[email protected]

January 20, 2013, Sunday

‘My word is my bond’: Verbal agreements under Turkish law (2)

In the first part of this article I mentioned the difficulties in making an agreement in a foreign country and what should be taken into consideration when making a contract in Turkey.

Since expats in Turkey usually form agreements on property-related matters, the framework of the article is almost limited to property-related matters. As I wrote in the first part of this article, the most important thing when buying real estate in Turkey is to deal with a good real estate agent. A good agent and good legal services will always protect you and your investment.

The second most important thing, regardless of whether you are or aren't dealing with a solid real estate agent and/or a solid law firm, is that when you get into such agreements, you should first make sure that both parties are subjected to a kind of penalty clause in case of not honoring the contract. In order to do so, you should at least have a simple agreement with the other party. You should push for at least a simple written agreement.

Under Turkish law, agreements are not subjected to form requirements unless otherwise stated by the law. For instance, a promise to sell a property agreement must be concluded before a notary public, else it will not be valid. This is a form requirement according to the Turkish Code of Obligations.

My opinion is that a mixed agreement should be subjected to the form requirement in case one of the agreements is subject to a form requirement. Otherwise, the validity of the agreement would only be partially limited to the features which do not require special forms. This would result in the construction part of the agreement to be valid while the promise to sell portion might be invalid.

As I mentioned at the beginning, there is no general form requirement under Turkish law and what you have agreed to with a seller/contractor should be pursuable before a court, but if you have not followed the form requirement, it will be a very difficult case. In addition, since you don't have anything signed by the contractor, you don't have any written proof. If you have received a receipt for the deposit paid, it might be considered as evidence for your claims.

The only result which would be worth pursuing a case for would be forcing the contractor to build the house and transfer the title to you. However, based on actual circumstances, I would say that it would be very difficult to achieve that.

The next time you make an agreement with a seller, please do not forget to include a penalty clause against any withdrawals. Please also remember that once you ask for a penalty clause, the other party will also request for an implementation of penalties reciprocally.

Finally, it is always good to check with your lawyer if there are any form requirements which you should fulfill when you are signing an agreement. This will secure your rights and you will have a solid case to defend in the event of a dispute.

NOTE: Berk Çektir is a Turkish lawyer and available to answer questions on the legal aspects of living and doing business in Turkey. Please send inquiries to [email protected] If a sender's letter is published, names may be disclosed unless otherwise expressly stated by the sender.

DISCLAIMER: The information provided here is intended to give basic legal information. You should get legal assistance from a licensed attorney at law while conducting legal transactions and not rely solely on the information in this column. 

Previous articles of the columnist