7 Essential Aspects of Sales Agreements in Turkey

Sales agreements in Turkey are governed by a complex legal framework, including the Turkish Code of Obligations and Commercial Code. These contracts require careful consideration of essential elements such as offer and acceptance, capacity to contract, and legal purpose.

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As a leading law firm in Istanbul, Akkas & Associates has been providing expert legal services since 1992. In this comprehensive guide, we’ll explore the critical aspects of sales agreements in Turkey, offering valuable insights for both domestic and international businesses operating in the Turkish market.

Understanding Sales Agreements in Turkey

A sales agreement is defined under Article 207 of the Turkish Code of Obligations as a contract in which the seller agrees to transfer possession and ownership of a good to the buyer in exchange for a price. The agreement outlines the obligations of both parties, emphasizing that unless otherwise specified, both the seller and buyer must perform their obligations simultaneously.

Key Elements of a Sales Agreement

1. Identification of Parties: The agreement must clearly identify the seller and buyer, including their legal capacities.
2. Description of Goods: A detailed description of the goods being sold is essential. This includes specifications such as quantity, quality, and any relevant characteristics.
3. Price: The sales price must be explicitly stated. It can be determined based on the situation and circumstances surrounding the sale.
4. Obligations: The obligations of both parties should be clearly defined. For instance, the seller must deliver the goods in conformity with the contract, while the buyer is obligated to pay the agreed price.
5. Risk Transfer: Article 208 outlines how risk is transferred from the seller to the buyer, typically occurring upon delivery unless stated otherwise.

Types of Sales Agreements

Sales agreements can be categorized into various types based on the nature of goods and transaction contexts:

• Movable Property Sales: Governed by Articles 209 to 236 of the Turkish Code of Obligations, these agreements cover tangible items such as machinery or vehicles.
• Immovable Property Sales: Articles 237 to 246 address sales involving real estate. These agreements require additional formalities, including notarization and registration at the land registry to be legally binding.
• Preliminary Sales Agreements: Often used in real estate transactions, these agreements allow parties to agree on terms before finalizing a sale. They are particularly common for properties under construction.
• Distance Sales Agreements: Applicable for online transactions, these contracts are regulated under consumer protection laws and require specific disclosures to buyers.

Navigating sales agreements in Turkey

Navigating sales agreements in Turkey requires an understanding of both general principles and specific legal requirements. Whether dealing with movable or immovable properties, it is essential for parties to engage in thorough due diligence and seek professional legal advice when drafting or entering into sales contracts.

1. Legal Framework Governing Sales Agreements in Turkey

Sales agreements in Turkey are primarily governed by the Turkish Code of Obligations (TCO) and the Turkish Commercial Code (TCC). These legal frameworks provide the foundation for contractual relationships and commercial transactions in the country.

The TCO, which came into effect in 2012, outlines the general principles of contract law, including formation, performance, and termination of contracts. It also specifies the rights and obligations of parties involved in sales transactions.

The TCC, on the other hand, focuses on commercial transactions and provides specific regulations for business-to-business (B2B) sales agreements. It addresses issues such as delivery terms, payment conditions, and warranties in commercial sales.

2. Essential Elements of a Valid Sales Agreement

To ensure the enforceability of a sales agreement in Turkey, certain essential elements must be present:

1. Offer and Acceptance: There must be a clear offer made by one party and an unequivocal acceptance by the other party.
2. Capacity to Contract: Both parties must have the legal capacity to enter into a contract.
3. Consideration: There must be a valid exchange of value between the parties.
4. Legal Purpose: The object of the agreement must be lawful and not contrary to public policy.
5. Consent: Both parties must enter into the agreement voluntarily and without duress or undue influence.

It’s crucial to note that while oral agreements are generally valid in Turkey, written contracts are strongly recommended for evidentiary purposes and to avoid potential disputes.

3. Key Provisions in Turkish Sales Agreements

When drafting or reviewing a sales agreement in Turkey, consider including the following key provisions:

1. Detailed Description of Goods or Services: Clearly define the products or services being sold, including specifications, quantity, and quality standards.
2. Price and Payment Terms: Specify the price, currency, payment method, and payment schedule.
3. Delivery Terms: Include details on delivery method, timeframe, and responsibility for shipping costs and risks.
4. Warranty and After-Sales Service: Outline any warranties provided and the terms of after-sales support.
5. Intellectual Property Rights: Address any relevant IP rights, especially in technology or software sales.
6. Confidentiality Clauses: Include provisions to protect sensitive business information.
7. Dispute Resolution: Specify the method for resolving disputes, such as arbitration or litigation, and the applicable law.

4. International Sales Agreements and CISG Application

For international sales transactions, it’s important to consider the United Nations Convention on Contracts for the International Sale of Goods (CISG). Turkey is a signatory to the CISG, which provides a uniform framework for international sales contracts.

The CISG automatically applies to contracts for the sale of goods between parties whose places of business are in different contracting states, unless expressly excluded by the parties. It governs the formation of the contract, the rights and obligations of the seller and buyer, and the remedies for breach of contract.

When drafting international sales agreements involving Turkish parties, it’s crucial to decide whether to apply or exclude the CISG and to explicitly state this choice in the contract.

5. Consumer Protection in Sales Agreements

The Turkish Consumer Protection Law provides additional safeguards for consumers in B2C (business-to-consumer) sales agreements. Key aspects include:

1. Right of Withdrawal: Consumers have the right to withdraw from distance sales contracts within 14 days without providing a reason.
2. Warranty Obligations: Sellers must provide a minimum two-year warranty for durable consumer goods.
3. Unfair Contract Terms: The law prohibits unfair terms in consumer contracts that create a significant imbalance in the parties’ rights and obligations.
4. Information Obligations: Sellers must provide clear and comprehensible information about the goods or services, including price, payment terms, and delivery conditions.

Businesses engaging in B2C sales in Turkey must ensure their agreements comply with these consumer protection regulations to avoid potential legal issues.

6. E-Commerce and Digital Sales Agreements

With the rise of e-commerce, digital sales agreements have become increasingly important in Turkey. The Turkish E-Commerce Law, enacted in 2015, regulates online commercial activities and provides a framework for digital contracts.

Key considerations for e-commerce sales agreements include:

1. Information Requirements: E-commerce service providers must display certain information on their websites, including their trade name, address, and contact details.
2. Order Confirmation: Sellers must confirm orders electronically without delay.
3. Data Protection: E-commerce businesses must comply with Turkish data protection laws, including obtaining consent for data processing and implementing appropriate security measures.
4. Electronic Signatures: The Turkish Electronic Signature Law recognizes the validity of electronic signatures, which can be used to conclude sales agreements online.

7. Dispute Resolution and Enforcement

In case of disputes arising from sales agreements, Turkish law provides several resolution mechanisms:

1. Litigation: Disputes can be resolved through the Turkish court system, with commercial courts handling most business-related cases.
2. Arbitration: Turkey is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, making arbitration a viable option for international disputes.
3. Mediation: The Turkish Mediation Law encourages the use of mediation as an alternative dispute resolution method.

For foreign judgments to be enforced in Turkey, they must go through a recognition and enforcement process in Turkish courts. Similarly, foreign arbitral awards must be recognized by Turkish courts before they can be enforced.

Legal Implications

Sales agreements in Turkey carry significant legal weight. A well-drafted agreement ensures enforceability and protects both parties’ rights. Failure to comply with contractual obligations can lead to legal disputes, where remedies may include damages or specific performance.

Formal Requirements

For immovable property sales, contracts must be executed before a notary public to ensure validity. This requirement protects against fraud and ensures that all legal stipulations are met. Additionally, registration at the land registry is crucial for asserting ownership rights against third parties.

Contact us for Sales Agreements in Turkey

Navigating the complexities of sales agreements in Turkey requires a thorough understanding of the legal framework, key contractual provisions, and specific regulations governing different types of sales transactions.

Whether you’re a domestic business or an international company operating in Turkey, it’s essential to draft comprehensive and compliant sales agreements to protect your interests and ensure smooth commercial operations.

At Akkas & Associates Law Firm, our experienced team of legal professionals specializes in commercial law and can provide expert guidance on drafting, reviewing, and negotiating sales agreements tailored to your specific business needs in the Turkish market. Contact us today to ensure your sales agreements are robust, compliant, and effectively protect your business interests in Turkey.