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Turkey’s 85-year-old Law of Obligations has been amended in record time by Parliament, which approved the new act Tuesday.
The text of the law, consisting of 649 articles and 22 chapters, was approved in the short period of time with all political parties agreeing on it, Anatolia news agency reported. Each chapter of the law consists of 30 articles.
A dramatic change in the law involves the protection of the individual against pre-prepared, abstract and ex parte contracts, such as those prepared by banks and insurance companies. According to the changes, the party that prepares the contract will have to properly inform the individual and get explicit approval about conditions that run contrary to the interests of the individual. If this rule is not served, any specific conditions of a given contract that harm the individual will be nullified.
Moreover, if any section of such a uniform contract is not clear, or open to being interpreted in a number of different ways, it will have to be interpreted according to the interests of the party who signs the contract, not the party that has prepared the contract.
Another clause could mean that home loan borrowers sunk in debt because of the appreciation of the Japanese Yen and the Swiss Franc might be saved. According to this clause, under “extraordinary conditions,” such as an economic crisis, contracts may be modified if they “unexpectedly hurt the interests of debtors.” This clause could be applied for foreign currency loans, according to press reports released Wednesday.
Debtors will also be protected against “extraordinary interest rates.” The annual interest rate decided upon by parties will not exceed 1.5 times the legal interest rate cap. Default interest rates will not exceed two times the legal interest cap.
A key change in the law involves technology, as it stipulates that "secure e-signatures" may be used in contracts. Such signatures will bear the same results as a regular signature, according to the new law.
The Law of Obligations will come into effect after President Abdullah Gül approves it and it is published in the Official Gazette.
The text of the law, consisting of 649 articles and 22 chapters, was approved in the short period of time with all political parties agreeing on it, Anatolia news agency reported. Each chapter of the law consists of 30 articles.
A dramatic change in the law involves the protection of the individual against pre-prepared, abstract and ex parte contracts, such as those prepared by banks and insurance companies. According to the changes, the party that prepares the contract will have to properly inform the individual and get explicit approval about conditions that run contrary to the interests of the individual. If this rule is not served, any specific conditions of a given contract that harm the individual will be nullified.
Moreover, if any section of such a uniform contract is not clear, or open to being interpreted in a number of different ways, it will have to be interpreted according to the interests of the party who signs the contract, not the party that has prepared the contract.
Another clause could mean that home loan borrowers sunk in debt because of the appreciation of the Japanese Yen and the Swiss Franc might be saved. According to this clause, under “extraordinary conditions,” such as an economic crisis, contracts may be modified if they “unexpectedly hurt the interests of debtors.” This clause could be applied for foreign currency loans, according to press reports released Wednesday.
Debtors will also be protected against “extraordinary interest rates.” The annual interest rate decided upon by parties will not exceed 1.5 times the legal interest rate cap. Default interest rates will not exceed two times the legal interest cap.
A key change in the law involves technology, as it stipulates that "secure e-signatures" may be used in contracts. Such signatures will bear the same results as a regular signature, according to the new law.
The Law of Obligations will come into effect after President Abdullah Gül approves it and it is published in the Official Gazette.
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