1. INTRODUCTION
THE PROVISIONS ABOUT GENERAL TERMS AND CONDITIONS are one of the most significant innovations in Turkish Code of Obligations (“TCO”) numbered 6098, which became effective on the date of 1 July 2012. Fundamentally, TCO is based upon the principal of freedom of contract and the principal of personal contract which is prepared by the parties by the way of negotiations and is signed and agreed by the parties through discussion and negotiation of all provisions of the contract. However, the social and economic developments of the new age, have created a necessity of service. Therefore, beside the concept of the personal contract, a new contract type has been appeared. Nowadays, especially the banks, insurance companies, travel and transportation companies, companies which are doing on a business about the durable consumer products, establishments providing a public service, construction companies use standard contracts amended by single handed and unilateral in order to be used in several further contracts regarding the services above mentioned. Therefore, general terms and conditions defined in the article 20 of TCO is a term used for the provisions of aforementioned contract types. The contracts containing the general terms and conditions can be exemplified such as loan agreements of the banks, web-site subscribeagreements, franchise agreements, travel agreements, insurance agreements, printed rental agreements, printed construction agreements, labor agreements. Contracts referring the general terms and conditions, generally are against deficient parties, as per this unfavorable situation, it is required to protect the interest of the deficient party. There were some provisions, even though they are limited and narrow scoped, in regard to the general terms and conditions in the regulations before the effectiveness of TCO1. Moreover, before the effectiveness of the TCO, Supreme Courts’ decisions which are accepted that the judge can interference the contracts containing the general terms and conditions had been observed. However, the abovementioned decisions had been made upon the different legal grounds such as public order, immorality, social justice, principle of good faith. However, the provisions in accordance with the general terms and conditions in TCO have an importance because of the general qualification of the general terms and conditions regulated in TCO, general terms and conditions can be carried out all types of contract relationships provided that there is no contrary provision in the contract. TCO has not made the distinction between the dealer/real person/consumer in regard to general terms and conditions, which are widely carried out until the effectiveness of TCO, upon the relationships where the consumers are part of the contract. Although the practice of the courts is not situated yet, it is anticipated that if the condition of acting as a prudent dealer as per the principle of good faith regulated in the article 2 of Turkish Civil Code numbered 4721 (“TCC”) and principle of bona fides as per the article of 3 of TCC have been fulfilled, provisions of general terms and conditions will also include the dealer. Abovementioned provision of the TCO bears significance in this regard. In this article, the elements of general terms and conditions, control system of general terms and conditions which have a three stage, sanction of being deemed unwritten and samples from practice regarding the implementation process of the general terms and conditions have been addressed.
2. GENERAL TERMS AND CONDITIONS
2.1 Definition
As per the article 20 of TCO it is defined that, general terms and conditions are provisions amended in advance by the draftsman of the contract previously single-handed to be used in several further contracts and they are offered to the other side of contract. In accordance with the definition regulated in TCO and doctrine, the elements of general terms and conditions have been arrayed as below;
- Drafted in advance unilaterally
- To be used in several further contracts
- To be used without giving an negotiation opportunity to the other part of contract
Being general and abstract qualification
Apart from foregoing, for the determination of the general terms and conditions, it is not important that, whether the elements are regulated in the contract or its annex, nor the scope of the elements, type or forms of writing. If the texts of contracts which have the same content are not identical, this situation will also not be taken into consideration during the evaluation process. The provisions regarding that the general terms and conditions negotiated and agreed in the contracts, does not solely disqualify them from being general terms and conditions. Provisions in regard to the general terms and conditions are also carried out the contracts which have been prepared by the persons and establishment who are carrying out the services authorized by law or by the permission of the authorities regardless of their qualifications.
3. THE CONTROL SYSTEM BROUGHT BY THE TCO: THE SANCTION OF BEINGDEEMED UNWRITTEN
TCO provides a control system regarding the general terms and conditions through a three gradual system. These are, respectively; operation, interpretation, and content control.
3.1. Operational Control
TCO, seeks;
- An opportunity to the counter party in order to obtain information in regard to the content of the elements by the way of sharing or explaining the content,
Counterparty’s will on implicating the general terms and conditions to the contract (accepting them prepensely and willfully),
in relation with these terms. With the presence of these two elements, general terms and conditions pass the operational control and the general terms and conditions are implicated to the contract’s content. However, in the absence of these elements, these terms and conditions would be deemed to be unwritten.
For instance, in case that abovementioned elements cannot be met, if there is a provision of penalty clause regulated unilaterally in the contract against to the counterparty of the contract, the penalty clause would be deemed unwritten, unless the issuing party proves that he/she informed the other party about this provision and provide the debriefing opportunity. However, the general terms and conditions which are against the qualification of the contract and the characteristic of the work will be also deemed unwritten. For instance, in a contract entered into with the bank for the establishment of a drawing account, the provision of the mentioned contract which obliges the customer to have a credit card through the general terms and conditions can be deemed unwritten for the reason that the provision violates the purpose of the contract. In such circumstance, the provisions apart from the general terms and conditions which are deemed unwritten, shall preserve its validity and binding.
3.2. Interpretation Control
In the event of that, the general terms and conditions which become the content of the contract after passing the operational control are regulated vaguely, the general terms and conditions shall be subject to the interpretation control; then it shall be interpreted against to the party who prepared the terms and conditions, and also be interpreted in favor of the party which the terms and conditions have been presented. If the unfair situation caused by the general terms and conditions can be resolved by the interpretational control, the content control explained below will not be invoked. In accordance with the article of TCO, in order to implement an interpretational control, the conditions should not be clear and understandable or should have more than one meaning. In this regard, it is not possible to audit the conditions which are not qualified as interpretational to this type of control. These kinds of conditions can be subject to the content control before the interpretational phase. The personal contract should be given a priority if the parties entered into personal contract, which is alternative to the general terms and conditions. For instance, in case that there is a provision of “commercial interest” in the standard contract that has been crossed out, parties written “legal interest” instead of it, and this statement is signed by the parties, it can be understood that this general term and condition has been negotiated and an alternative personal contract has been agreed on. In such possibility, it should be accepted that, the personal contracts are given a priority.
3.3. Content Control: The Judge’s Discretion
Content control comes up, if it is concluded that the general terms and conditions could not balance the interests of parties through the interpretation control. Content control has been regulated in the article 25 of the TCO. According to this provision, the provisions, which defy the principal of good faith, that are disadvantageous to the counterparty of the contract or aggravate the counterparty’s status cannot be implemented in general terms and conditions. Content control is a control which is carried out as a last resort, because it directly interferes to the freedom of contract. In content control, the control mechanism tool is principal of good faith. The judicial discretion have been vested by the article 25 of the TCO, which is a special implementation of principal of good faith regulated in the article 2 of TCC. The judge will evaluate the concrete case and determine that whether there is a contradiction in principal of good faith or not, and if the judge finds the terms and conditions breach the principal of good faith, aforesaid terms and conditions shall be deemed to be unwritten.
3.4. Prohibition of Amending Disadvantageously
In the article 24 of the TCO it is regulated that in a contract includes general terms and conditions or in another contract, the provision giving authority to the draftsman unilaterally to amend or add general terms and conditions which are against the interest of other party are deemed unwritten. Fundamentally, the concrete general term and condition is being imposed a sanction by the mentioned provision. A general term and condition which gives the opportunity to amend unilaterally disadvantageously the conditions of the contract, will be deemed directly unwritten, without ever being in the process of chain which has been explained above.
4. VALIDATION OF THE GENERAL TERMS AND CONDITIONS
As it is mentioned above, inclusion the general terms and conditions in the scope of the contract, will be dependent on whether the draftsman issuing the contract informed the other party clearly in regard to existence of the general terms and conditions and provided an opportunity to the counterparty regarding learning about the content of the general terms and conditions during the preparation of the contract. Providing information clearly stands out for the counterpartys discovery about the existence of the general terms and conditions by any means. The abovementioned process shall be fulfilled by the way of providing the provisions relevant with the general terms and conditions to the other parties’ domination by printed, visual, auditory and similar ways. Following the aforementioned phase, the counterparty should accept the general terms and conditions. The counterparty’s acknowledgement can be either clear or implicit. Briefly, the party amending the contract, in order to make the general terms and conditions valid and executable, should be able to prove that he/she has fulfilled the obligation of informing the other party and provided an opportunity to obtain an information by the way of sharing and explaining the content of the general terms and conditions and the counterparty acknowledged the general terms and conditions knowingly and willfully. Because of there is no special method identified in the TCO and the Supreme Court decisions are still not formed regarding the manner in which the mentioned process shall be fulfilled, in practice the given conditions are being tried to be overcame by the methods mentioned below:
4.1. The Opportunity to Inform Clearly and Learning the Contents About the Existence of the Standard Terms
The party who issues/uses the contract and wants to include the general terms conditions into the contract, should inform the counterparty clearly in regard to the existence of general terms and conditions. In this respect, all kinds of notification methods which provide the opportunity for counterparty to learn the existence of the general terms and conditions are valid. The burden of proof which is in regard to the knowledge of the counterparty about the general terms and conditions is on the party who issues/uses the contract. The knowledge in regard to the existence of the printed general terms and conditions gen - erally occurs by the way of the party who issues the con - tract to hand in the copy of the contract before a specific and reasonable time to the other party in order to examine the general terms and conditions. In the event of possi - ble dispute, in order the prove that the relevant informa - tion has been provided, it would be suitable for all this to be kept under written proceedings. Generally, in practice, the party issues/uses the contract takes the countersign of the other party on the remaining copy of contract which also includes the statement of “I received in person of this copy” and also includes the date, name, last name. The user who provides information clearly to the counter - party regarding the general terms and conditions should also provide the opportunity for counterparty to learn the content of these. There is no explanation in the law text or in its preamble regarding this respect. Solely, what is meant here is thought as that, the mentioned provisions entrance in different forms such as printed, visual, auditory copy and so on to the other party’s dominance. However, the party issuing/using the contract should be able to answer the questions of the other party concerning the contract. Therefore, the contact information of the issuing party should be presented, and if the contract shall be accepted on online platforms, access to the contract should be pro - vided all the times. In the contracts which are accepted on online platforms, in practice, issuers of the contracts are trying to prove that they fulfilled the obligation of inform - ing the other party concerning the existence of the gen - eral terms and conditions by setting up systems which will make the contract stay on the screen for a length of time automatically and necessarily before the acceptance of the contract which have been published on the web-site.
4.2. Acceptance of the Other Party Knowingly and Willingly
The party which the contract has been presented must ac - cept the contract within a reasonable time upon the pro - viding an opportunity of examine the contract within the scope of all the financial, commercial and judicial matters. There is no specific regulation in the law text or law’s pre - amble with respect to how the acknowledgement shall be made. In such case, the acceptance of the other party can be either clear or implicit (tacit). Regarding to the fulfillment of mentioned obligation, “contract informing and assessment forms” (providing that a reasonable time provided before the countersign of the contract) are being issued in practice. Provisions which can be detriment of the other party are precondi - tioned with large fonts and separated in aforementioned forms. In addition to this, in the aforementioned forms, there are some records regarding the matters that the contract comprises unilateral provisions, the other party can evaluate the pro - visions with its judicial and financial results, if necessary by the way of obtaining an expert opinion and the other party has accepted the unfavorable provisions knowingly and willingly. Accordingly, the fulfillment of the mentioned obligation is trying to be proved by making the other party sign the aforementioned forms about accepting the provisions in the contract knowingly and willingly.
5. CONCLUSION
General terms and conditions is an area which is widely used and implemented for many years in our country and it was largely remained uncon - trolled field within the scope of judicial way. The general terms and conditions have been regu - lated generally for the first time in our law by the acceptance of the TCO. In this respect, the legis - lator has benefited from the international regu - lations and also the comparative law. In conclu - sion there is a three staged control system that came up, and it is understandable that the basic principle of this system is to interfere with the freedom of contract in minimum, and to resolve the contractual injustice. However, this issue has just been regulated, and there is a gap on judicial decisions regarding this field, the judicial decisions will provide guidance in time, especially in the field of general terms and conditions by drawing the limits of princi - ple of good faith. At this stage, drawing from the information above, it is important for the issuing party to provide information to counterparty, provide opportunity for debriefing and fulfill the obligation of negotiation of the unfavorable pro - visions in order to remove/mitigate the risk of provisions which are qualified as general terms and conditions, to be considered as unwritten.
FOOTNOTE
1 Such as; Article 6 of Consumer Protection Law numbered 4077, Article 24 of Bank Cards and Credit Cards Law numbered 5464.
