What Are Standard Terms and Conditions?

The Period before the Code of Obligations No. 6098

General terms and conditions in comparative law

The view has become widespread in most legal systems that intervention is required in respect of standard terms and conditions, namely contractual terms all of whose provisions are drafted by one party as it wishes, and in particular to its own advantage, and which are generally imposed on consumers, who are usually in a weaker position; as a result, provisions on the review of standard terms and conditions have been introduced into legal systems.

To this end, special laws have been enacted in some countries to protect individuals, and consumers in particular, against standard terms and conditions imposed by the stronger party, the business. For example, in Germany the Standard Terms and Conditions Act[1] was brought into force, introducing possibilities such as requiring that general terms and conditions be easily readable even by an ordinary consumer, and treating terms as invalid where they are imposed in advance[2]. In Switzerland, by contrast, standard terms and conditions are not regulated by special legislation as they are in Germany. The review of the content of standard terms and conditions has been framed within competition law in relation to the Swiss Code of Obligations. Article 8 of the “Federal Act against Unfair Competition” provides that “the use of standard terms and conditions contrary to equity constitutes unfair competition”, and an attempt has been made to resolve this problem within the framework of competition law.[3]

Review under the Code of Obligations No. 818

Under our Code of Obligations No. 818, there were no provisions relating to general terms and conditions. The review of the content of general terms and conditions was carried out under the “principle of abuse of rights” in Article 2 of the Civil Code (CC) or under the general provisions stating that they must not be contrary to personality rights, morality, decency or public order (CO Arts. 19-20). Subsequently, albeit limited to consumers, amendments were made to the Law No. 4077 on the Protection of Consumers by Law No. 4822 dated 6.3.2003. Article 6 of that Law was worded as follows: “Contract terms placed unilaterally in the contract by the seller or provider without negotiation with the consumer, which cause a significant imbalance to the detriment of the consumer in the parties’ rights and obligations arising from the contract, contrary to the rules of good faith, are unfair terms. Unfair terms contained in any contract to which the consumer is one of the parties are not binding on the consumer.”[4]

Definition and Elements of Standard Terms Under the TBK

Standard terms and conditions are regulated in Articles 20-25 of Turkish Code of Obligations No. 6098. The first paragraph of Article 20 TCO sets out the definition, elements and scope of application of standard terms and conditions.

The text of the law provides: “Standard terms and conditions are contractual provisions which, when a contract is concluded, the drafting party has prepared unilaterally and in advance for the purpose of using them in a large number of similar contracts in the future, and presents to the other party. Whether these terms appear in the text of the contract or in an annex to it, and their scope, typeface and form, are of no significance for their characterisation.

The fact that the texts of contracts drawn up for the same purpose are not identical does not prevent the provisions contained in those contracts from being regarded as standard terms and conditions.

Statements in a contract containing standard terms and conditions, or in a separate contract, to the effect that each of these terms has been negotiated and accepted do not, on their own, cause them to cease to be standard terms and conditions.

The provisions on general terms and conditions also apply, regardless of their nature, to contracts drawn up by persons and organisations providing their services under a permit granted by law or by the competent authorities.” it is regulated as such.

Turkish Code of Obligations, Art. 20

On the basis of this provision, for a contract to contain general terms and conditions, the following elements must be present[5]:

• The contractual terms must have been prepared unilaterally by one of the parties;
• They must have been prepared for the purpose of being used in a large number of similar contracts in the future;
• The contract so prepared must have been presented to the other party.

Concepts in the Definition and Debates in Legal Doctrine

The expression ‘drafter’

Like most definitions in the legal world, Article 20 TCO also contains ambiguity. From the wording of the law, the term ‘drafting party’ might be taken to mean that, for a contract to contain standard terms and conditions, it must necessarily have been prepared by one of the parties. However, it is evident that accepting this would run counter to the purpose of standard terms and conditions[6]. This terminological ambiguity has been widely debated in legal doctrine. The term ‘user’ has been preferred to ‘drafting party’, resulting in a usage that better fits the purpose and spirit of standard terms and conditions[7]. In our view, too, using the terms ‘user’ or ‘presenting party’ instead of ‘drafting party’ would be more consistent with the spirit of the law.

• Drafter
• Kullanan
• Sunan

The expression ‘unilaterally’

The expression ‘unilaterally’ in Paragraph 1 of Article 20 of the TCO also gives rise to confusion as to its meaning. The expression should not be taken to mean prepared without the assistance of anyone; it is noteworthy that it should be understood only as meaning that the relevant terms of the contract were not prepared jointly but were presented to the other party by the party using the general terms and conditions. The crucial point here is whether the free will of the contracting parties is genuinely present, and whether both parties had any involvement in or contribution to determining the content of the contract terms. As we explained earlier, under our legislation, the parties’ socio-economic circumstances and power-balance parameters are of no importance in determining general terms and conditions. In making this determination, the sole criterion is whether one of the parties was able to determine the contract terms unilaterally in advance[8]. The power-balance parameters we have mentioned, and the inequality between the parties’ social and economic circumstances, will be of significance to the judge during proceedings in the review of standard terms and conditions[9].

Intention to use in a large number of similar contracts

In the case of standard terms and conditions created for the purpose of being used in a large number of similar and identical contracts in the future, where they are not in fact used in such contracts in the future, mere actual use does not mean use in a large number of similar and identical contracts in the future. The real nuance here is that the standard terms and conditions are prepared for the purpose of being used in similar and identical contracts in the future and have the content necessary to serve that intended purpose[10] .

Standard-form contracts and the presumption

Standard terms and conditions are not terms negotiated and accepted by both parties sitting down together within the framework of the contractual provisions. On the contrary, they are provisions that the drafting party has prepared unilaterally before the conclusion of the contract and presents to the other party[11]. In practice, this generally takes the form of pre-printed contract annexes. Quite naturally, the drafting party’s aim is to have the other party accept the provisions without discussion or negotiation[12]. The fact that standard terms and conditions, which are generally reproduced in advance by machine and presented to us, are pre-printed should not be understood as a formal requirement. According to the last sentence of the first paragraph of Article 20 TCO, whether standard terms and conditions appear in the text of the contract or in an annex to it, and their scope, typeface and form, will be of no significance for their characterisation. The presentation of any contract in pre-printed form gives rise to a presumption that the contract presented contains standard terms and conditions. However, it is also possible to prove the contrary by means of other arguments. Conversely, although a handwritten contract may give the impression that it is an individually negotiated contract, this does not mean that it will not contain standard terms and conditions[13].

Scope of Judicial Review

Before turning to the judicial review of standard terms and conditions, it is worth noting the following:

Bibliography

[1] The German Standard Terms and Conditions Act (Gesetz zur Regelung des Rechts der Allgemeinen Geschaeftsbedingungen (AGBG)) entered into force on 9 December 1976 and underwent significant amendments twice, on 5 April 1993 and 29 June 2000.

[2] Kılıçoğlu, Ahmet M., Borçlar Hukuku, Genel Hükümler, 16th edn, Ankara, 2012, p.111

[3] Reisoğlu, Safa, Türk Borçlar Hukuku, Genel Hükümler, 23rd edn, İstanbul, 2011, p. 73

[4] Ibid., p. 74

[5] Kılıçoğlu, op. cit., p. 114

[6] Yeniocak, Borçlar Kanunu Hükümlerine Göre Genel İşlem Koşullarının Yargısal Denetimi, TBB Dergisi, 2013, p. 79

[7] Atamer, Yeşim M., Sözleşme Özgürlüğünün Sınırlandırılması Sorunu Çerçevesinde Genel İşlem Şartlarının Denetlenmesi, 2001, 2nd edition, Beta Yayımcılık, Istanbul, 2001, p. 6 (Genel İşlem Şartları)

[8] Yeniocak, op. cit., p. 79; Eren, Fikret, Borçlar Hukuku Genel Hükümler, 14th edition, Ankara 2012, p. 217

[9] Atamer, Yeşim M., Yeni Türk Borçlar Kanunu Hükümleri Uyarınca Genel İşlem Koşullarının Denetlenmesi – TKHK m. 6 ve TTK m. 55, f. 1, (F) İle Karşılaştırmalı Olarak, Türk Hukukunda Genel İşlem Şartları Sempozyumu, Ankara, 2011, p. 61

[10] Yelmen, Adem, Türk Borçlar Kanunu’na Göre Genel İşlem Şartları, Unpublished Master’s Thesis, Ankara 2013, pp. 55-56

[11] Havutçu, Ayşe, Türk Borçlar Kanunu Tasarısının Değerlendirilmesi Sempozyumu, organised by Legal Yayıncılık – Marmara University, Legal HD, Vol. 3, No. 34, 2005, p. 75

[12] Eren, op. cit., p. 219

[13] Yeniocak, op. cit., p. 81

[14] Kocayusufpaşaoğlu, op. cit., p. 227