative   body   and   they  
can  be  dismissed  by  voting  or  by  giving  a  vote  of  unconfidence  from  the  part  of  
the  legislative  body.  
 
European  countries  have  adopted  versions  of  the  English  parliamentary  system,  
which   made   use   of   both   a   prime   minister   responsible   to   parliament   and   a  
                                                                                                               
13  Daniel  Diermeier,   Hülya   Eraslan,   Antonio   Merlo,   A   Structural   Model   of   Government  
Formation,  Econometrica,  Vol.  71,  No.  1  (Jan.,  2003),  pp.  27-­‐70    
http://www.jstor.org/stable/3082040  .  
14  Anđelko   Milardović,   Presidentialism  or  Parlamentarism  in  Central  and  Eastern  Europe  

in  the  Age  of  Globalisation?,  http://www.cpi.hr/download/links/en/6638.pdf    

ceremonial   head   of   state   (who   might   be   either   a   hereditary   monarch,   as   in   the  
Scandinavian   countries,   the   Netherlands,   and   Spain,   or   a   president   chosen   by  
parliament   or   by   another   body   convoked   specially   for   the   purpose).   A   notable  
exception  is  France,  which  in  its  fifth  constitution,  adopted  in  1958,  combined  its  
parliamentary  system  with  a  presidential  one.    
 
The  origin  of  the  presidential  system  is  visible  from  the  theory  of  separation  of  
powers   in   the   18th   century.   The   executive   power   is   undivided,   while   «in   the  
presidential   system   the   head   of   government   becomes   a   head   of   state».   The  
systems  of  parliamentary  governance  rest  on  the  «collective  or  plural  executive  
power,   while   the   presidential   systems   rest   on   «uncollective   executive   power  
consisting  of  one  person»  concerning  the  heads  of  ministries,  they  are  appointed  
by  the  president,  to  whom  they  are  directly  subordinated.  There  is  no  merging  of  
the  executive  and  the  legislative  power,  as  it  is  the  case  in  parliamentarism.  The  
presidential   system   rests   on   the   election   of   the   president   with   constitutional  
powers  of  presidentialism,  for  a  fixed  period  of  time.  He  cannot  be  superseded  or  
revoked  by  the  legislative  power.    
 
-­‐ Critique  of  systems  :  
 
In   presidential   systems,   both   presidents   and   Assembly   members   are   chosen   by  
popular  vote  and  they  are  not  dependent  on  each  other.  This  creates  a  problem  
of   governance   in   presidential   systems   especially   when   there   are   problems  
between   the   President   and   the   Assembly.   The   party   of   the   president   may   not  
constitute  the  majority  in  the  Parliament.  However,  in  parliamentary  systems  the  
prime  minister  is  a  member  of  the  parliament  and  the  parliament  has  the  right  to  
change  the  prime  minister  by  giving  no  confidence  vote.  Secondly  in  presidential  
systems,  the  fixed  term  of  the  president’s  office  is  critisized  for  its  rigidity,  which  
is   less   favorable   to   democracy.   President   is   elected   and   should   stay   in   power  
during  his  term;  the  Assembly  does  not  have  the  power  to  remove  the  president.  
The   presidentialism   means   the   identification   of   the   entire   nation   and   national  
interest  with  a  man.  By  many  thinkers  this  is  found  not  to  be  in  conformity  with  
the  idea  of  democracy  and  in  addition,  the  president  may  act  more  intolerantly  
towards   the   opposition   in   this   kind   of   a   system.   Because   of   the   loose   ties  
between  political  parties  and  presidents,  presidents  may  govern  the  country  in  a  
populist,  anti-­‐institutionalist  fashion  in  presidential  systems.  15  
 
Thinkers   who   are   critical   of   parliamentarism   assert   that   parliamentary  
governments  do  not  necessarily  produce  majority  governments.  Moreover,  they  
claim   that   due   to   the   high   party   discipline   in   parliamentary   system,   many  
                                                                                                               
15  Ozan   Örmeci,   PRESIDENTIAL   VERSUS   PARLIAMENTARY   DEMOCRACY,  
http://ydemokrat.blogspot.com/2010/11/presidential-­‐versus-­‐parliamentary.html    
decisions   are   taken   from   the   party   center   and   deputies   are   expected   to   give  
consent   to   these   decisions.   They   think   that   dual   legitimacy   exists   in   many  
parliamentary   systems   too   and   crises   take   place   between   upper   and   lower  
houses   of   a   bicameral   legislature.   Moreover,   they   assert   that   prime   minister  
using  their  decree  powers  do  not  have  less  autonomy  than  presidents.  16  
 
-­‐ Semi  presidential  Systems  
 
There   is     also   third   hybrid   regime,   which   is   called   semipresedential   system.   A  
semipresidential   regime   has   three   basic   characteristics:   the   popular   election   of  
the   president,   presidential   constitutional   powers,   and   the   separate   office   of   a  
prime  minister.  
 

Founding   p rinciples   o f   T urkish   C onstitution 17    

 
The   Constitution   asserts   that   Turkey   is   a   secular   and   democratic     republic   that  
derives   its   sovereignty   from   Turkish   Nation,   who   delegates   its   exercise   to   an  
elected  unicameral  parliament,  the  Turkish  Grand  National  Assembly.  
Part   Two   of   the   constitution   is   the   bill   of   rights.   Article   Twelve   guarantees  
"fundamental  rights  and  freedoms",  which  are  defined  as  including  the:  
Article   17:   Personal   Inviolability,   Material   and   Spiritual   Entity   of   the   Individual  
(right  to  life)  
Article  18:  Prohibition  of  Forced  Labour  
Article  19:  Personal  Liberty  and  Security  (security  of  person)  
Article  20:  Privacy  of  Individual  Life  
Article  21:  Inviolability  of  the  Domicile  
Article  22:  Freedom  of  Communication  
Article  23:  Freedom  of  Residence  and  Movement  
Article  24:  Freedom  of  Religion  and  Conscience  
Article  25:  Freedom  of  Thought  and  Opinion  
Article  26:  Freedom  of  Expression  and  Dissemination  of  Thought  
Article  27:  Freedom  of  Science  and  the  Arts  
Article  35:  Right  to  property  
 
Part  Three  deals  with  fundamental  organs  of  the  state.  With  regard  to  Legislative  
Power,     Articles   75-­‐100   sets   the   rules   for   the   election   and   functioning   of   the  
Turkish   Grand   National   Assembly   as   the   legislative   organ,   as   well   as   the  
conditions   of   eligibility,   parliamentary   immunity   and   general   legislative  
procedures  to  be  followed.  Per  Articles  87  and  88,  both  the  government  and  the  

                                                                                                               
16  ibid.    

17  This  part  is  taken  from  Vikipedia  

parliament  can  propose  statutes,  however  it  is  only  the  parliament  that  has  the  
power  to  enact  laws.  
 
 
B)  ADMINISTRATIVE  LAW  
 
Administrative  law  exists  as    a  separate  branch  in  civilian  law  tradition.  It  defines  
the   structural   position   of   administrative   agencies   within   the   governmental  
system,   specifies   the   decisional   procedures   those   agencies   must   follow,   and  
determines   the   availability   and   scope   of   review   of   their   actions   by   the  
independent   judiciary.   The   traditional   core   of   administrative   law   has   focused   on  
securing  the  rule  of  law  and  protecting  liberty  by  ensuring  that  agencies  follow  
fair  and  impartial  decisional  procedures,  act  within  the  bounds  of  the  statutory  
authority  delegated  by  the  legislature,  and  respect  private  rights.18  
 
The  legitimating  principles  of  any  Western  administrative  law  system  are  found  
in  the  twin  ideals  of  democracy  and  the  rule  of  law  (hukuk  devleti  ilkesi).  The  rule  
of   law   ideal   forms   the   central   background   theory   against   which   the   principles   of  
administrative   law   operate,   while   at   the   same   time   acting   as   a   governing  
principle.   Administrative   law   is   the   law   relating   to   the   control   of  
governmental  power.  The  primary  purpose  of  administrative  law  is  to  keep  the  
powers   of   government   within   their   legal   bounds,   so   as   to   protect   the   citizen  
against  their  abuse.    
   It  gives  rise  to  a  further  set  of  principles,  which  form  the  body  of  administrative  
law.   The   primary   function   of   administrative   law   is   the   control   of   public   power.  
Administrative   law   established   itself   during   the   19th   century,   usually   in   the  
context   of   constitutions   that   placed   much   emphasis   on   functional   separation   of  
powers.   Administrative   law   has   played   an   important   part   in   the   struggle   for  
limited  government,  which  established  judicial  control  over  ministerial  actions.    
 
Throughout  the  common  law  world,  administrative  law  has  evolved  as  part  of  a  
system   of   ‘checks   and   balances’.   Administrative   law   requires   government   and  
administration   to   stay   within   the   boundaries   of   legality   or,   in   American  
administrative   law   in   particular,   not   to   exceed   their   powers   as   delegates.  
Administration  must  act  within  the  powers  vested  by  the  law.19  
   
The  Rule  of  Law    
 

                                                                                                               
18  RICHARD   B.   STEWART,   ADMINISTRATIVE  LAW  IN  THE  TWENTY-­‐FIRST  CENTURY,   78  

N.Y.U.  L.  Rev.  437  2003  

19  Carol   Harlow,   Global   Administrative   Law:   The   Quest   for   Principles   and   Values   ,   The  

European  Journal  of  International  Law  Vol.  17  no.1  ©  EJIL  2006  
  The   rule   of   law   normally   requires   that   the   government   acts   always   within   its  
powers;  follows  the  proper  procedures;  and  provides  equality  of  access  to  courts  
and  other  machinery  for  adjudication.    The  key  requirement  of  the  rule  of  law  is  
a  legal  order  with  fixed  and  stable  general  principles,  together  with  formal  rights  
of  access  to  courts  for  the  resolution  of  disputes.    
 
C)  CRIMINAL  LAW  
 
Criminal   law,   also   known   as   Penal   law,   is   the   law   under   which   the   state  
prosecutes   individuals   for   committing   a   crime.   Criminal   law   is   used   to   punish  
individuals   for   their   acts,   which   are   deemed   to   be   anti-­‐social   by   law.   Certain  
criminal  offences  may  also  be  committed  by  legal  persons.  
 
An   act   of   crime   must   be   expressly   described   and     certain   “penalty”   must   be  
provided  for  it  by  a  statute  .20  
 
There   can   be   no   crime   and   no   punishment     without   law/statute”   (kanunsuz  
suç   ve   ceza   olmaz,   Nulla  poena  sine  puts)è   for   the   stability   +   and   for   avoiding  
arbitrary  accusation  and  punishment.  
Parliament/TBMM   must   define   in   detail   è   every   crime   and   the   relevant   penalty  
in  the  statutory  law21  è  Interpretation  by  analogy  is  prohibited.  
 
German  Criminal  Law  of  28  June  1935  (RGBl.  I  838)  reads  as  :  “One  punishes,  who  
commits  an  act,  which  the  law  for  punishable  avowedly  or  which  earns  punishment  
after  the  basic  idea  of  the  penal  law  and  after  healthy  people  feeling.  If  no  certain  
penal  law  applies  direct  to  the  act,  then  the  act  is  punished  after   the   law,  whose  
basic  idea  to  it  best  applies  “1  
 
Analogical  interpretation  is  permitted  if  it  is  in  favor  of  the  defendant.  However,  
expanding  the  scope  of  the  criminal  statutes  by  way  of  interpretation  to  fill  the  
loopholes  of  law  is  not  permitted.    
 
 Categories  of  crimes:    
In  Turkish  Criminal  Law  there  exist  two  categories  of  criminal  offences:  felonies  
(cürüm)  and  misdemeanors  (kabahat).  

                                                                                                               
20  Kudret  Özersay,  Criminal  Law,  www.emu.edu.tr    

21  TCK   MADDE   2.   -­‐   (1)   Kanunun   açıkça   suç   saymadığı   bir   fiil   için   kimseye   ceza   verilemez  

ve  güvenlik  tedbiri  uygulanamaz.  Kanunda  yazılı  cezalardan  ve  güvenlik  tedbirlerinden  

başka  bir  ceza  ve  güvenlik  tedbirine  hükmolunamaz.  
(2)  İdarenin  düzenleyici  işlemleriyle  suç  ve  ceza  konulamaz.    
(3)  Kanunların  suç  ve  ceza  içeren  hükümlerinin  uygulanmasında  kıyas  yapılamaz.  Suç  ve  
ceza  içeren  hükümler,  kıyasa  yol  açacak  biçimde  geniş  yorumlanamaz.  
    
  
 
 
II)  AREAS  OF  PRIVATE  LAW    
 
Introduction  of  Western  Law  in  Turkey22    
 
Mustafa  Kemal  and  the  founders  of  the  Turkish  Republic  regarded  secularization  
as   an   uncompromising   principle.   In   1926   Turkish   government   introduced   new  
civil   and   criminal   codes   in   Turkey,   which   were   based   on   Western   models.  
Western   thought   had   earlier   influenced,   19th   century   Ottoman   law,   first   in   the  
mixed  commercial  courts  and  later  in  criminal  codes.  But  Western  jurisprudence  
had   hardly   challenged   the   Shari'a-­‐-­‐the   sacred   body   of   the   Islamic   law-­‐   in   its  
control   of   betrothal,   marriage,   divorce,   inheritance,   and   adoption.   Thus,   when  
the   Shari'a   courts   were   abolished   in   1924   and   the   entire   court   system   was  
transferred   to   the   Ministry   of   Justice,   the   whole   judiciary   became   legally  
independent   of   religious   control   for   the   first   time   in   Turkish   history.   The  
replacement   of   the   Shari'a   by   the   Swiss   civil   code   in   1926   abolished   the  
jurisdiction  of  Islamic  law  in  its  sacred  sphere  of  family  relations  and  brought  all  
legal   aspects   of   family   life   under   the   domain   of   secular   law.   In   addition   to   the  
new  civil  and  criminal  codes  of  1926,  committees  of  jurists  produced  new  codes  
of  obligation,  commerce,  maritime  law,  and  civil  and  criminal  procedure.  
 
A)  CIVIL  LAW  
 
Civil   law   covers   a   vast   area   of   relations   such   as   personality,   family   relations,  
rules   of   succession(inheritance)   property   rights,   and   law   of   obligations   ,   which  
are   all   sub-­‐branches   of   civil   law.23  Civil   law   in   Turkey   is   regulated   under   Turkish  
Civil  Code24.    
 
 
 
 

                                                                                                               
22  June  Starr  and  Jonathan  Pool,  The  Impact  of  a  Legal  Revolution  in  Rural  Turkey  Law  &  

Society  Review,  Vol.  8,  No.  4  (Summer,  1974),  pp.  533-­‐560  

http://www.jstor.org/stable/3052883  .    
23  Zeynep  Şişli,  Branches  Of  Private  Law,  

http://homes.ieu.edu.tr/~zsisli/BA100/Fundamentals%20of%20Law(4)-­‐2010.pdf    
24  A   code   is   presumed   to   be   coherent   in   the   sense   that   there   is   no   contradiction   between  

the  rules  contained  in  it,  that  each  rule  has  one  true  meaning,  and  that  it  provides  only  
one  right  answer  to  each  legal  question.  Other  characteristics  of  a  classical  code  include  
its  systematic  character  and  its  use  of  abstract  rules  and  concepts.  
 1) Law   o f   P ersons  
 
a)   P erson  
 
The   word   ‘‘person’’   is   derived   from   the   Latin   word   ‘‘persona’’   which   originally  
referred   to   a   mask   worn   by   a   human   who   was   conveying   a   particular   role   in   a  
play.   With   the   era   of   enlightenment,   and   the   rise   of   liberal   individualism   in  
Western  societies,  legal  system  has  abandoned  clan  or  family  responsibility,  and  
individuals   are   seen   as   primary   agents,   where   the   class   of   persons   coincide   with  
the  class  of  human  beings.25  
 
Person   may   be   defined   as   any   being   that   can   be   subject   of   legal   relations.  
Personality   is   the   aptitude   to   become   a   subject   of   rights   and   obligations.  
Personality,  however,  is  not  a  right  (subjective),  but  a  juridical  quality,  one  that  
constitutes   the   prerequisite   for   all   rights   and   duties;   it   is   equivalent   to   ‘legal  
capacity’.  
 
The   subdivision   of   the   category   “persons”   into   the   two   sub-­‐categories   of   “human  
beings”   and   “associations   of   human   beings”   is   a   nearly   universal   feature   of  
modern  civil-­‐law  doctrine.26  
 
b)   R eal   ( Natural)   P ersons   ( Gerçek   K işiler)   :    
 
The  ‘natural  person,’  sometimes  called  a  physical  person  (or  a  man  –  or  woman  –
,  a  human  entity,  a  human  being).  Every  real  person  is  the  holder  of  personality  
rights,   such   as   the   right   to   life,   the   right   to   own   property,   the   right   to   bodily  
integrity,  the  right  to  the  inviolability  and  integrity  of  personhood,  and  the  right  
to  the  respect  of  his  name,  reputation  and  privacy.  These  rights  are  inalienable.  
 
 
                                                                                                               
25  David  J.  Calverley,  Imagining  a  non-­‐biological  machine  as  a  legal  person,  AI  &  

Soc  (2008)  22:523–537  DOI  10.1007/s00146-­‐007-­‐0092-­‐7.  The  international  

“Great  Ape  Project”  seeks  to  imbue  non-­‐human  primates  with  attributes  of  legal  
personhood—specifically  “protections  of  the  right  to  life,  the  freedom  from  
arbitrary  deprivation  of  liberty,  and  protection  from  torture.”  The  Defense  
Advanced  Research  Projects  Agency  (DARPA)  is  pushing  the  limits  of  human-­‐
machine  interfaces  in  an  attempt  to  create  better  persons,  or  even  replacement  
“persons”  that  can  perform  jobs  in  lieu  of  human  beings.  One  might  easily  
imagine  the  creation  or  discovery,  in  the  near  future,  of  an  entity  that  is  of  equal  
moral  status  with  human  beings,  but  not  genetically  human.  Bkz.    Jessica  Berg,  Of  
Elephants  and  Embryos:  A  Proposed  Framework  for  Legal  Personhood,  HASTINGS  
LAW  JOURNAL,Vol.  59
26  J.-­‐R.  Trahan,  http://faculty.law.lsu.edu/jrtrahan/Persons/Supp/course_outline-­‐IV-­‐

rev.pdf    
  
 
 
i)  Legal  Capacity  (Hak  ehliyeti):    
 
Every   person   has   legal   capacity   to   acquire   rights   and   assume   obligations.   The  
legal   capacity   of   a   person   commences   from   the   moment   of   live   birth   and  
terminates  at  death.  Such  capacity  is  inherent  in  every  natural  person.    
 
ii)  Capacity  to  Act  (Fiil  ehliyeti)  :    
 
Capacity   to   Act   determines   whether   a   real   person   may   conclude   binding  
amendments  to  his/her  rights,  duties  and   obligations,   such   as   getting  married  or  
merging,   entering   into   contracts,   making   gifts,   or   writing   a   valid   will.   A   person  
who   has   full   capacity   to   act   has   the   capacity   to   create   rights   and   obligations  
through   his/her   actions.   Capacity   to   act   does   not   arise   with   birth,   but   will   unfold  
in   a   progressive   manner.   For   this   reason,   the   legal   system   has   established  
distinctive   norms   for   the   adult   and   the   juvenile.   The   law   distinguishes   majors  
and  minors  in  this  way  on  the  basis  of  eighteen  (18)  years.  
 
-­‐   Full   Capacity   (Tam   ehliyet):   A   person   who   is   at   the   age   of   majority   and   has  
capacity  to  consent  (power  of  discernment)    has  the  full  capacity  to  act  as  long  as  
he/she   is     not   interdicted   by   court.   A   person   is   at   the   age   of   majority   when  
he/she  has  reached  the  age  of  18.  
 
-­‐   Limited   Incapacity   (Limited   interdiction)   (Sınırlı   Ehliyetsiz):   Minors   or  
wards   of   court   with   the   capacity   to   consent   are   regarded   as   having   limited  
incapacity.   Persons   who   are   at   the   age   of   majority   may   be   made   ward   of   court  
and   accordingly   become   interdicted.   Interdiction   is   the   procedure   under   Civil  
Law  by  which  a  judge  appoints  a  guardian  to  handle  some  or  all  of  the  affairs  of  a  
person.   The   grounds   for   interdiction   are:   mental   illness,   infirmity,   prodigality,  
imprisonment  exceeding  1  year.  
The  rule  applicable  to  persons  with  limited  incapacity  is  that  a  contract  signed  by  
those  is  voidable  at  the  instance  of  the  legal  representative  of,  although  it  is  
binding  on  the  other  party.  They  may  assume  obligations  by  their  own  acts  only  
with  the  consent  of  their  legal  representatives.  Without  such  consent,  they  may  
acquire  only  benefits  which  are  free  of  charge.  They  are  liable  in  damages  for  the  
torts  they  commit.  
 
Where  one  of  the  parties  is  
incapable    of    giving    consent    to    a    contract,    the    contract  becomes  voidable  or  
annullable  even  though  there  was  no  damage  to  the  contracting  party.  The  
contracting  party  cannot  allege  the  incapacity  of  the  minor  with  whom  he/she  
contracted.  
 
-­‐   Full   Incapacity   (Tam  ehliyetsiz):   A   person   lacking   capacity   to   consent   cannot  
create  legal  effect  by  his  or  her  actions.  A  person  who  does  not  have  the  mental  
capacity   to   understand   the   consequences   of   a   transaction   to   be   entered   are  
regarded  as  totally  incapacitated.    
 
c)   L egal   P ersons   ( Tüzel   K işiler)    
 
 In  contrast  to  “natural  person,”  the  designation  “juridical/legal  person”  is  used  
to   refer   to   an   entity   that   is   not   a   human   being,   but   for   which   the   legal   system  
chooses   to   afford   some   of   the   same   legal   protections   and   rights   as   accorded  
natural  persons.27  Legal  system  accords  legal  capacity  to  acquire  rights  to  certain  
organizations,   deeming   them   to   be   subjects   of   the   law   as   “legal”   persons.   Legal  
person   is   separate   and   distinct   in   law   from   its   members.   It   is   an   independent  
legal   entity   with   the   capacity   to   act   and   can   thus   acquire   rights   and   create  
obligations  with  binding  effect.  In  reality,  the  legal  person  is  not  a  separate  entity  
besides  ‘its’  duties  and  rights,  but  only  their  personified  unity.28    
 
A   legal   person   is   either   an   organization   of   persons(e.g.:   associations,   companies)  
or   special-­‐purpose   fund   (e.g.   a   foundation)   that   is   recognized   by   law   as   having  
legal   personality.   It   differs   from   other   organisations   in   that   it   possesses   legal  
capacity  and  can  appear  before  the  courts  as  plaintiff  or  defendant.  (i.e.  capacity  
to   be   a   party   in   court).29     Legislature   has   broad   discretion   to   designate   legal  
persons    and  to  define  the  extent  of  their  powers  under  the  law.  
 
In  order  for  a  group  of  natural  persons  to  be  considered  as  a  legal  person,  some  
prerequisites   are:   organization  (a   legal   person   shall   be   organized   in   organs   for  
the   realization   of   its   purpose.   e.g.,   board   of   directors.   In   Turkish   Law   an  
association   needs   to   form   its   board   of   directors   and   general   assembly   to   be  
considered   as   a   legal   person.     The   foundations   are   only   required   to   form   their  
board   of   directors   and   thus   they   assume   legal   personality);   Perpetual   purpose  
(legal   persons   are   required   to   have   a   perpetual   purpose;   a   group   of   natural  
persons   targeting   a   one-­‐time   purpose   cannot   assume   personality);   Legal  
permission   (The   legislator   decides   which   group   of   natural   persons   will   be  
granted  a  legal  personality).      
The   legal   person   acts   through   its   organs   and   legal   representatives.   The   acts   of  
the   representative   –   provided   that   they   have   been   executed   in   the   name   of   the  
                                                                                                               
27  Jessica  Berg,  a.g.e.  

28  Hans  Kelsen,  GENERAL  THEORY  OF  LAW  &  STATE  (Anders  Wedberg  tr.  1945)  

29  http://www.eurofound.europa.eu/emire/GERMANY/LEGALPERSON-­‐DE.htm    
legal   person   and   within   the   power   of   representation   –   give   rights   and   obligate  
the  legal  person.  
 
 
 
i)  Public  law  legal  persons:    
 
In   public   law,   the   essential   legal   person   is   the   state.   According   to   the   Turkish  
Constitution  (art.  123)  a  public  law  legal  person  can  only  be  established  by  law  
or  by  the  authority  vested  by  law.  Local  administrative  bodies  (const.  art.  127),  
professional  organizations  (const.  art.  135)  such  as  Bar  association,  Chamber  of  
Commerce  and  Industry  are  public  law  persons  TRT  is  an  ‘impartial’  public  law  
person   (const.   art.   133)   and   universities   are   ‘scientifically   autonomous’   public  
law  legal  persons  (const.  art.  130).  
In   international   law,   various   organizations   possess   legal   personality   including  
inter-­‐governmental   organizations   such   as   United   Nations,   World   Bank,  
International  Monetary  Fund,  European  Council  etc.  
 
ii)  Private  law  legal  persons  :  
 
Both  foundations  and  associations  are  non-­‐profit  legal  persons  regulated  under  
the  Civil  Code.  Provisions  contained  in  the  Civil  Code  establish  the  general  
framework  for  associations  (dernek)  and  in  broader  terms  for  all  private  law  
legal  persons.  Some  associations  such  as  political  parties,  trade  unions  and  
sports  clubs,  have  been  subject  to  separate  legislation  due  to  their  special  field  of  
activity.  

Foundation  (Vakıf)  is  the  other  private  law  legal  person  regulated  under  Civil  
Code  and  it  is  regarded  as  a  fund  established  and  maintained  for  charitable,  
educational,  religious,  research,  or  other  benevolent  purposes.    

Both  in  foundations  and  associations,  the  purpose  must  not  be  contrary  to  law,  
public  policy  and  public  morals;  it  must  not  be  impossible  to  obtain.  

Companies   are   profit   seeking   private   legal   persons   regulated   under   the  
Commercial   Code.   According   to   Turkish   law   all   companies   regulated   under  
Commercial  Code  have  legal  personality  however  that  may  not  be  the  case  for  all  
jurisdictions.   In   some   countries   only   certain   types   of   companies   are   vested   in  
with   legal   personality.   In   Turkey,   Companies   acquire   legal   personality   upon  
registration  in  the  commercial  register.    
 
In  common  law  tradition  the  legal  personality  of  a  corporation  includes  five  legal  
rights:  the  right  to  a  common  treasury  or  chest  (  which  includes  the  right  to  own  
property)the  right  to  a  corporate  seal  (grants  the  legal  person  the  right  to  make  
and   sign   contracts)   the   right   to   sue   and   be   sued     the   right   to   hire   agents  
(employees)    the  right  to  make  by-­‐laws  (the  right  to  self-­‐governance,  a  display  of  
autonomy).   In   common   law,   a   corporation   sole   is   a   corporation   consisting   only  
one   single   member:   e.g.     The   Crown   in   commonwealth   realms.     A   corporation  
aggregate,  on  the  other  hand,  is  a  corporation  consisting  more  than  one  member.  
 
 
iii)  Effects  of  legal  personality  
 
-­‐ Distinct  patrimony    
-­‐ Procedural  capacity  
 

d)   D ifferences   b etween   N atural   a nd   L egal   P ersons  

 
i) Political   rights   (such   as   voting   or   holding   an   office)   are   possible   only   for  
natural   persons.   The   majority   of   civic   rights   (such   as   the   right   to   marry,  
divorce  or  the  right  to  legal  inheritance-­‐with  the  exception  of  the  State-­‐)  are  
also   only   applicable   to   natural   persons.   The   only   way   a   legal   person   can  
inherit  is  by  a  will.  

ii) The   right   to   usufruct   (intifa   hakkı)   also   differs   between   natural   and   legal  
persons.  While  natural  persons  may  enjoy  that  right  till  their  death-­‐provided  a  
shorter   term   for   enjoyment   is   not   agreed   upon-­‐,   for   legal   persons   the   time  
limit  for  enjoyment  is  set  at  100  years.    

2)   L aw   o f   P roperty  
 
Objects,   which   cannot   be   moved   from   one   place   to   another   and   are   fixed   in   their  
location,   such   as   land   and   independent   apartments   subject   to   Condominium30  
are   regarded   as   immovable   property.   Other   tangible   property   falls   under   the  
category   of   movables.   Rights   on   movables   and   immovable   are   referred   as   “real  
rights”  and  regulated  in  the  4th  book  of  Civil  Code.    
 
a)   P roperty   r ight   /   O wnership   ( Mülkiyet)  
 

                                                                                                               
30  Condominium  (Kat  mülkiyeti):  Each  of  the  individual  apartments  or  houses  in  

a  building  or  complex  containing  a  number  of  individually  owned  units.    

 
 
The   best   known   real   right   is   the   property   right   that   refers   to   ownership   of  
objects.   The   transfer   of   ownership   is   different   for   movables   and   immovables.  
Transfer  of  a  movable  property  requires    
the  agreement  of  the  parties  and  the  delivery  of  the  item  to  the  transferee.  The  
transfer  may  be  based  on  sale,  donation  or  performance  of  another  contract.    The  
transfer   of   a   movable   property   requires   the   mutual   intention   of   the   parties   to  
transfer  property  (and,  in  addition,  the  physical  transfer  of  the  goods).  
 
In   Turkish,   Swiss   and   German   law   the   contract   of   sale   does   not   transfer   movable  
property  but,  obliges  the  seller  to  physically  transfer  the  object  at  a  later  stage  as  
the  performance  of  the  contractual  duty.  The  same  is  true  for  contracts  such  as  
one  obliging  the  creation  of  a  pledge.  
 
The   transfer   of   an   immovable   may   be   only   made   through   an   official   contract  
before  the  land  register  authorities  and  the  entry  into  the  register.  Registration  is  
a  prerequisite  of  the  transfer  and  any  sort  of  contract  whatsoever  cannot  provide  
the  transfer  of  ownership  if  registration  is  not  completed.    

  b )   P ledge   ( rehin)     /   M ortgage   ( ipotek)  

 
Pledge   or   mortgage   establishes   a   real   right   in   the   property   in   order   to   provide  
security  for  the  performance  of  an  existing  or  future  debt.    
 
In   addition   to   a   agreement   between   the   parties,   pledge   of   a   movable   property  
requires  the  delivery  of  the  item  to  the  pledgee  until  the  owed  amount  is  paid.    
 
For   immovables,   the   term   “mortgage”   is   used.   An   immovable   property   may   be  
mortgaged   only   with   registration   in   the   land   register.   The   procedure   is   no  
different  than  transfer  of  ownership  and  upon  the  agreement  of  the  parties  the  
owner  provides  a  right  of  mortgage  by  way  of  registration.    
 
   
  
B)  LAW  OF  OBLIGATIONS  
 
The  law  of  obligations  is  a  concept  that  is  traditionally  associated  with  civil  law.  
Under  Turkish  Civil  Code,  the  Law  of  Obligations  (Borçlar  Hukuku/Schuldrecht)  
constitutes   the   5th     of   the   five   Books,   codified   under     a   separate   legislation  
namely  the  Turkish  Code  of  Obligations.  

1)   T he   T erm   “ Obligation”  
 
“An  obligation  is  a  legal  tie  which  binds  us  to  the  necessity  of  making  some  
performance  in  accordance  with  the  laws  of  our  state.”  (Inst.  3.13.pr)  
 
“The  essence  of  obligation  does  not  consist  in  that  it  makes  some  property  
or   a   servitude   ours,   but   that   binds   another   person   to   give,   do   or   perform  
something  for  us.”  Paul.  Inst.  Book  II  (D.44.7.3pr.)  
 
These   two   definitions   from   classical   Roman   law   emphasize   two   aspects   of   an  
obligation.  Firstly,  the  obligation  is  a  legal   tie   (vinculum   iuris)  between  creditor  
and   debtor   and   is   regarded   as   creating   a   relationship   between   the   parties.   The  
legal  effect  of  this  tie  concerns  only  the  parties  of  the  obligation  (obligor-­‐obligee)  
and   is   not   extended   to   third   parties   (although   there   are   few   exceptions   to   this  
principle:  e.g.  contracts  concluded  for  the  benefit  of  a  3rd  person).  
 
An  obligation  has  twofold  consequences;  a  duty  arises  on  the  part  of  the  person  
incurring  the  obligation,  and  there  is  a  corresponding  right  in  the  other  person  to  
enforce   that   duty   by   legal   action.   By   virtue   of   the   obligation   the   obligee   is  
entitled   to   demand   performance   from   the   obligor.   Performance   may   also   consist  
in  refraining  from  doing  something.  
 

2)   T he   S ource   o f   O bligations  
 
• Contract  (Sözleşme)  
• Tort  (Haksız  Fiil)  
• Unjust  enrichment  (Sebepsiz  Zenginleşme)  
 
The  Turkish  Code  of  Obligations  cites  three  main  sources  for  obligations:    
1-­‐Obligations  arising  from  contracts    
2-­‐Obligations  arising  from  delict/tort    
3-­‐Obligations  arising  from  unjust  enrichment  (which  is  actually  a  quasi-­‐contract-­‐
sözleşme  benzeri).  
Code   of   Obligations   (CO),   as   a   supplementary   part   of   the   Civil   Code,   provides   the  
main  legal  framework  for  contracts  and  torts.    
Provisions  of  CO  are  divided  into  two  parts:  General  Part  which  regulates  general  
principles   of   contracts   and   torts.   Special   Part   deals   with   specific   types   of  
contracts  e.g.:  sale  contract,  rental  contract,  service  contract.  
   
WEEK  5  
 
¢Explain contract and tort as sources of obligations
 

CONTRACT AND TORT

 
I)  LAW  OF  CONTRACTS  
”The  law  of  contract  is  to  a  large  extent  the  same  worldwide.  Certainly  the  rules  
governing   contracts   in   the   English-­‐speaking   world   differ   considerably   from  
those   of   the   Civil   Law   countries.”31  The   contract   law   is,   as   in   all   areas   of   the  
continental  Civil  Law,  based  mainly  on  the  tradition  of  Roman  Law.32    
A   contract   is   an   agreement   creating   legally   enforceable   obligations.   A   contract  
may   be   in   written,   oral   or   implied   form   unless   a   special   legal   form   is   required   by  
law.   However   verbal   agreements   can   turn   out   to   be   problematic   when   their  
proof  is  required.  
 
A)  PRINCIPLE  OF  FREEDOM  OF  CONTRACT  
 
The  economic  system  of  the  market  economy  rests  on  the  assumption  that  every  
citizen   is   best   qualified   to   determine   for   himself   whether   he   needs   supplies   or  
wishes  to  sell,  who  will  best  serve  his  needs  and  on  what  conditions.  If  all  these  
three   decisions   are   to   be   made   by   every   individual   for   himself,   he   must   be  
granted  freedom  of  contract  as  to  whether  at  all,  with  whom  and  on  what  terms  
he  wishes  to  contract.33  
Contract  law  is  based  on  the  principle  of  freedom  of  contract  as  developed  in  the  
seventeenth  and  eighteenth  centuries.  The  main  aspects  are:  
i)   Freedom   to   conclude   or   not   to   conclude   a   contract   and   freedom   of   choice   of  
the  partner.  
There   is   no   obligation   to   enter   into   a   contract   unless   a   special   legal   provision  
prescribes   the   formation   of   a   contract   (as   may   be   the   case   for   public  
transportation  and  other  public  services  or  in  the  context  of  antitrust  law).34  
ii)  Freedom  to  establish  the  content  of  the  contractual  provisions.  
                                                                                                               
31  Eugen  Bucher, Law  of  Contracts;  in:  "Introduction  to  Swiss  Law",  Edited  by  F.  

Dessemontet   &   T.   Ansay,   Second   Revised   Edition,   The   Hague   etc.  

(Kluwer/Schulthess)  1995,  S.  103-­‐124  
32  ibid.  

33  Ulrich  Drobnig,  General  Principles  of  European  Contract  Law,  Petar  Sarcevic  &  

Paul   Volken   eds.,   International   Sale   of   Goods:   Dubrovnik   Lectures,   Oceana  

(1986),  Ch.  9,  305-­‐332.  
34  Eugen  Bucher,  a.g.e.  
Parties  are  free  to  establish  the  conditions  of  the  contract.  This  refers  not  only  to  
the   possibility   of   the   parties   determining   their   mutual   obligations   but   also   to   the  
consequences  of  non-­‐performance  (e.g.  conditions  and  effects  of  breach,  etc.).    
iii)  Freedom  to  depart  from  the  types  of  contract  as  presented  in  the  special  part  
of  the  Code  of  Obligations.35  

 
B)  FORMATION  OF  CONTRACTS  
 
For  a  contract  to  be  valid,  certain  requisites  must  be  fulfilled.    
 

1)Valid   a greement      
 
The  well-­‐known  mechanism  of  offer  (icap)  and  acceptance  (kabul)  is  recognized  
everywhere   in   Europe. A   contract   requires   a   mutual   agreement   of   the   parties.  
This   agreement   may   be   either   explicit   (açık)   or   implicit   (örtülü).   There   is   an  
agreement  when  the  parties  lead  each  other  reasonably  to  believe  that  they  are  
of   the   same   mind   about   a   given   transaction   (Offer+Acceptance=Agreement-­‐
Consensus).  The  same  mind  of  parties  about  a  given  transaction,  is  reached  by  an  
offer   on   the   one   side,   and   the   apparent   acceptance   of   the   offer   on   the   part   of   the  
other.   The   offer   and   acceptance   formula,   developed   in   the   19th   century,  
identifies  a  moment  of  formation  when  the  parties  are  of  one  mind.  An  offer  as  
"an   expression   of   willingness   to   contract   on   certain   terms,   made   with   the  
intention  that  it  shall  become  binding  as  soon  as  it  is  accepted  by  the  person  to  
whom  it  is  addressed",  the  "offeree".36    
 
An  offer  is  a  statement  of  the  terms  on  which  the  offeror  is  willing  to  be  bound.  It  
is   the   contractual   intent   to   be   bound   by   a   contract   with   definite   and   certain  
terms   communicated   to   the   offeree.   The   communication   between   the   parties  
may   take   different   forms,   such   as   a   letter,   newspaper,   fax,   email   and   even  
conduct,  as  long  as  it  communicates  the  basis  on  which  the  offeror  is  prepared  to  
contract.37  For  an  offer  to  be  capable  of  becoming  binding  on  acceptance  must  be  
definite,   clear,   and   final.   If   it   is   a   nearly   preliminary   move   into   negotiation   which  
may  lead  to  a  contract,  it  is  not  an  offer  but  an  invitation  to  treat/offer.  An  offeror  
may   revoke   an   offer   before   it   has   been   accepted,   but   the   revocation   must   be  
communicated  to  the  offeree.  The  acceptance  must  be  communicated.  Exception  
to  this  rule  is  unilaterally  obliging  contracts  where  the  assent  of  the  non-­‐obliging  
party  may  be  deemed  to  exist.  An  offer  can  only  be  accepted  by  the  offeree,  that  

                                                                                                               
35  İbid.  

36  G.H.  Treitel,  The  Law  of  Contract,  10th  edn,    

37  http://en.wikipedia.org/wiki/Offer_and_acceptance    
is,   the   person   to   whom   the   offer   is   made.   An   offer   must   be   accepted   exactly,  
without  modifications;  any  change  the  offer  in  any  way,  is  a  counter-­‐offer.  38    
 
Since   the   basis   of   a   contract   is   the   exchange   of   assents,   it   is   essential   that   the  
assents  of  the  parties  be  genuine,  that  is  to  say  that  there  be  a  genuine  meeting  of  
the  minds.  Unintentional  differences  of  assent  may  be  due  to  several  causes  such  
as,  mistake(hata),    fraud(hile)  or  duress(tehdit).  
Two  types  of  Mistake  :  
-­‐  Immaterial(about  the  motives  for  entering  into  contract,  may  not  be  the  basis  
for  voiding  a  contract)(saik  hatası)  
-­‐  Material(error  in  object  or  in  person,  to  nature  of  the  transaction,  to  quantity,  to  
the  necessary  state  of  facts  of  a  contract).    
 

2)   C apacity   t o   c ontract    
 
The   legal   validity   of   a   contract   depends   on   the   full   capacity   of   the   real   person  
who  enters  into  the  transaction.  This  means  “capacity  to  act”  of  real  persons  or  
legal   persons.     Contracts   concluded   by   real   persons   of   full   incapacity   are   void  
with   no   legal   effect.     Contracts   made   by   real   persons   of   limited   capacity   are  
voidable.    
 

3)   L egality   o f   t he   s ubject   m atter      

 
If   the   subject   matter   of   the   contract   is   illegal   or   against   morals;   a   valid,  
enforceable   contract   does   not   exist.   For   example,   if   a   person   offers   to   pay  
another   person   money   for   illegal   drugs,   and   an   acceptance   is   made   by   a   promise  
to  deliver  the  illegal  drugs  this  is  nevertheless  a  void  contract.  
 

4)     L egal   f orm   ( if   r equired   b y   l aw)  

 
As  a  general  rule,  the  formation  of  a  contract  does  not  presuppose  formalities  of  
any   kind.   With   a   few   specific   exceptions,   contracts   may   be   concluded   orally   or  
even   without   any   verbal   expression   of   assent,   for   instance,   by   actions   implying  
viz.  showing  the  intention  to  enter  into  a  contract.  
 
The  main  exceptions  to  this  rule  of  absence  of  formal  requirements  are:    
 
-­‐     an   assignment   of   a   receivable   requires   a   written   document,   signed   by   the  
assignor  and  delivered  to  assignee  
                                                                                                               
38  http://en.wikipedia.org/wiki/Invitation_to_treat    
-­‐   the   contract   for   the   sale   of   land,   contracts   to   transfer   real   rights   in   land  
requires  official  form  to  be  concluded  before  land  register  authorities.    
-­‐   the  contract  of  suretyship  should  be  made  in  writing.      
-­‐     sale  of  motor  vehicles  requires  official  form  before  the  notary.  
 
 The  reasons  for  which  the  law  requires  them  are  various,  such  as  for  example,  to  
warn   the   parties   of   the   seriousness   and   importance   of   their   action   or   of   the  
consequences  of  the  contract.    
If  a  formal  requirement  as  established  by  legislation  has  not  been  complied,  the  
contract  is  void.    
 
C)  REPRESENTATION  (TEMSIL)  
 
Under   Civil   law,   the   basis   of   the   source   of   representative   authority,   may   be  
categorized  as  statutory  representation  and  contractual  representation(agency).  
In   statutory   representation,   representative   authority   delegated   by   law:   e.g.  
Guardian,   Parent   of   a   minor.   In   case   contractual   representation(agency),   the  
principal   and   the   agent   enter   into   a   contract   and   this   contract   determines   the  
scope  of  contractual  representation.    
   
In   general   modern   civil   law   fully   admits   the   possibility   of   concluding   contracts  
by  an  agent  or  a  statutory  representative.    A  contract  concluded  by  a  person  in  
the  name  of  another  is  valid,  if  the  latter  has  authorized  the  acting  person  to  do  
so.  An  'agency  by  appearance'  can  only  be  admitted  under  special  circumstances,  
i.e.   if   the   represented   person   himself   has   created   said   appearance   or   tolerated  
others   creating   it.   A   subsequent   ratification   of   the   conclusion   of   the   contract  
equals  a  preliminary  authorization.    
 
In   the   absence   of   a   preliminary   authorization   or   subsequent   ratification   the  
contract   is   void   and   the   person   wrongly   alleging   to   be   authorized   is   liable   in  
damages  to  the  other  contracting  party.  
 
The   power   of   representation   given   to   the   contractual   agent   may   be   revoked   at  
any  moment,  and  an  obligation  not  to  retract  authorization  would  not  be  valid.  
 
D)  CLASSIFICATION  OF  CONTRACTS,  IN  TERMS  OF  THE  DEGREE  OF  THEIR  
ENFORCEABILITY  
 
-­‐ Valid  Contracts,  
-­‐ Void  Contracts,  
-­‐ Voidable  Contracts.  
 
1)   V oid   ( Null)   c ontracts  
   
Void   contracts   are   those   which   have   no   legal   effect   either;   because   they   are  
against  law  and  morals,  because  of  incapacity,  lack  of  formality  or  impossibility.  
 

2) Voidable   c ontracts  
 
Voidable   contracts   may   be   rejected   at   the   option   of   one   or   both   of   the   parties,  
due   to   the   lack   of   one   or   more   of   the   elements   of   a   valid   contract.   Voidable  
contracts  are  valid  until  declared  void.  Contracts  made  by  mistake  are  generally  
considered  voidable  according  to  Code  of  Obligations.  The  validity  of  a  voidable  
contract  may  only  be  challenged  by  an  interested  party.    
 
E)  TERMINATION  OF  CONTRACTS  
 
-­‐ By  fulfillment  of  the  obligations  of  the  parties  to  each  other.  Performance  
(ifa)  can  be  either  specific  (aynen  ifa)  or  as  a  compensation  (nakdi  ifa).  

-­‐ By  an  agreement,  (release  or  novation-­‐tecdit).  

-­‐ By  becoming  impossible  of  the  subject  matter  due  to  the  circumstances  
beyond  the  control  of  the  parties.  .  

-­‐ By  statute  of  limitations.(zaman  aşımı)  

-­‐ Due  to  the  breach  of  a  party  for  the  reason  that,  the  other  party  fails  to  
fulfill  his  obligation  properly.  
 
II)  TORT  
 
A   tort   [haksız   fiil]   is   a   civil   wrong   that   causes   injury   to   another   person   or  
his/her/its  property.  It  is  a  negligent  or  intentional  harmful  act,  which  does  not  
arise  out  of  a  contract  or  statute.  For  example,  when  someone  commits  a  crime,  
e.g.,  assault,  he  or  she  is  punishable  under  criminal  law,  but  the  victim  may  also  
seek   financial   compensation   from   the   tortfeasor,   i.e.,   the   one   who   committed   the  
tort,  for  the  injury  suffered.39  
 
General   Part   of   CoO   provides   the   general   framework   for   tortious   liability.  
However   specific   legislation   exists   in   different   areas,   dealing   with   particular  
types  of  damages.  :e.g.  Motor  Vehicle  Act.  
 
                                                                                                               
39  Vivek  Pande,  BLAW  Course  Outline  
  
A)  ELEMENTS  OF  AN  ACTION  IN  TORT    
 
Under   Turkish   Code   of   Obligations,   in   an   action   in   tort   the   Plaintiff   must  
establish  that;    
 

1) Unlawful   a ct  
 
The  act  may  also  be  in  the  from  of  an  an  omission,  e.g.,  a  driver  who  causes  an  
accident  by  not  paying  attention  to  the  road.  
A  tortfeasor  may  raise  certain  defences  which  cure  the  illegality  of  the  act:  
§ the  consent  of  the  injured  victim,  e.g.,  a  patient’s  consent  to  surgery,  
boxing  game  
§ legitimate  self-­‐defense  [meşru  müdafaa],  e.g.,  hitting  an  attacker  
§ necessity  (ızrar  hali),  e.g.,  to  avoid  striking  a  child,  a  motorist  crashes  
through  a  fence  
§ fulfillment  of  a  duty  imposed  by  law,  e.g.,  surgeon  operates  on  an  
unconscious  accident  victim,  arrest  of  a  person  upon  court  order.  
 

2) Negligence   o f   t he   t ortfeasor  
 
Negligence  may  be  be  proved  by  showing  that  the  tortfeasor;  
§ acted  with  intent  [kasıt],  i.e.,  deliberately  and  not  by  mistake  
§ acted  with  negligence  [ihmal],  i.e.,  failed  to  exercise  reasonable  care  
contributory  fault  is  a  full  or  partial  defense  to  negligence,  e.g.,  
tortfeasor  hits  a  pedestrian  who  is  sleepwalking  on  a  dark  road.  
 

3) Damages  
 
The  tortfeasor’s  unlawful  act  should    result  in  damages  [zarar]  
Damages  may  include  
§ actual  losses  (damnum  emergens-­‐  fiili  zarar)  
§ lost  profits  and  earnings  (lucrum  cessans-­‐  mahrum  kalınan  kar)  
§ pain,  suffering,  grief,  emotional  distress,  etc.  (manevi  zarar)  
 
Vicarious  Liability  [vekalet  nitelikli  sorumluluk]  may  be  imposed,  i.e.,  
damages  are  also  sought  from  someone  other  than  the  tortfeasor,  e.g.,  
employers  are  usually  liable  for  the  torts  of  their  employees  committed  
during  the  scope  of  their  employment.  
 
 joint  and  several  liability  [müteselsil  sorumluluk]:    may  be  imposed,  i.e.,  
damages  are  sought  from  many  tortfeasors  who  collaborate  to  commit  the  
act.  are    at  fault  
§ the  victim  may  choose  to  recover  the  entire  amount  of  damages  from  
some  or  all  of  the  tortfeasors  
§ any  tortfeasor  who  pays  damages  has  the  right  to  seek  proportional  
reimbursement  from  non-­‐paying  tortfeasors    

4) Proximate   C ausation  
 
The  damages  must  be  CAUSED,  i.e.,  resulted  from,  the  tortfeasor’s  
unlawful  act.  There  must  be  Proximate  Causation  [uygun  illiyet  bağı],  i.e.,  a  
logical  relationship  between  the  unlawful  act  and  the  damages,  taking  
into  consideration  the  ordinary  course  of  events  and  life  experiences  
§ adequate  causation  does  not  exist  if  there  is  an  Intervening  Cause,  
i.e.,  some  other  act  or  condition  that  causes  injury  to  the  victim  after  
the  tort  has  been  committed  
 
 
B)  STRICT  LIABILITY  
 
The  law  of  non-­‐contractual  liability  is  founded  on  individual  wrongful  behaviour.  
Thus  general  principle  is  the  Negligence  liability.    
 
• Negligence  liability  (İhmal-­‐Kusur  Sorumluluğu)  –  a  duty  to  compensate  if  
the  damage  was  caused  through  a  negligent  behaviour  
 
Strict  liability  (Kusursuz  Sorumluluk)  –  compensation  duty  for  all  damages  
caused  without  need  to  prove  negligence.  Strict  liability  regimes  may  be  
stipulated  in  different  specific  legislation  (for  instance  environmental  
damages).  Strict  liability  entails  that  the  defendant  must  pay  for  damages  
resulting  for  the  activity  for  which  he/she  is  strictly  liable,  i.e.:  nuclear  
plant  or  ,  liability  imposed  on  a  business  for  manufacturing  a  defective  
product  that  causes  injury.  
 
 
   
   
WEEK  6    
¢Explain difference between personal and real security
¢Explain types of personal and real security
 

SECURITY CONTRACTS
 
The   main   problem   that   can   arise   from   an   obligation   on   behalf   of   the  
creditor  is  the  debtor’s  failure  to  perform  his/her  duty.  The  creditor’s  historical  
need  for  a  security  against  this  probability  of  non-­‐performance  is  the  idea  behind  
the   introduction   of   the   legal   institution   of   security.   Where   someone   incurs   a  
contractual   obligation   towards   another,   it   is   only   natural   that   he   will   often   be  
asked  by  his  new  creditor  to  promise  some  kind  of  penalty  or  guarantee  in  case  
of  non-­‐fullfillment.  The  creditor  will  normally  try  to  minimize  the  risk  of  losing  
out  in  one  of  two  ways:  he  can  either  ask  to  be  allocated  a  specific  item  belonging  
to   the   debtor   (or   a   third   party)   from   which   he   will,   in   case   of   default   or   non-­‐
performance,   be   able   to   obtain   satisfaction;   or   he   may   ask   another   party   (or  
parties)   to   guarantee   fulfillment   of   the   principal   obligation.   In   another   words,   he  
will  try  to  secure  his  position  either  by  way  of  a  real  right  (ownership,  right  of  
pledge,   mortgage)   or   by   actions   in   personam   against   one   or   more   additional  
debtors  (personal  security).  
Thus;   starting   from   the   ancient   times   of   Roman   law,   we   can   observe   two   main  
types   of   securities:   in  personam-­‐personal   (şahsi)   and   in  rem-­‐real   (ayni).     The   in  
personam   securities   creates   rights   which   can   only   be   asserted   against   persons  
while   in   rem   securities   creates   rights   which   can   be   asserted   against   any   third  
person.  
 
I) PERSONAL  SECURITIES  
 
A   personal   security   can   be   given   in   the   type   of   suretyship   (kefalet),   guarantee  
(garanti)or  by  assuming  the  obligation  as  a  co-­‐debtor.  
 
A) SURETYSHİP  (KEFALET)    
 
Traditionally   the   most   important   type   of   personal   security   is   the   contract   of  
suretyship  where  the  surety  (kefil)  binds  himself  to  the  creditor  of  a  third  party  
to  be  responsible  for  the  fullfilment  of  the  obligation  of  that  third  party.    
n Suretyship  is  a  unilateral  contract  (tek  taraflı  sözleşme)  in  the  sense  that  
only   the   surety   promises   to   perform   without   receiving   any   promise   of  
performance  of  the  other  party.  
 n The   parties   of   the   suretyship   contract   are   the   creditor   and   the   surety  
(kefil).   The   principal   debtor   is   not   a   party;   furthermore,   his   consent   is   not  
even  necessary  for  the  conclusion  of  a  suretyship  contract.  
n However,   notwithstanding   the   fact   that   the   suretyship   contract   is   a  
surety’s   own   separate   contract   with   the   creditor,   its   validity   is   still   tied   to  
the   validity   of   the   principal   obligation   that   the   surety   is   backing   up.   In  
another   words;   the   extent   of   the   principal   obligation   at   any   time  
determines   the   obligation   of   the   surety.   This   is   the   indication   of   the  
‘accessory   nature’   of   the   suretyship   contract.   The   fate   of   a   suretyship  
contract   is   dependant   to   the   primary   obligation’s   fate   meaning   that   when  
the   primary   obligation   is   extinguished   (for   whatever   reason),   the  
accessory  obligation  (suretyship)  is  also  extinguished  with  it.  
n Another   effect   of   the   ‘accesory   nature’   (feri   niteliği)   of   the   surety’s  
obligation   is   that   its   performance   cannot   be   requested   unless   the  
principal  obligation  has  become  mature  or  enforceable.  
 

1)   R equisites   f or   a   V alid   S uretyship  

 

  a)   A   P rimary   O bligation    
  A  legally  valid  suretyship  requires  the  existence  of  a  principal  obligation  
although   it   is   not   essential   that   the   principal   obligation   should   exist   when   the  
contract   is   formed.   The   payment   of   a   future   or   conditional   debt   may   also   be  
undertaken  by  the  surety.  
  As  mentioned  earlier,  the  fate  of  the  surety  contract  hinges  upon  the  fate  
of  the  primary  obligation,  therefore,  if  the  principal  obligation  is  a)void  because  
of   the   fact   that   the   contract   it   derives   from   contain   provisions   that   are  
impossible,   illegal   or   contrary   to   public   morals   or   b)void   by   reason   of   the  
incapacity   of   the   principal   debtor   or   c)voidable   by   reason   of   mistake-­‐duress-­‐
fraud  in  the  formation  of  the  contract  it  derives  from  and  the  debtor  rescinds  the  
contract,  then  the    suretyship  is  unenforceable  as  well.  The  only  exception  to  this  
rule   is   the   case   where   the   surety   undertakes   an   obligation   knowing   that   it   arises  
from   a   contract   which   is   void   against   the   principal   debtor   due   to   mistake   or  
incapacity.  In  such  a  case,  the  surety  will  be  held  liable  regardless.  
 

b)   C apacity   o f   t he   S urety  
  Persons  who  have  a  full  contractual  capacity  are  able  to  give  securities  by  
entering   into   contracts   of   surety.   An   appointed   representative   of   a   person  
without  a  legal  capacity  cannot  enter  into  a  surety  contract  for  the  name  of  the  
person  under  representation.  
 
     c )   F orm   R equirement  
  A   surety   contract   must   be   in   writing   in   order   to   be   deemed   as   valid.   A  
valid   suretyship   contract   must   also   include   a   declaration   of   intent   to   create   a  
suretyship   and   the   maximum   amount   of   suretyship   liability.   The   surety,   the  
creditor   and   the   principal   obligation   must   also   be   indentified   within   the  
suretyship  contract.  
 

2)   T ypes   o f   S uretyship  
 

a) Ordinary   S uretyship   ( Adi   K efalet)  

 
When   the   promise   of   the   surety   is   entirely   collateral   to   the   principal  
obligation,   there   is   an   ordinary   suretyship.   Being   entirely   collateral   to   the  
principal   obligation   means   that:   the   creditor   must   first   resort   to   the   principal  
debtor   before   turning   to   the   surety.   The   creditor   can   only   demand   satisfaction  
from   the   surety   unless   he   has   made   a   reasonable   effort   to   exhaust   proper  
remedies  against  the  principal  debtor.  
If   there   is   also   a   real   security   involved   in   securing   the   principal   obligation  
then   the   sequence   of   the   securities   given   (real   and   personal)   becomes   of  
importance.      When  a  real  security  is  created  before  the  date  of  the  suretyship  or  
concurrently   with   it   then   the   creditor   shall   have   recourse   first   to   the   real  
security.     Even   when   the   real   security   is   provided   after   the   creation   of   the  
suretyship,   the   surety   can   still   demand   that   the   creditor   first   have   recourse   to  
real  security.  
   

b) Joint   S uretyship   ( Müteselsil   K efalet)  

If  a  surety  promises  a  joint  surety  or  as  a  co-­‐debtor  or  by  similar  expressions,  the  
creditor   may   have   recourse   against   the   surety   before   the   principal   debtor   and  
before   foreclosure   of   securities.     (Being   under   a   joint   obligation   (müteselsil  borç)  
means   that   all   the   debtors-­‐in   this   case   the   primary   debtor   and   the   surety-­‐   are  
each   liable   up   to   the   full   amount   of   the   relevant   obligation.   The   creditor   can  
resort   to   any   debtor   for   the   total   debt.   When   one   debtor   satisfies   the   creditor  
then   the   obligation   chain   between   the   debtors   and   the   creditor   is   solved   and   the  
debtor  that  performed  the  debt  can  recourse  to  the  other  debtor-­‐or  debtors-­‐  for  
his  satisfaction  within  the  frame  of  the  debtors’  internal  relationship.  To  be  more  
precise:   in   a   joint   suretyship,   the   creditor   has   the   option   to   initially   resort   to  
either  the  surety  or  the  principal  debtor.)  
In  contracts  that  fall  within  the  scope  of  the  law  of  obligations,  the  agreement  on  
a   joint   suretyship   must   be   expressed   explicitly.   However   in   commercial  
obligations   governed   by   the   commercial   code   unless   contrary   stated   in   the  
contract,  the  suretyship  created  is  of  a  joint  nature.  (-­‐presumption  of  solidarity)  
  

c)   C o-­‐suretyships   ( Toplu   K efalet)      

Several   sureties   who   jointly   undertook   the   performance   of   the   same   divisible  
claim   are   liable   for   their   part   as   ordinary   sureties   and   for   the   parts   of   the   others  
as  secondary  sureties.  
 
 

3) Effects   o f   S uretyship  
 
n The  surety  is  only  liable  to  the  extent  of  the  maximum  amount  stated  in  
the   surety   contract   including   the   amount   brought   about   by   the   legal  
consequences  of  the  debtor’s  non-­‐performance  or  improper  performance  
or  default.  
n The   surety   is   entitled   and   obliged   to   bring   forward   against   the   creditor  
the  defenses  and  exceptions  to  which  the  principal  debtor  is  entitled  even  
if   the   principal   debtor   opts   to   waive   them.   The   surety   can   assert   the  
principal   obligation   is   not   binding   on   the   grounds   that:   a)   the   principal  
debtor   lacks   the   capacity   b)the   collection   of   the   principal   debt   is   barred  
by   lapse   of   time   (zamanaşımı)   c)the   principal   obligation   has   already   been  
discharged.  The  surety  has  also  the  right  to  assert  defenses  arising  from  
the  contract  of  suretyship  such  as  that  the  surety  contract  is  not  valid  or  is  
already   terminated.   In   ordinary   suretyship,   as   mentioned   above,   the  
surety   has   also   the   right   to   demand   that   the   creditor   first   resort   to   the  
principal   debtor   for   performance   or   first   have   recourse   to   the   pledge   (if  
there  is  one).  A  Surety  cannot  argue  the  insolvency  of  the  principal  debtor  
as  a  defense  against  the  creditor.  
n Proceedings  to  collect  the  principal  debt  cannot  be  instituted  against  the  
surety   before   the   fixed   date   of   payment   even   if   the   principal   debtor   has  
become  bankrupt.  
n A   creditor   who   has   been   satisfied   by   a   surety   is   under   the   obligation   to  
hand   in   to   the   surety   the   documents   needed   for   the   enforcement   of   his  
rights  and  deliver  the  securities  created  for  the  principal  debt.          
n If   the   surety   pays   in   part   or   all   of   the   principal   debt,   he   must   notify   the  
principal   debtor   thereof.   Provided   he   fails   to   do   so   and   the   principal  
debtor   also   pays   the   creditor   bona   fide   (in   good   faith),   the   surety   is  
deemed   to   forfeit   his   right   of   recourse   against   him.   In   such   a   case,   the  
surety   may   bring   an   action   of   unjustified   enrichment   (condictio  indebiti)  
against  the  creditor  since  the  creditor  has  been  enriched  in  expense  of  the  
surety   unjustified.   (The   initial   execution   of   the   principal   obligation   by   the  
principal   debtor   abrogates   the   causa   of   this   successive   performance   by  
the  surety.)      
 n A   surety   is   released   by   the   extinction   of   the   principal   debt   in   whatever  
way  it  occurs.  There  are  also  other  grounds  for  termination  of  a  contract  
of  suretyship  which  originate  from  the  contract  of  suretyship  itself.    
 
B)  GUARANTEES  (GARANTI)  
A  guarantee  is  a  contract  that  some  particular  performance  will  be  undertaken  as  
agreed  regardless  of  the  existence  of  a  prior  or  principal  obligation.  
 

1)   P ure   G uarantees  
A  pure  guarantee  is  utilized  primarily  for  guaranteeing  the  losses  of  an  investor  
or  assuring  him  a  fixed  ratio  of  profit  in  the  course  of  his  business  regarding  his  
enterprise.  Pure  guarantees  do  not  benefit  from  special  legal  provisions  and  are  
governed  by  the  general  conditions  applicable  to  all  contracts.  
 

2)   C ollateral   G uarantees  
Collateral   guarantee   is   a   contract   that   requires   the   existence   of   a   primary  
obligation   and   by   which   the   guarantor   undertakes   to   compensate   the   creditor   in  
case  the  primary  debtor  fails  to  perform  his  obligation.      
The   main   difference   between   a   surety   and   a   collateral   guarantee   is   that   the  
surety   creates   an   accessory   obligation   and   therefore   is   not   binding   where   the  
principal   obligation   is   not   valid   whereas   the   collateral   guarantee   is   an  
independent   contract   which   creates   a   primary   obligation   free   from   the   faith   of  
the  obligation  it  is  created  to  back  up.  Another  important  distinction  is  that  the  
surety   contract   must   be   in   writing   to   be   deemed   as   valid   while   there   is   no  
requirement  of  such  for  the  validity  of  the  collateral  guarantee.  
Collateral   guarantees   are   usually   utilized   by   banks   in   the   form   of   letters   of  
guarantees.  A  contract  of  guarantee  by  a  bank  must  meet  the  following  criteria:    
n The   bank   shall   assume   totally   or   partially   the   risk   that   the   beneficiary  
may  face  
n The   contract   shall   contain   clauses   that   stipulate   an   independent  
undertaking  whereby  the  bank  is  the  principal  debtor  
n The   contract   shall   include   clauses   regarding   the   acceptance   of   the  
punctual  payment  of  a  due  debt  without  any  prior  notice  or  action  against  
the  primary  debtor  whose  performance  is  guaranteed  
 
Unless  there  is  a  contract  of  counter-­‐guarantee,   a   guarantor   is   not   entitled   to   a  
right  of  recourse  against  the  debtor  whose  performance  was  guaranteed.  
 
C-­‐  BILLS  OF  EXCHANGE  GUARANTEES  (AVALS)        
 
An   Aval   guarantees,   wholly   or   partially,   the   payment   of   the   amount   of   a   Bill   of  
Exchange   (Poliçe).   This   guarantee   can   be   given   by   a   third   person   as   well   as   a  
person  whose  signature  already  appears  on  the  bill.  An  aval   must  be  in  writing-­‐
attached   to   the   Bill   of   Exchange-­‐expressed   by   the   words   ‘it   is   for   aval’   or  
equivalent-­‐signed  by  the  guarantor.  
When  the  guarantor  pays  the  bill,  he  consequently  acquires  all  rights  attaching  to  
the  bill  against  the  person  guaranteed  and  against  the  others  who  are  liable  on  
the  bill  to  that  person.  
 
 
II)  REAL  SECURITIES  
 
In   today’s   world,   creditors   usually   prefer   real   security   over   personal  
security.   It   provides   them   with   assets   of   a   rather   stable   value   which   can   be  
converted  to  cash  (by  realization  of  the  property)  even  in  the  event  of  insolvency  
and   it   excludes   the   risk   of   a   (second)   lawsuit   against   the   surety   (who   may   be  
unwilling  to  pay),  or  being  faced  with  his  financial  collapse  too,  hence  the  Roman  
legal   expression:   –Plus   cautionis   in   re   est   quam   in   persona   (goods   are   better  
sureties  than  the  debtor’s  person)-­‐.    It  is  not  wrong  to  say  that  this  statement  is  a  
fair  reflection  of  the  modern  trend  in  commercial  life.  
The  classification  of  real  property  takes  into  consideration  the  nature  of  
the   property   in   question.   Therefore   we   can   talk   about   two   categories   of   real  
security:   Real   security   over   immovable   property   (taşınmaz   eşya)   and   Real  
security  over  movable  property  (taşınır  eşya).  
 
A) REAL  SECURITY  OVER  IMMOVABLE  PROPERTY    
 
The   most   common   type   of   real   security   over   immovable   property   is   mortgage  
(ipotek).   Apart   from   mortgage   as   a   real   security   there   is   also   the   mortgage  
certification   (ipotekli  borç  senedi)   and   the   land   charge   notes   (irat  senedi),   both   of  
which   are   scarce   in   practice.   Unlike   mortgage,   mortgage   certificates   and   land  
charge   notes   are   freely   transferable   negotiable   instruments   (kıymetli   evrak)  
issued  to  the  order  (namına)  of  the  creditor  or  to  the  bearer  (hamiline)  without  
specifying  the  basis  of  liability  although  the  mortgagor  retains  the  liability  for  the  
secured  debt  of  both  the  mortgage  certificates  and  land  charge  notes.  
 

1) Mortgage   ( İpotek)  
 
The  most  important  aspect  of  mortgage  is  that  it  creates  a  real  right  over  
the  mortgaged  property  on  behalf  of  the  creditor.  This  real  right  is  accessory  to  
the   debt   secured   thereby   and   consequently   the   validity   of   a   mortgage   requires  
the   existence   of   a   valid   debt   although   it   is   not   essential   that   such   a   debt   shall  
exist   at   the   time   of   the   formation   of   contract   since   legally   a   mortgage   can   be  
created   for   the   purpose   of   securing   a   future   or   conditional   debt   provided   it  
becomes   effective   at   the   time   of   the   enforcement   of   the   right   of   the   creditor  
against  the  mortgagor.  
 
Effects  of  Mortgage  
n A  mortgage  can  be  created  for  a  single  debt  as  well  as  for  several  debts  on  
the   same   property   to   the   extent   that   this   does   not   impose   any   unlawful  
restriction  on  the  prospective  economic  activity  of  the  mortgagor.  
n A   mortgage   can   be   created   on   immovable   property.   Here,   the   term  
immovable   property   includes   land,   alienable   personal   servitudes   that   can  
be   entered   in   to   the   Land   registry   (tapu  sicili)   as   immovable   properties,  
independent   parts   of   a   building   subject   to   flat   ownership   and   shares   of  
co-­‐owners  of  land.  
n A   mortgage   property   can   belong   to   the   debtor   or   a   third   person   who  
secures  the  debt  in  favor  of  the  debtor.  As  stated  above,  a  mortgage  (being  
a   real   security)   does   not   create   a   personal   liability   on   the   owner   of   the  
real   property,   the   liability   does   not   extend   outside   the   mortgaged  
property.  
n A  mortgage  on  a  property  includes  all  its  integral  parts  (mütemmim  cüz)  
and   accessories   (teferruat)   (f.e.   a   mortgage   created   on   a   piece   of   land   will  
cover  all  the  buildings  and  trees  on  that  land)  
n A  mortgage  will  only  be  effective  once  it  is  recorded  in  the  Land  register.  
The  prerequisite  for  the  registration  of  a  mortgage  is  a  contract  between  
the   creditor   and   the   mortgagor.   This   contract   does   not   create   the  
mortgage  but  conveys  the  right  and  obligation  to  record  the  mortgage  in  
the  Land  register.  
n The   owner   of   the   mortgaged   property   can   create   further   mortgages   on  
the   same   property.   However,   the   amount   realized   on   the   sale   of   the  
property  will  be  disbursed  to  the  creditors  in  their  order  of  priority  which  
will   be   determined   in   accordance   with   the   principles   of   ‘fixed   ranks’  
system.   The   ‘fixed   ranks’   system   ensures   the   mortgages   on   the   same  
property  to  acquire  an  order  of  priority  according  to  the  rank  of  the  place  
in  which  they  are  registered  in  the  Land  register.    
n If  the  debtor  fails  to  pay  his  debt  the  creditor  can  demand  the  sale  of  the  
property  under  mortgage.  There  is  no  statute  of  limitations  for  an  action  
on   a   debt   secured   by   a   mortgage.   Any   agreement   made   before   the  
maturity   of   the   mortgage   debt   and   providing   that   the   creditor   will  
become   the   ipso  iure   owner   of   the   mortgaged   property   is   null   and   void.  
(This  universal  principle  is  called  the  lex  commisoria  prohibiton)  
n Foreclosure   proceedings   begin   with   the   request   of   the   creditor.   The  
execution   office   will   sell   the   property   and   distribute   the  proceeds   of   the  
 sale   among   the   secured   creditors   in   accordance   with   their   order   of  
priority.  
 B)  REAL  SECURITY  O VER  MOVABLES  
The   creation   of   pledge   (pignus-­‐rehin)   provides   a   contractual   security   in  
rem  over  movable  property,  claims  and  other  assignable  rights.  
 

1)   P ledges  

a) Pledges   o n   M ovables   ( Taşınır   R ehni)  

 
Movable  properties  can  be  given  in  pledge  only  by  the  delivery  of  possession  of  
the  movable  property  to  the  pledgee  (which  does  not  necessarily  mean  that  the  
delivery   of   the   movable   should   be   by   hand;   the   delivery   of   the   possession   can   be  
in  direct  or  indirect  ways  as  well,  such  as  handing  in  the  keys  of  the  -­‐pledged  to  
be-­‐  car  or  the  key  of  a  warehouse  where  the  immovable  to  be  pledged  is  placed).  
n The  main  distinction  between  a  pledge  and  a  mortgage  is  that  there  can  
be   no   case   of   lapse   of   time   for   the   former.     A   creditor   can   enforce   his  
rights  under  a  pledge  regardless  of  the  fact  that  he  can  enforce  his  original  
claim  or  not.  
n A   pledge   on   assignable   claims   and   other   rights   are   possible   as   long   as   the  
pledge  is  created  by  an  agreement  in  writing.  
n Negotiable   instruments   to   bearer   can   also   be   pledged   since   they   are  
regarded  as  immovable  property.  
 

b) Ships   a nd   A ircrafts  
 
Notwithstanding   the   fact   that   ships   and   aircrafts   are   immovable   properties,   they  
are  subject  to  mortgage  not  pledge.  Mortgages  on  ships  shall  be  registered  with  
the  Ship  Registry  (gemi  sicili)  whereas  mortgages  on  aircrafts  shall  be  recorded  
with  the  Civil  Aviation  Registry  (Sivil  Havacılık  Sicili).  
   
WEEK  7-­‐8  
 
¢Explain general principles governing international sales
¢Explain the general structure of CISG
¢Familiarize with common clauses in sales contracts

 
 

LAW OF SALES CONTRACTS

 
I) SALES  CONTRACTS  ıN  GENERAL  
 
Undoubtedly,   one   of   the   most   common   commercial   transactions   is   the   contract  
for   the   sale   of   personal   property.   A   contract   of   sale   is   an   agreement   on   an  
exchange   of   goods,   services   or   property   to   be   exchanged   from   seller   (or   vendor)  
to   buyer   (or   purchaser)   for   an   agreed   upon   value   in   money   (or   money  
equivalent)  paid  or  the  promise  to  pay  same.  In  most  civil  law  jurisdictions40  the  
conclusion   of   the   sales   contract   does   not   mean   that   the   ownership   right   over  
goods   in   exchange   has   been   transferred.   The   conclusion   of   the   sales   contract  
only  ascribe  certain  duties  and  obligations  on  both  parties:    -­‐the  obligation  to  the  
transfer  of  ownership  on  the  vendor  and  the  obligation  to  pay  a  certain  sum  of  
money   (or   money   equivalent)   on   the   buyer-­‐.   Therefore,   the   conclusion   of   a   sales  
contract  is  not  enough  for  the  transfer  of  the  subject-­‐matter  of  the  contract  but  
an  act  of  delivery  on  vendor’s  side  is  also  required.  If  a  movable  property  (res)  is  
to  be  sold,  than  after  the  signing  of  the  contract  the  vendor  is  obliged  to  deliver  
the  possesion  of  the  property  to  the  buyer.  This  can  be  done  by  either  an  actual  
delivery  of  the  property  (f.e.  by  handing  it  in)  or  by  the  indirect  transfer  of  the  
possesion   (such   as   handing   in   the   documents  and   keys   of  a  car41  to   be   sold  or  
giving   the   keys   of   a   warehouse   where   the   goods   are   deposited   etc.)  
Consequently,   the   transfer   of   the   document   to   ownership   does   tranfer   the  
ownership  of  the  property  (such  as      If  an  immovable  is  to  be  sold  than  with  the  
conclusion  of  the  sales  contract,  the  transfer  of  the  ownership  of  the  immovable  
property  should  be  registered  in  the  Land  Registry.  42  

                                                                                                               
40  Excluding  France  

41  It  must  be  stated  here  that  apart  from  delivering  the  documents  and  the  keys  

of  a  car  in  sale,  in  order  to  establish  the  ownership  of  the  car  its  registration  by  
the  purchaser  is  also  required.    
42  In  some  few  exceptional  cases,  the  ownership  may  be  transfered  without  the  

delivery   of   the   goods   or   of   title   instruments:   F.e.   the   ownership   of   a   registered  

Anything   that   has   a   certain   economic   value   can   be   sold,   materialization   of   the  
property   has   no   relevance.   Minerals,   crops,   quarry   materials,   negotiable  
instruments,   legal   claims,   know-­‐how,   electricity43,   gas,   information,   and   even  
foreign   currency,   all   can   be   the   subject   of   a   sales   contract.   Goods   which   do   not  
exist  at  the  time  of  the  formation  of  the  contract  can  also  be  sold.  (f.e.  crops  that  
have   yet   not   been   grown   can   be   sold)   Human   beings   can   not   be   the   subject-­‐
matter   of   a   sales   contract   although   promise   to   render   their   services   can.  
However   in   such   a   case,   the   contract   in   question   will   most   probably   not   be  
considered   as   a   sales   contract   but   rather   as   an   employement   or   service  
agreeement  (locatio  conductio).  
 
The   difference   between   sales   agreement   and   other   types   of   contracts   can  
sometimes   become   rather   blur.   F.e.,   a   service   agreement   can   be   construed   as   the  
sale  of  services  or  a  rent  contract  can  be  construed  as  the  sale  of  the  use  of  the  
rental   property   for   a   certain   amount   of   time.   However,   in   order   to   consider   a  
contract  as  a  sales  contract  there  must  be  the  promise  from  the  buyer  to  pay  a  
certain   sum   of   money.   This   exchange   is   the   basic   feature   that   distinguishes   a  
sales   agreement   from   a   barter   (trampa)   or   a   gift   (hibe).   The   sales   contract   is   a  
synallagmatic   contract   meaning   that   it   burdens   both   parties   with   certain  
reciprocal  obligations.  (The  primary  obligations  being:  for  the  seller  to  transfer  
the  ownership  of  the  property  and  the  buyer  to  pay  the  price).  
 
The  sum  (price)  must  be  stated  in  a  reasonable  certainty  in  terms  of  money.  No  
restrictions   on   the   sum   to   be   in   foreign   currency   or   Turkish   Liras   under   Turkish  
Law.  The  parties  to  a  sales  contract  are  free  to  agree  any  price  unless  the  goods  
are   in   a   limited   category   of   which   the   prices   are   fixed   by   authorities   such   as  
bread,  gas  or  oil.      
 
Whereas  the  sale  of  immovables  are  subject  to  a  formal  contract  to  be  concluded  
in   the   presence   of   a   recording   officer   (tapu   memuru),   the   sale   of   movables   are  
not  subject  to  any  formal  requirements  although  there  a  few  exceptions:  certain  
types  of  sales  contract  are  subject  to  special  formal  requirements  (such  as  sale  of  
stocks,  claims,  cars  and   trademarks)   as   well   as   some  special   consumer   contracts  
such  as  sales  with  installements  (taksitle  satış).  
 
II) UNITED  NATIONS  CONVENTION  ON  CONTRACTS  FOR  THE  INTERNATIONAL  
SALE  OF  GOODS  (CISG)    
A)  IN  GENERAL  
                                                                                                                                                                                                                                                                                                                           
ship   is   considered   to   be   transfered   at   the   time   of   the   enactment   of   the   sales  
contract.  
43  Goods   or   services   such   as   electricity   which   can   be   sold,   can   also   be   utilized  

without  compensation  hence  the  crime  of  stealing  electricity.  

  
The  United  Nations  Convention  on  Contracts  for  the  International  Sale  of  Goods  
is   a  treaty  offering  a  uniform  international  sales  law  that,  as  of  August  2010,  has  
been   ratified   by   76   countries44  that   account   for   a   significant   proportion   of   world  
trade,   making   it   one   of   the   most   successful   international   uniform   laws.   Turkey   is  
one  of  the  recent  states  to  have  ratified  the  Convention.45  
 
CISG  basically  governs  three  areas:  the  conclusion  of  the  contract,  the  obligations  
of  the  seller  including  the  respective  remedies  of  the  buyer  and  the  obligations  of  
the  buyer  including  the  respective  remedies  of  the  seller.  
 

The  Convention  is  divided  into  four  parts:46  

(1)  The  first  part  (Art.  1-­‐13  CISG)  contains  rules  on  its  sphere  of  application    

(2)  The  second  part  (Art.  14-­‐24  CISG)  deals  with  the  formation  of  the  contract.  

(3)   The   third   part   (Art.   25-­‐88   CISG)   is   by   far   the   most   comprehensive   part   of   the  
Convention.   It   is   entitled   "Sale   of   Goods"   and   provides   the   actual   "sales   law"   of  
the  Convention.  It  is  subdivided  into  five  chapters:  

Chapter   I   (Art.   25-­‐29   CISG)   contains   some   general   provisions   which   may   be  
relevant  throughout  the  entire  sales  law,  in  particular  the  definition  of  the  notion  
of   "fundamental   breach"   which   will   be   relevant   in   particular   as   a   precondition  
for  the  right  to  avoid  the  contract.  

Chapter  II  (Art.  30-­‐52  CISG)  deals  with  the  obligations  of  the  seller,  delivery  of  
the  goods  and  the  handing  over  of  documents.  The  conformity  of  the  goods  and  
third  party  claims  are  also  included.  

Finally,  Section  III  (Art.  45-­‐52  CISG)  contains  the  core  element  of  every  sales  law,  
                                                                                                               
44http://en.wikipedia.org/wiki/United_Nations_Convention_on_Contracts_for_th

e_International_Sale_of_Goods    
45  Kanun  No.  5870      Kabul  Tarihi:  2/4/2009  

MADDE   1   –(1)   11   Nisan   1980   tarihinde   Viyana’da   imzaya   açılan   “Milletlerarası  

Mal   Satımına   İlişkin   Sözleşmeler   Hakkında   Birleşmiş   Milletler   Antlaşması”na  
katılmamız  uygun  bulunmuştur.  
MADDE  2  –(1)  Bu  Kanun  yayımı  tarihinde  yürürlüğe  girer.  
MADDE  3  –(1)  Bu  Kanun  hükümlerini  Bakanlar  Kurulu  yürütür.  
46  This   part   is   taken   from   Peter   Huber,   Some   introductory   remarks   on   the   CISG,  

Internationales   Handelsrecht   (6/2006)   228-­‐238,   Sellier,   Eruopean   Law  

Publishers  
 
the   buyer's   remedies   for   breach   of   contract   by   the   seller.   Art.   45(1)   CISG  
provides:  "If  the  seller  fails  to  perform  any  of  his  obligations  under  the  contract  
or  this  Convention,  the  buyer  may:  (a)  exercise  the  tights  provided  in  Art.  46  to  
52  CISG;  (b)  claim  damages  as  provided  in  Art.  74  to  77  CISG."  This  means  that  
the   buyer   can   resort   to   the   following   remedies:   performance   (Art.   46   CISG),  
including   substitute   delivery   (Art.   46(2)   CISG)   and   repair   (Art.   46(3)   CISG);  
avoidance   of   the   contract   (Art.   49   CISG);   reduction   of   the   purchase   price   (Art.   50  
CISG);   damages   (Art.   45   lit.   (b),   74   ff.   CISG).   There   are   several   specific   provisions  
for   installment   contracts   (Art.   73   CISG)   and   for   cases   of   anticipatory   breach   of  
contract  (Art.  72  CISG)  which  do,  however,  not  create  new  remedies,  but  rather  
modify   the   existing   remedies.   The   most   defining   feature   of   the   system   of  
remedies   in   the   CISG   is   that   its   aims   at   keeping   the   contract   alive   as   long   as  
possible   in   order   to   avoid   the   necessity   to   unwind   the   contract.   The   prime  
consequence   of   this   is   that   termination   of   the   contract   will   only   be   available   as   a  
remedy   of   last   resort:   It   will   usually   require   that   the   breach   committed   by   the  
seller   was   a   fundamental   one   (Art.   49(1)   lit.   (a),   25   CISG);   in   cases   of   non-­‐
delivery,   the   buyer   may   also   terminate   the   contract   after   having   fixed   an  
additional  period  of  time  without  success.  

Chapter   III   (Art.   53-­‐65   CISG)   has   a   similar   structure:   Art.   53   CISG   states   the  
buyer's   obligations   in   a   general   way,   Section   I   (Art.   54-­‐59   CISG)   deals   with   the  
obligation   to   pay   the   price,   Section   II   (Art.   60   CISG)   deals   shortly   with   the  
obligation  to  take  delivery  and  Section  III  (Art.  61-­‐64  CISG)  governs  the  seller's  
remedies   for   breach   of   contract   by   the   buyer.   The   structure   of   the   seller's  
remedies  is  similar  to  the  structure  of  the  buyer's  remedies.  

Chapter  IV  (Art.  66-­‐70  CISG)  deals  with  the  passing  of  risk  and  is  closely  linked  to  
the  buyer's  obligation  to  pay  the  price.  

Chapter  V  (Art.  71-­‐88  CISG)  contains  provisions  common  to  the  obligations  of  the  
seller  and  of  the  buyer.  Section  I  (Art.  71-­‐73  CISG)  deals  with  anticipatory  breach  
and   installment   contracts.   Section   II   (Art.   74-­‐77   CISG)   contains   the   extremely  
important  rules  on  damages;  this  section  is  closely  linked  to  Section  IV  (Art.  79-­‐
80   CISG)   which   governs   the   exemptions   from   the   strict   liability   for   damages   that  
the  Convention  imposes  on  the  parties.  Section  III  (Art.  78  CISG)  contains  a  short  
(and   fragmentary)   rule   on   interest.   Section   V   (Art.   81-­‐84   CISG)   governs   the  
effects  of  an  avoidance  of  the  contract  and  Section  VI  (Art.  85-­‐88  CISG)  deals  with  
the  preservation  of  the  goods.  

(4)   The   fourth   part   of   the   Convention   (Art.   89-­‐101   CISG)   contains   final  
provisions   which   deal   in   particular   with   the   details   of   ratification   etc.,   with  
possible   reservations   against   certain   parts   or   provisions   of   the   Convention   and  
with  the  entry  into  force  of  the  Convention.  

 
B)  SPHERE  OF  APPLICATION  AND  GENERAL  PROVISIONS  (ARTICLES  1-­‐13)47  
                                                                                                               
47  From  Wikipedia,  the  free  encyclopedia  
  

1) Goods   t hat   C ISG   i s   a pplicable  

 
The  CISG  is  intended  to  apply  to  commercial  goods  and  products  (not  services)  
only.  With  some  limited  exceptions,  the  CISG  does  not  apply  to  goods  bought  for  
personal,  family  or  household  use,  unless  the  seller,  at    any    time    before    or    at    
the    conclusion    of    the    contract,    neither    knew    nor    ought    to    have    known    that    
the    goods    were    bought    for    any    such    use.  This  exclusion  intends  to  ensure  that  
domestic  consumer-­‐protection  laws  are  not  affected  by  CISG.    Since  there  might  
be   a   conflict   between   the   Convention   and   mandatory   rules   of   domestic   law   for  
the  protection  of  consumers.  
 
On  the  other  hand  there  still  seems  to  be  a  tendency  to  recommend  the  exclusion  
of  the  Convention,  especially  in  the  commodities  trade.  
 
Auctions,  ships,  aircraft  or  intangibles  (e.g.  stocks,  shares,  investment  securities,  
negotiable   instruments   or   money,   and   electricity.)   and   services   are   also   out   of  
the   scope   of   the   Convention   (Art.   2).   Barter   contracts   are   not   governed   by   the  
Convention  either.    
 
Convention  also  provides  that  the  application  of  the  Convention  does  not  depend  
on   whether   the   parties   are   considered   "civil"   or   "commercial".   The   Convention  
thereby  avoids  the  intricate  problem  of  defining  a  "commercial  party".  It  is  also  
irrelevant  whether  the  sales  contract  is  commercial  or  private  in  character.  
 

2) Whom   t o   a pply  
 
Article   1   defines   the   Convention's   scope   of   application.   The   Convention   applies  
when  the  parties  have  their  places  of  business  in  different  Contracting  States  or  
when  conflict  rules  designate  the  law  of  a  Contracting  State.  
 
The   CISG   applies   to   contracts   of   sale   of   goods   between   parties   whose   places   of  
business   are   in   different   States   when   these   States   are   Contracting   States.   Liaison  
or  representative  offices  are  places  of  business  for  CISG  purposes.  However,  if  a  
party  has  more  than  one  place  of  business,  the  place  of  business  is  that  which  has  
the   closest   relationship   to   the   contract   and   its   performance,   having     regard     to    
the    circumstances    known    to    or    contemplated    by    the    parties    at    any    time    
before    or    at    the    conclusion    of    the    contract  (Art.  10/a).    
 
A   sale   between   two   Italian   companies   where   the   goods   sold   are   to   be  
manufactured  and  then  imported  into  Italy  would  not  fall  under  the  CISG.  On  the  
contrary,  a  sale  between  a  United  States  and  an  Italian  company  regarding  shoes  
manufactured  in  Sicily  and  delivered  in  Florence  would  fall  within  the  ambit  of  
the  CISG,  although  the  shoes  never  would  leave  Italy  prior  to  delivery.48  
 
The   CISG   also   applies   if   the   parties   are   situated   in   different   countries   (which  
need   not   be   Contracting   States)   and   the   conflict   of   law   rules   lead   to   the  
application  of  the  law  of  a  Contracting  State.  
 
Uniform   application   of   the   CISG   is   problematic   because   of   the   reluctance   of  
courts  to  use  ‘solutions  adopted  on  the  same  point  by  courts  in  other  countries’  
resulting   in   inconsistent   decisions.   For   example,   in   a   case   involving   the   export   to  
Germany  by  a  Swiss  company  of  New  Zealand  mussels  with  a  level  of  cadmium  in  
excess  of  German  standards,  the  German  Supreme  Court  found  that  it  is  not  the  
duty   of   the   seller   to   ensure   that   goods   meet   German   public   health   regulations.  
This  contrasted  with  a  later  decision  in  which  an  Italian  cheese  exporter  failed  to  
meet  French  packaging  regulations  and  the  French  court  decided  it  is  the  duty  of  
the  seller  to  ensure  compliance  with  French  regulations.  
 

3) Exclusion   o f   C ISG  
 
Parties   to   a   contract   may   exclude   or   vary   the   application   of   the   CISG.49  As  
international  commercial  sales  are  largely  governed  by  party  autonomy,  the  CISG  
provides   basic   default   rules.   International   sales   law   does   not   only   live   within   the  
CISG   (supplemented   to   a   certain   extent   by   domestic   law),   but   also   in   the   sales  
contracts  themselves  which  have  either  excluded  the  CISG,  in  whole  or  in  part,  or  
supplemented   its   rules   with   provisions   that   correspond   to   certain   problems   and  
needs  encountered  in  practice.  
 
Although  it  is  now  generally  accepted  in  western,  industrialized  countries  that  at  
least   business   parties   are   free   to   choose   the   law   applicable   to   their   contract,   this  
is   not   true   in   all   parts   of   the   world.   The   fear   of   giving   western   businesses   too  
many  advantages  still  leads  many  developing  and  transition  countries  to  refuse  
the   recognition   of   choice   of   law   clauses.   The   most   prominent   example   is   Brazil  
where  the  validity  of  choice  of  law  clauses  is  highly  controversial.50  

                                                                                                               
48  Filip  De  Ly,    Sources  Of  International  Sales  Law:  An  Eclectic  Model,  JOURNAL  OF  

LAW  AND  COMMERCE,  Vol.  25:1  

49  Parties   may   include   an   express   statement   e.g.   "The   application   the   United  

Nations   Convention   on   Contracts   for   the   International   Sale   of   Goods   is   strictly  

excluded  from  this  Agreement."  
50  Ingeborg   Schwenzer   &   Pascal   Hachem,   The   CISG   -­‐   Successes   and   Pitfalls,   57  

American  Journal  of  Comparative  Law  (Spring  2009)  457-­‐478  

  

4)   T ort   C laims   a nd   C ISG  

The   international   contractual   regime   of   the   CISG   would   in   most   cases   face   a  
domestic  tort  system  (i.e.  the  tort  law  that  the  private  international  law  rules  of  
the  forum  as  applicable).  Any  concurrence  between  the  sales  law  of  the  CISG  and  
a   (usually   domestic)   tort   system   will   therefore   run   a   high   risk   of   friction   and  
discrepancies.  
 
In   so   far   as   claims   for   personal   injury   or   death   in   the   sense   of   Art.   5   CISG   are  
concerned,  CISG  does  not  govern  those  claims.  Claims  for  damage  to  the  buyer's  
property  are  more  difficult  to  assess.  The  predominant  opinion  seems  to  be  that  
tort   claims   under   domestic   law   are   fully   admissible   and   not   subject   to   any  
(analogous   application   of   the)   restrictions   of   the   CISG   because   tort   claims   are  
based  on  policy  considerations,  which  are  different  from  the  ones  which  underlie  
contract  law.  

5)   F reedom   o f   f orm  
 
Under  Article  11,  a  contract  of  sale  need  not  be    concluded    in    or    evidenced    by    
writing    and    is    not    subject    to    any    other    requirement    as    to    form.    It  may  be    
proved     by     any     means,     including     witnesses.   States   with   a   strict   written  
requirement   exercised   their   ability   to   exclude   those   articles   relating   to   oral  
contracts.   Specifically,   Argentina,   Belarus,   Chile,   China,   Hungary,   Latvia,  
Lithuania,   Paraguay,   Russian   Federation   and   Ukraine   are   not   bound   by   Article  
11.    
 
Proving  Contract  Terms  
 
Unlike  some  domestic  laws,  under  which  certain  agreements  must  be  in  writing  
to   be   enforceable,   CISG   allows   verbal   contracts   or   modifications.   Additionally,  
any  evidence  can  be  used  to  prove  the  parties'  intent,  even  if  it  changes  the  terms  
of  a  written  contract.  Thus,  pre-­‐contract  negotiation  materials,  such  as  proposals,  
MOUs,  term  sheets  or  letters  of  intent,  can  be  used  as  evidence  to  show  what  you  
intended,  even  if  the  final  contract  contains  different  terms.    

To   prevent   such   chaos   parties   usually   include   a   statement   in   all   pre-­‐contract  

documents  that  no  representations  were  made  that  were  not  incorporated  into  
the   pre-­‐contract   document   and   that   the   pre-­‐contract   document   will   be  
superseded   and   extinguished   by   the   final   written   contract   executed   by   both  

                                                                                                                                                                                                                                                                                                                           
 
 
parties.  It  is  also  practical  to  insert  a  provision  in  the  final  contract  stating  that  all  
pre-­‐contract  discussions  and  documents  are  superseded  and  extinguished  by  the  
written   contract   executed   by   the   parties   which   cannot   be   modified   except   by   a  
writing  signed  by  the  parties.51  
 
An  example  of  such  a  clause  is  as  follows:  
 
"None of the terms, conditions or provisions of this Agreement shall be held to
have been changed, waived, varied, modified or altered by any act or
knowledge of either party, their respective agents, servants or employees unless
done so in writing signed by both parties."

B)  FORMATION  OF  THE  CONTRACT  (ARTICLES  14–24)  

 
Under  CISG  "formation"  refers  to  the  mechanics  of  how  the  contract  is  concluded  
(e.g.   by   offer   and   acceptance).   This   is   what   Art.   14-­‐24   CISG   actually   deal   with.  
Other   matters   that   may   affect   the   validity   of   the   contract   such   as   incapacity,  
fraud,   public   order   or   export   bans   are,   regarded   as   matters   of   "validity"   which  
fall  under  the  exception  of  Art.  4  and  are  therefore  not  governed  by  the  CISG.  52  
Domestic  law  shall  regulate  the  excluded  matters.  

1) Offer   a nd   W ithdrawal   o f   O ffer    

 
Art.  14  states  that  a  proposal  for  concluding  a  contract  addressed  to  one  or  more    
specific     persons     constitutes     an     offer     if     it     is     sufficiently     definite     and    
indicates    the    intention    of    the    offeror    to    be    bound    with  the    acceptance.    A  
proposal   is   sufficiently   definite     if     it     indicates     the     goods     and     expressly     or    
implicitly    fixes    or    makes    provision    for    determining    the    quantity    and    the    
price.  Where  there  is  no  explicit  price  or  procedure  to  implicitly  determine  price,  
Art.   55   provides   that   the   parties   are   assumed   to   have   agreed   upon   a   price   based  
upon  that  ‘generally  charged  at  the  time  of  the  conclusion  of  the  contract  for  such  
goods   sold   under   comparable   circumstances’.   However   the   interpretation   of   this  
Article  has  raised  many  discussions.53  

                                                                                                               
51  CISG   Article   29(2):     A  contract  in  writing  which  contains  a  provision  requiring  

any   modifications   or   termination   by   agreement   to   be   in   writing   may   not   be  

otherwise   modified   or   terminated   by   agreement.   However,   a   party   may   be  
precluded   by   his   conduct   from   asserting   such   a   provision   to   the   extent   that   the  
other  party  has  relied  on  that  contract.  
52  Peter  Huber,  

53  See,   Barry   Nicholas,   The   Vienna   Convention   on   International   Sales   Law,   105  

Law  Quarterly  Review  (1989)  201-­‐243  

  
Proposals  other  than  those  addressed  to  one  or  more  specific  persons    are  to  be  
considered  merely  as  an  invitation  to  make  offers,  unless  the  contrary    is    clearly    
indicated    by    the    person    making    the    proposal.  
 
An   offer   becomes   effective   when   it   reaches   the   offeree.   An   offer   may   be   revoked,  
if  the  revocation    reaches    the    offeree    before    he    has    dispatched    an    acceptance.  
However,  an  offer  cannot  be  revoked:  
(a)    if  it  indicates,  whether  by  stating  a  fixed  time  for  acceptance  or    otherwise,    
that    it    is    irrevocable;    or  
 (b)    if  it  was  reasonable  for  the  offeree  to  rely  on  the  offer  as  being    irrevocable    
and    the    offeree    has    acted    in    reliance    on    the    offer.  
 
An   offer,   even   if   it   is   irrevocable,   may   be   withdrawn   if   the   withdrawal   reaches    
the    offeree    before    or    at    the    same    time    as    the    offer.  

2)   A cceptance  
 
A  statement  made  by  or  other  conduct  of  the  offeree  indicating  assent  to  an  offer    
is    an    acceptance.    Silence  or  inactivity  does  not  in    itself    amount    to    acceptance.  
The   general   rule,   is   that   acceptance   is   effective   when   it   reaches   the   offeror,  
provided  that  it  does  so  within  the  time  he  has  fixed  or,  if  no  time  is  fixed,  within  
a  reasonable  time  (Art.  18/2).  
 
CISG   says   that   any   change   to   the   original   conditions   is   a   rejection   of   the   offer   –   it  
is  a  counter-­‐offer  –  unless  the  modified  terms  do  not  materially  alter  the  terms  of  
the   offer.   Changes   to   price,   payment,   quality,   quantity,   delivery,   liability   of   the  
parties  and  arbitration  conditions  may  all  materially  alter  the  terms  of  the  offer.  
 
An   acceptance   may   be   withdrawn     if     the     withdrawal     reaches     the       offeror    
before    or    at    the    same    time    as    the    acceptance    would    have    become    effective.  
 
C)  SALE  O F  GOODS  (ARTICLES  25–88)  
 

1) Fundamental   B reach 54  
 
"Fundamental   breach"   is   a   central   concept   in   the   Convention's   system   of  
remedies.   It   is   a   pre-­‐requisite   of   avoidance   of   the   contract   by   either   party   and  

                                                                                                               
54  This  part  is  taken  from,  Barry  Nicholas  
also   of   the   buyer's   right   to   require   delivery   of   substitute   goods   in   case   of   non-­‐
conformity.  And  it  is  also  important  in  the  rules  governing  risk.  
 
Article  25  provides:  

"A  breach  of  contract  committed  by  one  of  the  parties  is  fundamental  if  it  
results   in   such   detriment   to   the   other   party   as   substantially   to   deprive  
him  of  what  he  is  entitled  to  expect  under  the  contract,  unless  the  party  
in  breach  did  not  foresee  and  reasonable  person  of  the  same  kind  in  the  
same  circumstances  would  not  have  foreseen  such  a  result."  
 

2) Obligations   O f   T he   S eller   a nd   B uyer 55  

 
CISG   defines   the   duty   of   the   seller:   to   deliver   the   goods,   hand   over   any  
documents  relating  to  them  and  transfer  the  property  in  the  goods,  as  required  
by  the  contract.  Similarly,  the  duty  of  the  buyer  is  to  take  all  steps  ‘which  could  
reasonably  be  expected’  to  take  delivery  of  the  goods,  and  to  pay  for  them.  
 
Generally,  the  goods  must  be  of  the  quality,  quantity  and  description  required  by  
the  contract,  be  suitably  packaged  and  fit  for  purpose.56  The  buyer  must  examine  
the   goods   as   soon   as   is   practicable   and   he   loses   his   right   to   rely   on   the   lack   of  
conformity   if   he   does   not   give   notice   of   it   to   the   seller   (1)   within   a   reasonable  
time  after  he  has  discovered  it  or  ought  to  have  done  so,  (2)  in  any  case,  within  
two   years   of   the   actual   handing   over   of   the   goods   (Article   39).57  No   lapse   of   time  
will   disentitle   the   buyer   "if   the   lack   of   conformity   relates   to   facts   of   which   [the  
seller]   knew   or   could   not   have   been   unaware   and   which   he   did   not   disclose   to  

                                                                                                               
55  This  part  is  taken  from  Barry  Nicholas  

56  Ayıptan  sorumluluk  MADDE  219-­‐  

Satıcı,   alıcıya   karşı   herhangi   bir   surette   bildirdiği   niteliklerin   satılanda  

bulunmaması   sebebiyle   sorumlu   olduğu   gibi,   nitelik   veya   niteliği   etkileyen  
niceliğine   aykırı   olan,   kullanım   amacı   bakımından   değerini   ve   alıcının   ondan  
beklediği   faydaları   ortadan   kaldıran   veya   önemli   ölçüde   azaltan   maddi,   hukuki  
ya  da  ekonomik  ayıpların  bulunmasından  da  sorumlu  olur.  
Satıcı,  bu  ayıpların  varlığını  bilmese  bile  onlardan  sorumludur.  
 
57  MADDE   223-­‐   Alıcı,   devraldığı   satılanın   durumunu   işlerin   olağan   akışına   göre  

imkân   bulunur   bulunmaz   gözden   geçirmek   ve   satılanda   satıcının   sorumluluğunu  

gerektiren   bir   ayıp   görürse,   bunu   uygun   bir   süre   içinde   ona   bildirmek  
zorundadır.  
the  buyer"  (Article  40).58  Claims  made  long  after  the  goods  have  been  delivered  
are   often   of   doubtful   validity   and   when   the   seller   receives   his   first   notice   of   such  
a  contention  at  a  late  date,  it  would  be  difficult  for  him  to  obtain  evidence  as  to  
the  condition  of  the  goods  at  the  time  of  delivery,  or  to  invoke  the  liability  of  a  
supplier   from   whom   the   seller   may   have   obtained   the   goods   or   the   materials   for  
their  manufacture.59    
 
The  seller  is  obliged  to  deliver  goods  that  are  not  subject  to  claims  from  a  third  
party   for   infringement   of   industrial   or   intellectual   property   rights   in   the   State  
where  the  goods  are  to  be  sold.  
 
The  buyer  must  pay    the    price    for    the    goods    and    take    delivery    of    them    as    
required    by    the    contract    and    this    Convention.  
The  buyer’s  obligation  to  take  delivery  consists:  
 
(a) in  doing  all  the  acts  which  could  reasonably  be  expected  of  him    in    
order    to    enable    the    seller    to    make    delivery;    and  
 
    (b)  in  taking  over  the  goods.  
 

3)   P assing   o f   r isk  
 
National   laws   provide   for   the   passing   of   risk   in   domestic   sales   transactions.   Risk  
may  pass  at  the  conclusion  of  the  contract  (as  it  does  under  Swiss  law),  or  with  
the  transfer  of  property  (as  in  English  and  French  law),  or  upon  delivery  (as  in  
German   law).   The   Convention   could   not   have   adopted   the   second   rule   because  
the  Convention  is  not  concerned  with  the  effect  of  the  contract  on  the  property  of  
the  goods.  The  first  rule  was  not  appropriate  because  international  sales  usually  
are   concluded   at   a   distance   and   deal   with   goods   that   have   yet   to   be  
manufactured.  
 
Passing   of   risk   with   delivery,   is   workable   primarily   when   goods   are   actually  
handed   over   by   the   seller   to   the   buyer.   International   sales,   however,   normally  
involve   carriage   by   one   or   more   third   parties,   leaving   -­‐-­‐   for   a   period   of   time   -­‐-­‐  
neither  the  seller  nor  the  buyer  in  physical  possession  of  the  goods.  Sellers  are  
                                                                                                               
58  MADDE  225-­‐     Ağır   kusurlu   olan   satıcı,   satılandaki   ayıbın   kendisine  
süresinde   bildirilmemiş   olduğunu   ileri   sürerek   sorumluluktan   kısmen   de   olsa  
kurtulamaz.  
Satıcılığı   meslek   edinmiş   kişilerin   bilmesi   gereken   ayıplar   bakımından   da   aynı  
hüküm  geçerlidir.  
59Secretariat  Commentary,

http://www.cisg.law.pace.edu/cisg/text/secomm/secomm-­‐39.html    
anxious  to  transfer  the  risk  at  the  earliest  stage  of  the  transaction;  buyers  want  
to   assume   the   risk   much   later.   The   Convention   needed   to   provide   balanced   rules  
that  took  into  account  various  transactional  situations.  
 
The   Convention   does   not   establish   a   general   rule;   rather,   it   distinguishes  
between  different  transport  situations.  Where  the  goods  must  be  handed  over  to  
a   carrier   at   a   particular   place,   the   risk   does   not   pass   to   the   buyer   until   the   goods  
are   actually   handed   over   to   the   carrier   at   the   designated   place.   If   no   particular  
place  was  contemplated,  the  risk  passes  to  the  buyer  when  the  goods  are  handed  
over  to  the  first  carrier.  
 
Where  the  goods  are  sold  while  they  are  in  transit,  the  risk  normally  passes,  with  
some  exceptions,  to  the  buyer  at  the  time  the  contract  is  concluded.  
 
In  circumstances  in  which  the  buyer  is  to  take  the  goods  from  the  third  party  -­‐-­‐  
for  example,  at  a  warehouse  -­‐-­‐  the  risk  passes  when  delivery  is  due  and  the  buyer  
is  aware  that  the  goods  are  at  his  disposal.  In  all  other  circumstances,  i.e.,  when  
the  contract  does  not  involve  carriage  of  goods,  the  risk  passes  when  the  goods  
are  placed  at  the  buyer's  disposal.  On  the  whole,  the  Convention  imposes  the  risk  
of  loss  on  the  party  in  the  better  position  to  take  care  of  or  insure  the  goods.  
 
In   practice   most   contracts   define   the   ‘seller's   delivery   obligations   quite   precisely  
by  adopting  an  established  shipment  term  such  as  FOB  and  CIF.  
 
New  Turkish  Code  of  Obligations  has  adopted  a  similar  position  with  regard  to  
passing  of  risk  in  art.  208.60    

4)   R emedies   o f   B uyer   a nd   s eller 61  

a) Repair   o r   d elivery   o f   s ubstitute   g oods  

                                                                                                               
60  Yarar  ve  hasar  

MADDE   208-­‐   Kanundan,   durumun   gereğinden   veya   sözleşmede   öngörülen   özel  

koşullardan   doğan   ayrık   hâller   dışında,   satılanın   yarar   ve   hasarı;   taşınır  
satışlarında  zilyetliğin  devri,  taşınmaz  satışlarında  ise  tescil  anına  kadar  satıcıya  
aittir.Taşınır   satışlarında,   alıcının   satılanın   zilyetliğini   devralmada   temerrüde  
düşmesi   durumunda   zilyetliğin   devri   gerçekleşmişçesine   satılanın   yarar   ve  
hasarı   alıcıya   geçer.Satıcı   alıcının   isteği   üzerine   satılanı   ifa   yerinden   başka   bir  
yere   gönderirse,   yarar   ve   hasar,   satılanın   taşıyıcıya   teslim   edildiği   anda   alıcıya  
geçer.  
61  Barry   Nicholas,   The   Vienna   Convention   on   International   Sales   Law,   105   Law  
Quarterly  Review  (1989)  201-­‐243  
 
 
  
In  case  of  lack  of  conformity  the  buyer  may  request  the  seller  to  repair  the  goods,  
unless  this  is  in  all  the  circumstances  unreasonable.  Or,  if  the  lack  of  conformity  
constitutes   a   fundamental   breach,   he   may   request   the   seller   to   deliver   substitute  
goods.   Claims   made   long   after   the   goods   have   been   delivered   are   often   of  
doubtful  validity  and  when  the  seller  receives  his  first  notice  of  such  a  contention  
at  a  late  date,  it  would  be  difficult  for  him  to  obtain  evidence  as  to  the  condition  
of  the  goods  at  the  time  of  delivery,  or  to  invoke  the  liability  of  a  supplier  from  
whom   the   seller   may   have   obtained   the   goods   or   the   materials   for   their  
manufacture.  

b) Seller's   r ight   t o   c ure  

 
The  seller  has  a  right  to  cure  "any  failure  to  perform  his  obligations"  (including  
of   course   a   failure   to   deliver   conforming   goods).   The   exercise   of   this   right   is  
subject  to  its  not  causing  the  buyer  unreasonable  inconvenience  or  unreasonable  
expense  and  to  the  buyer's  right  to  damages.  
 

c) Reduction   o f   p rice  
 
In  case  of  non-­‐conformity  of  the  goods,  buyer  is  entitled  to  demand  the  reduction  
of   the   price   "in   the   same   proportion   as   the   value   that   the   goods   actually  
delivered   had   at   the   time   of   delivery   bears   to   the   value   that   conforming   goods  
would  have  had  at  that  time

Resort   to   the   remedy   of   reduction   of   price   or   to   any   other   remedy   is   not   an  

obstacle   to   a   claim   for   damages.   (Article   45/2).   The   buyer   may   therefore   both  
reduce  the  price  and  claim  damages  for  any  consequential  loss.  

When the buyer cannot resort to the remedy of damages because the lack of
conformity is "due to an impediment beyond his control" (Article 79). In this situation
the restitutionary remedy of reduction of price protects the buyer.

d)   A voidance   o f   t he   c ontract  
 
A  party  may  declare  the  contract  avoided;  
(a)  if  a  failure  by  the  other  party  to  perform  any  of  his  obligations  amounts  to  a  
fundamental  breach,    OR    
(b)  if  the  seller  fails  to  deliver  or  the  buyer  to  pay  the  price  or  take  delivery  of  the  
goods  within  a  time  period    fixed  by  the  other  party.  
The  party  avoiding  the  contract  must  do  so  within  a  reasonable  time.  Avoidance  
of   the   contract   releases   both   parties   from   their   obligations,   subject   to   any  
damages   which   may   be   due.   A   party   who   has   performed   in   whole   or   in   part   may  
claim  restitution  of  anything  supplied  or  paid.  
  

e)   P artial   p erformance  
 
Art.   51   and   52   deal   with   three   situations:     (a)   partial   delivery   of   the   goods,   (b)  
delivery  of  all  the  goods,  but  some  is  non-­‐conforming.  
 
In  case  of  (a)  or  (b),  Article  51  provides  that  the  remedies  discussed  above  apply  
in  respect  of  the  undelivered  or  non-­‐conforming  part.  Assume,  for  example,  that  
the  contract  is  for  100  tons  of  wheat  and  seller  delivers  100,  but  10  are  seriously  
defective.   If   the   defectiveness   of   the   10   tons   constitutes   a   fundamental   breach   of  
the   entire   contract   (i.e.   if   the   delivery   of   only   90   tons   of   conforming   wheat  
substantially   deprives   buyer   of   what   he   is   entitled   to   expect   under   the   contract),  
buyer   can   avoid   the   contract   (and   claim   damages).   On   the   more   probable  
assumption,   however,   that   the   defectiveness   of   the   10   tons   does   not   constitute   a  
fundamental  breach  of  the  entire  contract,  buyer  may  either  (i)  require  seller  to  
deliver   substitute   goods   for   the   10   tons,   or   (ii)   accept   the   full   100   tons   and  
reduce  the  price  in  respect  of  the  10  tons,  or  (iii)  "avoid  the  contract"  in  respect  
of  the  10  tons.  

f)   S eller's   r ight   t o   m ake   s pecification  

 
Article   65   makes   special   provision   for   the   case   in   which   the   buyer   places   an  
order  for  goods  but  leaves  until  later  the  detailed  specification  of  what  is  to  be  
supplied   and   then   fails   to   make   the   specification,   thus   making   performance   of  
the   contract   impossible.   In   these   circumstances   the   seller's   normal   recourse,   if  
Article  65  did  not  exist,  would  be  to  avoid  the  contract  (assuming  the  breach  to  
be   fundamental)   and/or   to   claim   damages.   Article   65,   however,   allows   him   to  
"make   the   specification   himself   in   accordance   with   the   requirements   of   the  
buyer   that   may   be   known   to   him."   If   he   wishes   to   do   this   he   must   inform   the  
buyer  of  the  details  of  the  specification  and  allow  him  a  reasonable  time  within  
which   to   make   a   different   specification.   If   the   buyer   fails   to   respond,   he   is   bound  
by  the  seller's  specification.  
 

g)   D amages  
 
Article  74  states  the  general  rule  in  terms  of  foreseeability:  
 
"Damages  for  breach  of  contract  by  one  party  consist  of  a  sum  equal  
to  the  loss,  including  loss  of  profit,  suffered  by  the  other  party  as  a  
consequence   of   the   breach.   Such   damages   may   not   exceed   the   loss  
which  the  party  in  breach  foresaw  or  ought  to  have  foreseen  at  the  
 time   of   the   conclusion   of   the   contract,   in   the   light   of   the   facts   and  
matters   of   which   he   then   knew   or   ought   to   have   known,   as   a  
possible  consequence  of  the  breach  of  contract."  
 
Article  75  applies  where  the  contract  has  been  avoided  by  either  party  and  the  
aggrieved  party  has  made  a  substitute  transaction  (either  a  "cover"  purchase  of  
replacement  goods  by  the  buyer  or  a  resale  by  the  seller).  In  such  cases  party  can  
recover   the   difference   between   the   contract   price   and   the   price   in   the   substitute  
transaction,   provided   that   the   transaction   was   made   "in   a   reasonable   manner  
and   within   a   reasonable   time   after   avoidance."   For   if   the   seller   re-­‐sells   at   less  
than   the   market   price   (or   the   buyer   makes   a   cover   purchase   at   more   than   the  
market  price),  he  might  have  difficulty  in  showing  that  he  acted  reasonably.    
 
Art.  76  provides  that  if  the  contract  is  avoided  without  a  substitute  transaction  
but  there  is  a  current  price  for  the  goods,  the    party    claiming    damages    may,    if    
he    has    not    made    a    purchase    or    resale    under  article  75,  recover  the  difference  
between   the   price   fixed   by   the     contract     and     the     current     price     at     the     time     of    
avoidance    as    well    as    any    further    damages    recoverable    under    article    74.    
 
In  all  the  cases  governed  by  Articles  75  and  76  further  damages  may  of  course  be  
recovered  under  Article  74.  
 
Under  the  new  Turkish  Code  of  Obligations,  the  default  of  the  seller  is  regulated  
with   reference   to   general   principles   with   regard   to   the   nonperformance   of  
contracts.  Art.  212  further  states  that,  in  a  commercial  sale  under  which  certain  
date   is   fixed   for   delivery;   the   buyer,   if   the   seller   defaults,   is   deemed   to   have  
chosen   the   option   to   avoid   the   contract   and   to   demand   damages   for   non-­‐
performance.   The   buyer   should   notify   the   buyer   if   he   is   willing   to   accept   late  
performance.   Seller   should   compensate   the   loss   sustained   by   the   buyer   either  
due   to   late   performance   or   due   to   no   performance   at   all.     Substitute   transactions  
either   as   a   actual   purchase   or   a   hypothetical   one   with   reference   to   current  
market   price,   are   regulated   in   accordance   with   art.     75   and   76   of   CISG,  
respectively.    

h)   M itigation  
 
Article  77  provides  for  the  aggrieved  party's  duty  to  mitigate  his  loss  and  reads  
as  :    
A    party    who    relies    on    a    breach    of    contract    must    take    such    
measures    as    are    reasonable    in    the    circumstances    to    mitigate    
the    loss,    including    loss    of    profit,    resulting    from    the    breach.    If    
he     fails     to     take     such     measures,     the     party     in     breach     may     claim    
 a    reduction    in    the    damages    in    the    amount    by    which    the    loss    
should    have    been    mitigated.    
 

i)   A nticipatory   b reach    
 
An   express   repudiation   by   the   defaulting   party   is   not   necessary.   It   is   sufficient  
that  it  is  "clear"  that  he  will  default.  The  prospective  default  must,  however,  be  
such   as   to   amount   to   a   fundamental   breach   in   order   to   entitle   the   aggrieved  
party  to  avoid  the  contract.      
 
Art.  72  provides  that  :  
    (1)  If  prior  to  the  date  for  performance  of  the  contract  it  is  
clear  that    one    of    the    parties    will    commit    a    fundamental    breach    
of    contract,    the    other    party    may    declare    the    contract    avoided.  
    (2)     If   time   allows,   the   party   intending   to   declare   the   contract  
avoided    must    give    reasonable    notice    to    the    other    party    in    order    
to    permit    him    to    provide    adequate    assurance    of    his    performance.  
    (3)     The   requirements   of   the   preceding   paragraph   do   not  
apply  if  the    other    party    has    declared    that    he    will    not    perform    his    
obligations.    
 

j)   I mpossibility  
 
A   party   is   not   liable   for   a   failure   to   perform   any   of   his   obligations   if   he   proves  
that  the  failure  was  due  to  an  impediment  beyond  his  control  and  he  could  not  
reasonable  be  expected  to  have  taken  the  impediment  into  account  at  the  time  of  
the   conclusion   of   the   contract   or   to   have   avoided   or   overcome   it   or   its  
consequences.  
 
III) BASIC  ELEMENTS  OF  AN  INTERNATIONAL  SALES  
CONTRACT  
 
A) PREAMBLE    &  RECITAL  
 
The  preamble  of  a  contract  is  a  kind  of  explanation  for  the  contract.  It  is  drawn  
up   once   by   the   contracting   parties.   Each   phrase   is   introduced   by   "Considering  
that"   or   "Whereas".   The   preamble   is   concluded   by   the   phrase   "Now   therefore"  
which  introduces  the  contract  itself.    
The   parties   which   have   drawn   up   a   preamble   may   wish   to   be   reminded   of   the  
background   of   the   contract,   which   conditions   their   obligation   :   the   existence   of  
closely   related   contracts,   the   particular   competence   of   a   party,   the   objectives  
 which   they   persue,   or   also   the   circumstances   which   prevail   at   the   moment   of  
conclusion.  Finally,  their  willingness  can  be  to  summarise  the  contract  and  it  is  
then  simply  addressed  to  the  third  party  or  management  of  the  company.        
 
B)  THE  DELIVERY  M ETHOD-­‐  INCOTERMS  
 
The   delivery   method   following   the   sale   should   be   specified   in   accordance   with  
the  general  commercial  customs.  (f.e.  FOB-­‐Antalya).  
 
The   term   INCOTERMs   (international   commerce   terms)   means   a   series   of  
international  sales  terms  published  by  ICC  (international  chamber  of  commerce)  
and  widely  used  by  in  international  commercial  sales.  Scope  of  this  is  limited  to  
matters   relating   to   the   rights   and   obligations   of   the   parties   with   respect   to   the  
delivery   of   the   goods   sold.   They   are   used   to   divide   transaction   costs   and  
responsibilities   between   buyer   and   seller   and   reflect   state-­‐of-­‐the-­‐art  
transportation   practices.   They   closely   correspond   to   the   U.N.   Convention   on  
Contracts  for  the  International  Sale  of  Goods.  These  INCOTERMS  are  applicable  if  
only   there   is   a   reference   to   them   in   the   contract   articles.   The   INCOTERMS   are  
divided  into  2  main  groups:  
 
ALL  MODES  OF  TRANSPORTATION:  
EXW:  Ex  Works  
FCA:  Free  Carrier  
CPT:  Carriage  Paid  To  
CIP:  Carriage  and  Insurance  Paid  
DAT:  Delivered  at  Terminal  
DAP:  Delievered  at  Place  
DDP:  Delievered  Duty  Paid  
 
SEA  AND  INLAND  WATERWAY  
TRANSPORTATION:  
FAS:  Free  Alongside  Ship  
FOB:  Free  On  Board  
CFR:  Cost  and  Freight  
     CIF:  Cost,  Insurance,  and  Freight    
 
 
62

 
 

 
 
ALL  MODES  OF  TRANSPORTATION:  

1) EXW   ( Ex   W orks)  
 
The   seller   makes   the   goods   available   at   his   premises.   The   buyer   is   responsible  
for   all   charges.   This   trade   term   places   the   greatest   responsibility   on   the   buyer  
and  minimum  obligations  on  the  seller.  The  Ex  Works  term  is  often  used  when  
making  an  initial  quotation  for  the  sale  of  goods  without  any  costs  included.  EXW  
means   that   a   seller   has   the   goods   ready   for   collection   at   his   premises   (Works,  
factory,   warehouse,   plant)   on   the   date   agreed   upon.   The   buyer   pays   all  
transportation   costs   and   also   bears   the   risks   for   bringing   the   goods   to   their   final  
destination.  
 

                                                                                                               
62  Turkish   parts   are   taken   from,   İç   ve   Dış   Ticarete   ilişkin   Ticari   Terimlerin  

Kullanımı  için  ICC  Kuralları,  Ercüment  Erdem  

  
 

2)   F CA   ( Free   C arrier)  
 
The  seller  hands  over  the  goods,  cleared  for  export,  into  the  custody  of  the  first  
carrier   (named   by   the   buyer)   at   the   named   place.   This   term   is   suitable   for   all  
modes   of   transport,   including   carriage   by   air,   rail,   road,   and   containerised   /  
multi-­‐modal  sea  transport.  
 

 
 

3)   C PT   ( Carriage   P aid   t o)  
 
CPT:   The   general/containerised/multimodal   equivalent   of   CFR.   The   seller   pays  
for   carriage   to   the   named   point   of   destination,   but   risk   passes   when   the   goods  
are  handed  over  to  the  first  carrier.  
 
  
 

 
4)   C IP   ( Carriage   a nd   I nsurance   P ay   t o)  
 
CIP:   The   containerised   transport/multimodal   equivalent   of   CIF.   Seller   pays   for  
carriage   and   insurance   to   the   named   destination   point,   but   risk   passes   when   the  
goods  are  handed  over  to  the  first  carrier.  
 

 
 

5)   D AT   ( Delivered   a t   T erminal)  
  

6)   D AP   ( Delivered   a t   P lace)  
 

 
 
7)   D DP   ( Delivered   D uty   P aid).    
 
 
 

 
 
  
 
SEA  AND  INLAND  WATERWAY  TRANSPORTATION:  
 

8)   F AS:   F ree   A longside   S hip  

 
The  seller  must  place  the  goods  alongside  the  ship  at  the  named  port.  The  seller  
must  clear  the  goods  for  export.  Suitable  only  for  maritime  transport  but  NOT  for  
multimodal  sea  transport  in  containers.  This  term  is  typically  used  for  heavy-­‐lift  
or  bulk  cargo.  
 

 
 

 
 
 

9)   F OB:   F ree   O n   B oard  

 
The  seller  must  themselves  load  the  goods  on  board  the  ship  nominated  by  the  
buyer,  cost  and  risk  being  divided  at  ship's  rail.  The  seller  must  clear  the  goods  
for   export.   Maritime   transport   only   but   NOT   for   multimodal   sea   transport   in  
containers.  The  buyer  must  instruct  the  seller  the  details  of  the  vessel  and  port  
where  the  goods  are  to  be  loaded,  and  there  is  no  reference  to,  or  provision  for,  
the  use  of  a  carrier  or  forwarder.  It  DOES  NOT  include  Air  transport.  This  term  
has  been  greatly  misused  over  the  last  three  decades  ever  since  Incoterms  1980  
explained  that  FCA  should  be  used  for  container  shipments.  
 

 
 
 

10)   C FR:   C ost   a nd   F reight  

 
Seller  must  pay  the  costs  and  freight  to  bring  the  goods  to  the  port  of  destination.  
However,   risk   is   transferred   to   the   buyer   once   the   goods   have   crossed   the   ship's  
rail.   Maritime   transport   only   and   Insurance   for   the   goods   is   NOT   included.  
Insurance  is  at  the  Cost  of  the  Buyer.  
 
  
 
 

  1 1)   C IF:   C ost,   I nsurance,   a nd   F reight  

 
Exactly  the  same  as  CFR  except  that  the  seller  must  in  addition  procure  and  pay  
for  insurance  for  the  buyer.  Maritime  transport  only.  
 

 
 
 IV) ICC  MODEL  SALES  CONTRACT  
 
ICC   has   prepared   a     Model   International   Sale   Contract       (the   "Model   Contract").  
for  "manufactured  goods  intended  for  resale".  Thus  it  excludes  those  large  vital  
goods  produced  for  single  users  (which  have  a  host  of  additional  complexities),  
and   such   goods   as   commodities   which   have   widely   fluctuating   values.   It   is   also  
not  best  suited  for  continuing  supply  arrangements.  
 
The   Model   Contract   is   divided   into   two   parts.   The   first,   Part   A,   is   essentially   a  
checklist  of  specific  conditions  to  an  international  sale;  the  second,  Part  B,  is  a  list  
of  General  Conditions  divided  into  14  articles.  
 ICC MODEL INTERNATIONAL SALE CONTRACT

(Manufactured Goods Intended for Resale)

A. Specific Conditions

These Specific Conditions have been prepared in order to permit the parties to agree
the particular terms of their sale contract by completing the spaces left open or
choosing (as the case may be) between the alternatives provided in this document.
Obviously this does not prevent the parties from agreeing other terms or further
details in box A-16 or in one or more annexes.

A-1 GOODS SOLD

___________________________________

___________________________________

(DESCRIPTION OF THE GOODS)

If there is insufficient space parties may use an annex.

A-2 CONTRACT PRICE (ART. 4)

Currency: ______________________
amount in numbers:______________ amount in letters: _____________________

A-3 DELIVERY TERMS

Recommended terms (according to Incoterms 2010): (see Introduction of Incoterms

2010, ��5)

�� EXW Ex Works named place: ____________

�� FCA Free Carrier named place: ____________

�� FAS Free Alongside Ship named port of shipment: ____________

�� FOB Free On Board named port of shipment: ____________

�� CFR Cost and Freight named port of destination:

____________

�� CIF Cost Insurance and Freight named port of destination:

____________

�� CPT Carriage Paid To named place of destination:

____________
�� CIP Carriage and Insurance Paid To named place of destination:
____________
�� DAT: Delivered at Terminal

�� DAP: Delievered at Place

�� DDP Delivered Duty Paid named place of destination:

____________

�� Other delivery terms

CARRIER (where applicable)

NAME AND ADDRESS CONTACT PERSON
________________ ________________
A-4 TIME OF DELIVERY

Indicate here the date or period (e.g. week or month) at which or within which the
Seller must perform his delivery obligations according to clause A.4 of the respective
Incoterm (see Introduction, �� 6)

________________________________________________________
________________________________________________________
��
A-5 INSPECTION OF THE GOODS BY BUYER (ART. 3)

�� Before shipment place of inspection: _______________

�� Other: ________________________________________
A-6 RETENTION OF TITLE (ART. 7)

�� YES �� NO

A-7 PAYMENT CONDITIONS (ART. 5)

�� Payment on open account (art. 5.1)

Time for payment (if different from art. 5.1) ____ days from date of invoice.
�� Open account backed by demand guarantee or standby letter of credit (art.
5.5)
��
�� Payment in advance (art. 5.2)
Date (if different from art. 5.2): ________ �� Total price �� ____%
of the price
��
�� Documentary Collection (art. 5.5)
 �� D/P Documents against payment �� D/A Documents against
acceptance
��
�� Irrevocable Documentary Credit (art. 5.3) �� Confirmed ��
Unconfirmed
Place of issue (if applicable): _________ Place of confirmation (if
applicable): _________
��
Credit available:
�� By payment at sight �� By deferred payment at:
___ days
�� By acceptance of drafts at: ___ days �� By negotiation
��
Partial shipments: Transhipment:
�� Allowed �� Allowed
�� Not allowed �� Not allowed
��
Date on which the documentary credit must be notified to seller (if different from
art. 5.3)
�� ______ days before date of delivery �� other: _____________
��
�� Other: _________________________________________________________
(e.g. cheque, bank draft, electronic funds transfer to designated bank account of
seller)
A-8 DOCUMENTS

Indicate here documents to be provided by Seller. Parties are advised to check the
Incoterm they have selected under A-3 of these Specific Conditions. (As concerns
transport documents, see also Introduction, �� 8)

�� Transport documents: indicate type of transport document required

_________
�� Commercial Invoice �� Certificate of origin
�� Packing list �� Certificate of inspection
�� Insurance document �� Other: ____________

Insurance:   Under   Incoterms   CIF   the   seller   is   responsible   for   purchasing   only  
"free   of   particular   average"   insurance,   which   has   the   most   limited   type   of  
recovery   and   is   commensurately   inexpensive.   Most   buyers   on   the   other   hand  
would   prefer   the   goods   to   be   insured   on   the   basis   of   a   "with   average",   "all   risks",  
including  "war  risks"  policy.63  

                                                                                                               
63  James  M.  Klotz,  Critical  Review  of  The  ICC  Model  International  Sale  Contract,  

ISGw3  Database,  Pace  Law  School,  

  
With  regard  to  the  Certificate  of  Origin,  the  buyer  may  ask  for  a  warranty  of  the  
veracity   of   the   Certificate   along   with   an   undertaking   to   notify   the   seller   if   the  
Certificate  of  Origin  is  ever  investigated,  as  this  may  affect  the  buyer's  ability  to  
export  the  goods  into  other  countries  at  the  preferential  tariff  rate.64  
 
A  Certificate  of  Inspection  can  vary  in  a  myriad  of  ways.  It  can  be  issued  based  on  
a  sample  inspection,  a  closed,  or  an  open  package  inspection.  By  merely  checking  
off   the   box   on   the   Model   Contract,   the   seller   is   unrestricted   in   the   inspecting  
agency  that  is  chosen,  or  the  type  of  inspection  undertaken.  Such  a  Certificate  of  
Inspection   might   be   of   far   less   value   to   the   buyer   than   one   which   fulfills   the  
buyer's  needs.65  
 
A-9 CANCELLATION DATE

TO BE COMPLETED ONLY IF THE PARTIES WISH TO MODIFY ARTICLE 10.3

If the goods are not delivered for any reason whatsoever (including force
majeure) by (date) _______ the Buyer will be entitled to CANCEL THE CONTRACT
IMMEDIATELY BY NOTIFICATION TO THE SELLER

A-10 LIABILITY FOR DELAY (art. 10.1, 10.4 AND 11.3)

TO BE COMPLETED ONLY IF THE PARTIES WISH TO MODIFY ART. 10.1, 10.4

OR 11.3
Liquidated damages for delay in delivery shall be:
�� ____ % (of price of delayed goods) per week, with a maximum of ____ % (of
price of delayed goods) or:
�� ________ (specify amount)
��
In case of termination for delay, Seller��s liability for damages for delay is
limited to ____ % of the price of the non-delivered goods
��
A-11 LIMITATION OF LIABILITY FOR LACK OF CONFORMITY (ART. 11.5)
TO BE COMPLETED ONLY IF THE PARTIES WISH TO MODIFY ART. 11.5.

Seller��s liability for damages arising from lack of conformity of the goods
shall be:

�� limited to proven loss (including consequential loss, loss of profit, etc.) not
exceeding _____ % of the contract price; or:

�� as follows (specify):
                                                                                                               
64  ibid.  

65  ibid.  
 _____________________________________________________________

A-12 LIMITATION OF LIABILITY WHERE NON-CONFORMING GOODS ARE

RETAINED BY THE BUYER

(ART. 11.6)

TO BE COMPLETED ONLY IF THE PARTIES WISH TO MODIFY ART. 11.6

The price abatement for retained non-conforming goods shall not exceed:

�� ___% of the price of such goods or: �� ________ (specify amount)

A-13 TIME-BAR (Art.11.8)

TO BE COMPLETED ONLY IF THE PARTIES WISH TO MODIFY ART. 11.8.

Any action for non-conformity of the goods (as defined in article 11.8) must be taken
by the Buyer not later than __________ from the date of arrival of the goods at
destination

A-14(a), A-14(b) APPLICABLE LAW (Art.1.2)

TO BE COMPLETED ONLY IF THE PARTIES WISH TO SUBMIT THE SALE

CONTRACT TO A NATIONAL LAW INSTEAD OF CISG.

(a) This sales contract is governed by the domestic law of __________ (country)
To be completed if parties wish to choose a law other than that of the seller for
questions not covered by CISG
(b) Any questions not covered by CISG will be governed by the law of
____________ (country)

A-15 RESOLUTION OF DISPUTES (Art.14)

The two solutions hereunder (arbitration or litigation before ordinary courts) are
alternatives: parties cannot choose both of them. If no choice is made, ICC
arbitration will apply, according to art. 14

�� ARBITRATION �� LITIGATION
(ordinary courts)
�� ICC (according to art. 14.1) In case of dispute the
courts of
Place of arbitration _________ _________________
(place)
�� Other ___________________ (specify) shall have jurisdiction.
It  is  important  to  indicate  whether  the  selected  jurisdiction  is  to  be  exclusive  or  
not.   In   an   international   sale,   if   litigation   is   clearly   chosen   as   the   dispute  
resolution   mechanism,   giving   jurisdiction   to   one   party's   local   court,   but   not  
exclusive  jurisdiction,  may  not  fulfill  the  needs  of  the  parties.  

A-16 OTHER

_______________________________

________________________________

The present contract of sale will be governed by these Specific Conditions (to the
extent that the relevant boxes have been completed) and by the ICC General
Conditions of Sale (Manufactured Goods Intended for Resale) which constitute part
B of this document.

SELLER BUYER
(signature) (signature)
___________________________ _________________________
__
place __________ date ________ place __________ date
________

B. General Conditions

Art. 1 GENERAL

1.1 These General Conditions are intended to be applied together with the Specific
Conditions (part A) of the International Sale Contract (Manufactured Goods Intended
for Resale), but they may also be incorporated on their own into any sale contract.
Where these General Conditions (Part B) are used independently of the said Specific
Conditions (Part A), any reference in Part B to Part A will be interpreted as a
reference to any relevant specific conditions agreed by the parties. In case of
contradiction between these General Conditions and any specific conditions agreed
upon between the parties, the specific conditions shall prevail.

1.2 Any questions relating to this Contract which are not expressly or implicitly settled
by the provisions contained in the Contract itself (i.e. these General Conditions and
any specific conditions agreed upon by the parties) shall be governed:

A. by the United Nations Convention on Contracts for the International Sale of

Goods (Vienna Convention of 1980, hereafter referred to as CISG), and

B. to the extent that such questions are not covered by CISG, by reference to the
 law of the country where the Seller has his place of business.

1.3 Any reference made to trade terms (such as EXW, FCA, etc.) is deemed to be
made to the relevant term of Incoterms published by the International Chamber of
Commerce

1.4 Any reference made to a publication of the International Chamber of Commerce

is deemed to be made to the version current at the date of conclusion of the
Contract.

1.5 No modification of the Contract is valid unless agreed or evidenced in writing.

However, a party may be precluded by his conduct from asserting this provision to
the extent that the other party has relied on that conduct.

ART. 2 CHARACTERISTICS OF THE GOODS

2.1 It is agreed that any information relating to the goods and their use, such as
weights, dimensions, capacities, prices, colours and other data contained in
catalogues, prospectuses, circulars, advertisements, illustrations, price-lists of the
Seller, shall not take effect as terms of the Contract unless expressly referred to in
the Contract.

2.2 Unless otherwise agreed, the Buyer does not acquire any property rights in
software, drawings, etc. which may have been made available to him. The Seller also
remains the exclusive owner of any intellectual or industrial property rights relating to
the goods.

ART. 3 INSPECTION OF THE GOODS BEFORE SHIPMENT

If the parties have agreed that the Buyer is entitled to inspect the goods before
shipment, the Seller must notify the Buyer within a reasonable time before the
shipment that the goods are ready for inspection at the agreed place.

ART. 4 PRICE

4.1 If no price has been agreed, the Seller’’s current list price at the time of the
conclusion of the Contract shall apply. In the absence of such a current list price, the
price generally charged for such goods at the time of the conclusion of the Contract
shall apply.

4.2 Unless otherwise agreed in writing, the price does not include VAT, and is not
subject to price adjustment.

4.3 The price indicated under A-2 (contract price) includes any costs which are at the
Seller’s charge according to this Contract. However, should the Seller bear any costs
which, according to this Contract, are for the Buyer’s account (e.g. for transportation
or insurance under EXW or FCA), such sums shall not be considered as having been
included in the price under A-2 and shall be reimbursed by the Buyer.
ART. 5 PAYMENT CONDITIONS

5.1 Unless otherwise agreed in writing, or implied from a prior course of dealing
between the parties, payment of the price and of any other sums due by the Buyer to
the Seller shall be on open account and time of payment shall be 30 days from the
date of invoice. The amounts due shall be transferred, unless otherwise agreed, by
teletransmission to the Seller’s bank in the Seller’s country for the account of the
Seller and the Buyer shall be deemed to have performed his payment obligations
when the respective sums due have been received by the Seller’s bank in
immediately available funds.

In   open   account,   payment   is   made   by   the   buyer   in   determined   time   after   the  
seller  ships  the  goods.    “Purchase  on  open  account  means  that  the  buyer  agrees  
to  pay  for  goods  ordered  within  a  designated  time  after  their  shipment.  Common  
terms  are  30,  60,  or  90  days.  In  open  account,  parties  don’t  necessarily  need  to  
use   banks   and   billing   can   be   done   by   the   seller   in   firsthand.     In   this   method,  
conversely  to  cash  in  advance,  the  seller  takes  the  greatest  risk  and  he  is  totally  
allocated  to  risk,  whereas  the  buyer  is  risk  free.    Payment  is  solely  based  on  the  
buyer’s  creditworthiness  and  commitment  to  pay  
 
5.2 If the parties have agreed on payment in advance, without further indication, it
will be assumed that such advance payment, unless otherwise agreed, refers to the
full price, and that the advance payment must be received by the Seller’s bank in
immediately available funds at least 30 days before the agreed date of delivery or the
earliest date within the agreed delivery period. If advance payment has been agreed
only for a part of the contract price, the payment conditions of the remaining amount
will be determined according to the rules set forth in this article.

Cash   in   advance   is   the   frequently   used   and   the   easiest   international   payment  
method.    The  definition  and  procedure  of  cash  in  advance,  which  is  also  known  
as   “Payment   in   Advance”,   is:   “The   buyer   simply   prepays   the   seller   prior   to  
shipment  of  the  goods.  This  term  of  payment  requires  that  the  buyer  have  a  high  
level  of  confidence  in  the  ability  and  willingness  of  the  seller  to  deliver  the  goods  
as   ordered.   This   method   protects   sellers   and   sellers   undertake   no   risk.     On   the  
other  hand,  in  cash  in  advance  risk  is  totally  carried  by  buyers.      
 
5.3 If the parties have agreed on payment by documentary credit, then, unless
otherwise agreed, the Buyer must arrange for a documentary credit in favour of the
Seller to be issued by a reputable bank, subject to the Uniform Customs and Practice
for Documentary Credits published by the International Chamber of Commerce, and
to be notified at least 30 days before the agreed date of delivery or at least 30 days
before the earliest date within the agreed delivery period. Unless otherwise agreed,
the documentary credit shall be payable at sight and allow partial shipments and
transhipments.
In   form,   a     letter   of   credit   is   nothing   more   than   a   letter   from   a   financial  
institution   promising   to   pay   a   stated   sum   of   money   upon   the   receipt   of   specified  
documents.    The  basic  concept  is  that  the  prospective  payor  goes  to  a  bank  and  
asks  it  to  issue  a  letter  of  credit  to  the  prospective  payee.  The  L/C  is  a  guarantee,  
given   by   the   buyer's   bank,   that   they   will   pay   for   the   goods   exported,   provided  
that   the   exporter   can   provide   a   given   set   of   documents   in   accordance   with  
clauses   specified   in   the   L/C   and   in   a   timely   manner.   In   letter   of   credit   risk   is  
evenly  shared  and  carried  by  the  seller  and  the  buyer.  
 
5.4 If the parties have agreed on payment by documentary collection, then, unless
otherwise agreed, documents will be tendered against payment (D/P) and the tender
will in any case be subject to the Uniform Rules for Collections published by the
International Chamber of Commerce.

A documentary collection is an order by the seller to his bank to collect payment from the buyer in
exchange for the transfer of documents that enable the holder to take possession of the goods A set of
documents containing a Bill of Lading would normally allow the holder to take possession of the
goods. Bill of exchange is a negotiable instrument that orders payor to make the deficient mount of
payment to payee. On the other hand, A bill of lading is a document issued by a carrier to a shipper,
signed by the captain, agent, or owner of a vessel, furnishing written evidence regarding receipt of the
goods (cargo), the conditions on which transportation is made (contract of carriage), and the
engagement to deliver goods at the prescribed port of destination to the lawful holder of the bill of
lading. Under D/P terms, the seller, through a bank acting as an agent, is able to retain control of the
goods until the buyer pays.

5.5 To the extent that the parties have agreed that payment is to be backed by a
bank guarantee, the Buyer is to provide, at least 30 days before the agreed date of
delivery or at least 30 days before the earliest date within the agreed delivery period,
a first demand bank guarantee subject to the Uniform Rules for Demand Guarantees
published by the International Chamber of Commerce, or a standby letter of credit
subject either to such Rules or to the Uniform Customs and Practice for
Documentary Credits published by the International Chamber of Commerce, in either
case issued by a reputable bank.

ART. 6 INTEREST IN CASE OF DELAYED PAYMENT

6.1 If a party does not pay a sum of money when it falls due the other party is entitled
to interest upon that sum from the time when payment is due to the time of payment.

6.2 Unless otherwise agreed, the rate of interest shall be 2% above the average
bank short-term lending rate to prime borrowers prevailing for the currency of
payment at the place of payment, or where no such rate exists at that place, then the
same rate in the State of the currency of payment. In the absence of such a rate at
either place the rate of interest shall be the appropriate rate fixed by the law of the
State of the currency of payment.

ART. 7 RETENTION OF TITLE

If the parties have validly agreed on retention of title, the goods shall remain the
property of the Seller until the complete payment of the price, or as otherwise
agreed.

ART. 8 CONTRACTUAL TERM OF DELIVERY

Unless otherwise agreed, delivery shall be "Ex Works" (EXW).

ART. 9 DOCUMENTS

Unless otherwise agreed, the Seller must provide the documents (if any) indicated in
the applicable Incoterm or, if no Incoterm is applicable, according to any previous
course of dealing.

ART. 10 LATE-DELIVERY, NON-DELIVERY AND REMEDIES THEREFOR

10.1 When there is delay in delivery of any goods, the Buyer is entitled to claim
liquidated damages equal to 0.5% or such other percentage as may be agreed of the
price of those goods for each complete week of delay, provided the Buyer notifies the
Seller of the delay. Where the Buyer so notifies the Seller within 15 days from the
agreed date of delivery, damages will run from the agreed date of delivery or from
the last day within the agreed period of delivery. Where the Buyer so notifies the
Seller after 15 days of the agreed date of delivery, damages will run from the date of
the notice. Liquidated damages for delay shall not exceed 5% of the price of the
delayed goods or such other maximum amount as may be agreed.

The  subject  of  direct,  indirect,  special  and  consequential  damages  is  ambiguous.  
Such   damages,   at   least   to   certain   extent,   are   of   the   kind   that   the   seller   would  
ordinarily  prefer  to  contract  out  of.    
 
Below  are  some  sample  clauses  to  this  effect  :  
“In no event shall the Seller be responsible for any direct, indirect, special or
consequential damages, including loss of anticipated profits, loss of time or any
other losses incurred by the Buyer in connection with the purchase, installation
or operation or failure of the goods."
 
10.2 If the parties have agreed upon a cancellation date in Box A-9, the Buyer may
terminate the Contract by notification to the Seller as regards goods which have not
been delivered by such cancellation date for any reason whatsoever (including a
force majeure event).
10.3 When article 10.2 does not apply and the Seller has not delivered the goods by
the date on which the Buyer has become entitled to the maximum amount of
liquidated damages under article 10.1, the Buyer may give notice in writing to
terminate the Contract as regards such goods, if they have not been delivered to the
Buyer within 5 days of receipt of such notice by the Seller.

If   the   parties   have   not   agreed   to   a   "drop   dead"   date,   the   buyer   can   terminate   the  
agreement   after   the   expiration   of   a   10   week   period   -­‐-­‐   a   very   long   period   of   time.  
A  two  and  a  half  month  delay  in  delivery  of  manufactured  goods  for  resale  is  a  
very  long  delay  -­‐-­‐  much  longer  than  a  buyer  would  ordinarily  agree  to.66  
 
10.4 In case of termination of the Contract under article 10.2 or 10.3 then in addition
to any amount paid or payable under article 10.1, the Buyer is entitled to claim
damages for any additional loss not exceeding 10% of the price of the non-delivered
goods.

10.5 The remedies under this article are exclusive of any other remedy for delay in
delivery or non-delivery.

ART. 11 NON-CONFORMITY OF THE GOODS

11.1 The Buyer shall examine the goods as soon as possible after their arrival at
destination and shall notify the Seller in writing of any lack of conformity of the goods
within 15 days from the date when the Buyer discovers or ought to have discovered
the lack of conformity. In any case the Buyer shall have no remedy for lack of
conformity if he fails to notify the Seller thereof within 12 months from the date of
arrival of the goods at the agreed destination.

The   wording   does   not   match   the   language   of   the   CISG   Article   39/167  which  
requires   the   buyer   to   notify   the   seller   of   the   "nature   of   the   non-­‐conformity".    
Therefore   it   would   be   for   sake   of   clarity   to   draft   the   clause   so   as   to   make   the  
notification  including  necessary  details.    
 
In  2006  a  German  Court  ruled  that    

"1. If the buyer accepts the goods without immediate notice he has to prove
their lack of conformity regardless of whether the time span of Art. 39 has
already elapsed. When taking over the goods under FOB terms that point in
time is decisive.

                                                                                                               
66  ibid.    

67  CISG,   Article   39(1):   The  buyer  loses  the  right  to  rely  on  a  lack  of  conformity  of  

the  goods  if  he  does  not  give  notice  to  the  seller  specifying  the  nature  of  the  lack  of  
conformity   within   a   reasonable   time   after   he   has   discovered   it   or   ought   to   have  
discovered  it.  
 "2. The buyer may retain the right to rely on the lack of conformity only by
giving a notice which identifies the non-conformity and shows intention to
object in accordance with Art. 39(1) CISG. In this respect, it is insufficient
if the unconformity is only mentioned incidentally amongst other such
notices and it is stated therein that this specific unconformity is no longer of
importance."
GERMANY: Oberlandesgericht Karlsruhe 8 February 200668
 
11.2 Goods will be deemed to conform to the Contract despite minor discrepancies
which are usual in the particular trade or through course of dealing between the
parties but the Buyer will be entitled to any abatement of the price usual in the trade
or through course of dealing for such discrepancies.

11.3 Where goods are non-conforming (and provided the Buyer, having given notice
of the lack of conformity in compliance with article 11.1, does not elect in the notice
to retain them), the Seller shall at his option:

(a) replace the goods with conforming goods, without any additional expense to the
Buyer, or

(b) repair the goods, without any additional expense to the Buyer, or

(c) reimburse to the Buyer the price paid for the non-conforming goods and
thereby terminate the Contract as regards those goods.

The Buyer will be entitled to liquidated damages as quantified under article 10.1 for
each complete week of delay between the date of notification of the non-conformity
according to article 11.1 and the supply of substitute goods under article 11.3(a) or
repair under article 11.3(b) above. Such damages may be accumulated with
damages (if any) payable under article 10.1, but can in no case exceed in the
aggregate 5% of the price of those goods.

The  Model  Contract  does  not  set  a  time  limit  identify  for  the  Buyer  to  elect  the  
optional   remedies.   However   since   the   liquidated   damages   are   limited   to   %5   of  
the  price,  buyer  has  a  small  monetary  incentive  to  delay  making  its  "election".  
 
11.4 If the Seller has failed to perform his duties under article 11.3 by the date on
which the Buyer becomes entitled to the maximum amount of liquidated damages
according to that article, the Buyer may give notice in writing to terminate the
Contract as regards the non-conforming goods unless the supply of replacement
goods or the repair is effected within 5 days of receipt of such notice by the Seller.

Article   B-­‐11.4,   the   buyer   has   to   notify   the   seller   at   the   expiry   of   this   10   week  
period  of  its  intention  to  terminate  the  agreement,  in  which  case  the  seller  gets  
                                                                                                               
68  http://cisgw3.law.pace.edu/cases/060208g1.html    
an   additional   five   days   to   perform.   These   provisions   are   not   typical   of   non-­‐
conformity   provisions   that   get   negotiated   in   the   real-­‐life   international   sale   of  
manufactured  goods.  
 
11.5 Where the Contract is terminated under article 11.3(c) or article 11.4, then in
addition to any amount paid or payable under article 11.3 as reimbursement of the
price and damages for any delay, the Buyer is entitled to damages for any additional
loss not exceeding 10% of the price of the non-conforming goods.

11.6 Where the Buyer elects to retain non-conforming goods, he shall be entitled to a
sum equal to the difference between the value of the goods at the agreed place of
destination if they had conformed with the Contract and their value at the same place
as delivered, such sum not to exceed 15% of the price of those goods.

11.7 Unless otherwise agreed in writing, the remedies under this article 11 are
exclusive of any other remedy for non-conformity.

11.8 Unless otherwise agreed in writing, no action for lack of conformity can be taken
by the Buyer, whether before judicial or arbitral tribunals, after 2 years from the date
of arrival of the goods. It is expressly agreed that after the expiry of such term, the
Buyer will not plead non-conformity of the goods, or make a counter-claim thereon, in
defence to any action taken by the Seller against the Buyer for non-performance of
this Contract.

ART. 12 COOPERATION BETWEEN THE PARTIES

12.1 The Buyer shall promptly inform the Seller of any claim made against the Buyer
by his customers or third parties concerning the goods delivered or intellectual
property rights related thereto.

12.2 The Seller will promptly inform the Buyer of any claim which may involve the
product liability of the Buyer.

It  will  not  be  surprising  that  sellers  would  limit  this  obligation  significantly.  
 
ART. 13 FORCE MAJEURE

13.1 A party is not liable for a failure to perform any of his obligations in so far as he
proves:

(a) that the failure was due to an impediment beyond his control, and

(b) that he could not reasonably be expected to have taken into account the
impediment and its effects upon his ability to perform at the time of the
conclusion of the Contract, and

(c) that he could not reasonably have avoided or overcome it or its effects.
13.2 A party seeking relief shall, as soon as practicable after the impediment and its
effects upon his ability to perform become known to him, give notice to the other
party of such impediment and its effects on his ability to perform. Notice shall also be
given when the ground of relief ceases.

Failure to give either notice makes the party thus failing liable in damages for loss
which otherwise could have been avoided.

13.3 Without prejudice to article 10.2, a ground of relief under this clause relieves the
party failing to perform from liability in damages, from penalties and other contractual
sanctions, except from the duty to pay interest on money owing as long as and to the
extent that the ground subsists.

13.4 If the grounds of relief subsist for more than six months, either party shall be
entitled to terminate the Contract with notice.

FORCE  MAJEURE  &  HARDSHIP  CLAUSES  

 
After   a   contract   is   agreed   upon,   according   to   the   legal   principle   pacta   sund  
servanda   both   parties   are   bound   with   the   contract   and   the   provisions   thereof.  
The  only  exception  of  this  rule  comes  with  the  occurance  of  some  extraordinary  
events   that   are   totally   beyond   the   control   of   the   parties.   War,   civil   unrest,  
rebellion,  strike,  fire,  flood,  earthquake,  extraordinary  surge  in  the  prices  of  raw  
materials,  unexpected  hyper  inflation  or  devaluation  are  among  some  instances  
that   can   deeply   affect   the   proper   execution   of   an   international   business  
agreement.   The   issue   becomes   more   serious     when   dealing   with   long   term  
agreements.    
 
As   a   general   legal   principle   such   acts   of   god   (vis   maiore,   force   majeur,   mücbir  
sebep)   nullifies   (or   alters)   the   obligations   of   the   parties.   However,   if   the   events  
that   constitute   a   force   majeur   are   not   specified   in   the   contract   then   the  
determination   of   the   events   that   will   be   deemed   as   a   force   majeur   will  
nonetheless  prove  to  be  problematic.  The  important  point  here  that  needs  to  be  
mentioned  is:  if  both  parties  cannot  agree  upon  a  specific  event  to  have  the  effect  
of  a  force  majeur  then  this  problem  is  to  be  solved  by  the  courts  of  the  country  
whose  law  is  to  be  applied  to  the  contract.  And  if  this  law  is  not  specified  in  the  
contract  then  this  becomes  the  problem  of  the  conflicts  of  laws.    
 
The   parties   to   the   contract   can   designate   the   events   that   they   deem   to   be   a   force  
majeur;   the   scope   under   which   they   will   hold   an   event   to   have   the   effect   of   force  
majeure;  they  can  frame  compensation,  refundment  or  remittance  opportunities;  
they  can  set  up  legal  frameworks  where  they  can  decide  to  themselves  whether  
they  want  to  keep  the  contract  valid  or  not  in  the  light  of  such  developments.  69  
                                                                                                               
69  İfa  imkânsızlığı  
  
 

Sample  Clauses  

“A party is not liable for failure to perform the party's obligations if such
failure is as a result of Acts of God (including fire, flood, earthquake, storm,
hurricane or other natural disaster), war, invasion, act of foreign enemies,
hostilities (regardless of whether war is declared), civil war, rebellion,
revolution, insurrection, military or usurped power or confiscation, terrorist
activities, nationalisation, government sanction, blockage, embargo, labor
dispute, strike, lockout or interruption or failure of electricity or telephone
service. No party is entitled to terminate this Agreement under Clause 19
(Termination) in such circumstances.
 
 
“If a party asserts Force Majeure as an excuse for failure to perform the party's
obligation, then the nonperforming party must prove that the party took
reasonable steps to minimize delay or damages caused by foreseeable events,
that the party substantially fulfilled all non-excused obligations, and that the
other party was timely notified of the likelihood or actual occurrence of an
event described in Clause 18 (Force Majeure).” OR

“The obligations of each of the Parties hereunder, other than the obligation to
make payments of money, shall be suspended during a period of Force
Majeure and the term of the relevant period or phase of this Agreement shall
be extended for a time equivalent to the period of Force Majeure situation. In
the event of Force Majeure the Party affected thereby shall give notice thereof
to the other Party as soon as reasonably practical stating the starting date and
the extent of such suspension of obligations and the cause thereof. A Party
whose obligations have been suspended as aforesaid shall resume the
performance of such obligations as soon as reasonably practical after the
removal of the Force Majeure and shall notify the other Party accordingly.”

                                                                                                                                                                                                                                                                                                                           
I.  Genel  olarak  
MADDE   136-­‐   Borcun   ifası   borçlunun   sorumlu   tutulamayacağı   sebeplerle  
imkânsızlaşırsa,  borç  sona  erer.  
Karşılıklı   borç   yükleyen   sözleşmelerde   imkânsızlık   sebebiyle   borçtan   kurtulan  
borçlu,   karşı   taraftan   almış   olduğu   edimi   sebepsiz   zenginleşme   hükümleri  
uyarınca  geri  vermekle  yükümlü  olup,  henüz  kendisine  ifa  edilmemiş  olan  edimi  
isteme  hakkını  kaybeder.  Kanun  veya  sözleşmeyle  borcun  ifasından  önce  doğan  
hasarın  alacaklıya  yükletilmiş  olduğu  durumlar,  bu  hükmün  dışındadır.  
Borçlu   ifanın   imkânsızlaştığını   alacaklıya   gecikmeksizin   bildirmez   ve   zararın  
artmaması   için   gerekli   önlemleri   almazsa,   bundan   doğan   zararları   gidermekle  
yükümlüdür.  
   
Hardship  clause  is  a  clause  in  a  contract  that  is  intended  to  cover  cases  in  which  
unforeseen   events   occur   that   fundamentally   alter   the   equilibrium   of   a   contract  
resulting   in   an   excessive   burden   being   placed   on   one   of   the   parties   involved.  
(also   called   Changes   in   circumstances,   unforeseen   events,   termination   clause,  
exoneration  clause.)  

Sample  Clauses  

Economic Change: “In case fundamental change in economy of the

Contract which render its execution uneconomical or much more burdensome
than it was originally expected, the Parties will enter into negotiation to
replace them in the same situation as it was at the time of conclusion of the
Contract.”

Changes in Circumstances: “In the event of unforeseeable events or

events which were excluded from the Parties’, forecasts, including any
substantial changes to taxes and duties, which could have the effect of
undermining the economic basis of the existing market or prejudice the
Parties, the Parties shall come to an agreement, in the spirit in which the
present agreement was concluded, to make the necessary adjustments so as to
replace one or the other provisions of the present contract under the
conditions of balance comparable to those which existed at the time of
entering into the present contract. In the absence of an agreement, the Parties
may refer their dispute to arbitration (as set in article ..)”

Price adaptation: (for contracts on transaction related with energy): “ It is

agreed between the parties that in case significant changes in primary energy
costs, and in particular gas prices would occur and make the electrical power
purchased by the Buyer not competitive towards electrical energy based on
such primary energy, the partners shall find a mutual agreement to adapt the
prices of delivery accordingly such agreement cannot be reached within 2
months, the parties are entitled to refer the matter to arbitration.”

Exonoration Clause: “ If, due to circumstances of an economic, unforeseen,

exceptional or particularly serious nature, occurring after the conclusion of the
Contract and outside control or will of the Parties, the economy of the
contractual relations would be disturbed in such way that the execution of its
obligations would be detrimental towards one of the Parties, the Parties will in
good faith to obtain the most suitable solution in order to continue their
contractual relationship.
If the Parties have not found a mutual agreement within a period of three (3)
months as from the moment of the unforeseen, serious change of the economic
contractual relations, each Party will have the possibility to terminate the
Contract.”
ART. 14 RESOLUTION OF DISPUTES

14.1 Unless otherwise agreed in writing, all disputes arising in connection with the
present Contract shall be finally settled under the Rules of Arbitration of the
International Chamber of Commerce by one or more arbitrators appointed in
accordance with the said Rules.

14.2 An arbitration clause does not prevent any party from requesting interim or
conservatory measures from the courts.

GAPS  IN  THE  MODEL  CONTRACT  

 

1)   F orm   o f   n otification    
 
Model  Contract  refers  to  “notification”  in  various  articles,    however  the  there  is  
no  clarity  with  regard  to  the  form  of  the  notice.  In  commercial  transactions  it  is  
not   rare   that   parties   allege   not   to   have   received   notification   properly,   in  
particularly,   where   notice   is   of   serious  legal  consequence.    Therefore  most  of  the  
times   sales   contracts   provide   detailed   provisions   as   to   how   to   serve   the  
notification.     Article   27,     the   sender   may   rely   on   notice   if   the   notice   is   given   by  
"means  appropriate  in  the  circumstances,  even  though  there  is  a  delay  or  error  
in  the  transmission  of  the  communication".  For  example,  a  fax  which  is  sent  but  
is  not  received.    
 
A  well-­‐drafted  notice  clause  will  avoid  this  problem.70  
 
Every notice to be given under this Agreement (Contract) shall be in writing
and either delivered by hand or sent by facsimile or by registered
[post/airmail]. The address of each party for the service of notices shall be as
set out in this Agreement (Contract) (unless or until that address is changed by
notice given under this clause).

A written notice shall be delivered by hand or sent by pre-paid first class post
or registered post. A correctly addressed notice sent by pre-paid first class post
shall be deemed to have been delivered at the time at which it would have
been delivered in the normal course of the post.
 

2)   O ther  
 

                                                                                                               
70  James  M.  Klotz  
There   are   numerous   other   clauses   missing   from   the   Model   Contract.   These  
include   for   example   acceptance   by   facsimile,   assignment,   "entire   agreement",  
reference   to   agents?   fees,   intellectual   property   provisions,   and   the   myriad   of  
specifics   to   the   various   existing   clauses   which   relate   to   the   subject   goods,   which,  
although   not   vital,   will   greatly   improve   the   likelihood   of   each   party's  
understanding  of  its  rights  and  obligations.71  
 

                                                                                                               
71  ibid.