Download FIN 240 - Class 1

LAW OF OBLIGATIONS
I.
General Points
II. Sources of Obligations
A. Contract (Sözleşme)
B. Tort (Haksız Fiil)
C. Unjust Enrichment (Sebepsiz Zenginleşme)
General Points
A. Turkish Code of Obligations
1. Supplementary part of Turkish Civ. Code
2. Had major revisions in early 2011
B. Characteristics of an “Obligation”
1. Legal tie that creates a relationship
2. Creates a duty and corresponding right
Source of Obligations: Contract
*Contract = agreement that creates legally enforceable obligations
A. Principal of Freedom of K
B. Formation of Valid K
C. Representation
D. Enforceability of Ks
E. Termination of Ks
Principal of Freedom of K
1. Freedom to enter (or not enter) K
2. Freedom to choose K partners/parties
3. Freedom to establish terms of K
Formation of Valid K
1. Genuine Agreement/Assent
A. Offer (icap) and Acceptance (kabul)
1) Offer - definite; revocable
2) Acceptance - methods; match offer
B. When is “genuine assent” absent?
1) Mistake
2) Duress
3) Fraud
2. Capacity to K (full capacity presumed)
Limited Capacity = K voidable by minor,
and/or legal representative
Full Incapacity = K is void; no legal effect
3. Legality of Subject Matter
Illegal Subject Matter = K is void; no effect
4. Legal Form (if required)
Formalities Generally Not Req’d (even oral
and implied agreements are recognized)
Statutory Exceptions (don’t comply = void)
- Motor Vehicle Transfers
- Real Estate Ks (sale, lease, other rights)
- Suretyship Agreements
- Legal Representation in Court
Representation (Agency)
1. Parties – Principal, Agent, 3rd Parties
2. Agent Acting w/in Scope of Authority?
- Preliminary Authorization (K?)
- Subsequent Ratification
3. Statutory v. Contractual Representation
- Statutory = Law defines A’s power/liability
- Contractual = K defines A’s power/liability
* Some (but not all) such Ks must be in writing
Enforceability of Ks
1. Valid – enforceable; material breach
would be grounds for lawsuit
2. Voidable - enforceable, but may be
challenged by either party
(due to mistake, capacity
issue) and ultimately voided
3. Void - no legal effect (due to illegality,
fraud, incapacity, duress, lack of
proper formality)
Termination of Ks
1. Parties perform their obligation(s)
2. Mutual agreement (e.g. release, novation)
3. Impossibility of Performance
4. K is voided from:
- Inception (e.g. successful claim of fraud,
mistake, limited capacity), OR
- A later point (e.g. unforeseen difficulty,
K provision, party default)