LAW 519 BUSINESS LAW. Prof.dr.huriye kubilay 2013 sprIng semester. SUBJECTS. Fundamental Concepts of Obligations Law Contractual Obligations ( Establishment of a contract ) Contractual Obligations ( Requirements of a contract ) Various kinds of contracts
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Substantive Law deals with the different ways people interact. Law adressed to actions and relationships among people is substantive law.
Public Law – Private Law
Thesystem of codifiedlawthatobtains in most of Europe, South America, andelsewhere is known as civillaw,
in contrasttothecommonlawsystemthatapplies in England, formerBritishcolonies, the United States, andmost of Canada.
Contract is a legal relation between two parties formed by the concurring declarations of their wills.
DECLARATION OF WILL OF A PARTY THAT GIVES RISE TO A CONTRACT IS CALLED THE OFFER AND IT CONSTITUTES THE INITIAL MOVE. A CONTRACT IS CONCLUDED WHEN THE OFFER MADE BY ONE PARTY (THE OFFERER) IS ACCEPTED BY THE OTHER PARTY.
OFFERAn offer is a declaration of will (intention) by the offerer, communicated to the offeree, whereby he declares his willingness to enter into a contract with a specified content and under certain terms.
Offer, as a rule, is made to a specific person. But, it is also possible to direct an offer to persons whose identity is not yet specified, that is to say to the general public.
INVITATION TO TREAT/OFFERA declaration, carries merely the purpose of attracting the attention of the interested people and inviting them to make offers in case they care to enter into a contractual relation.
THE BINDING EFFECT OF THE OFFEROffer is the initial step towards creating a contractual relation and it grants the offeree right to conclude the contract by making an acceptance.
When the promise of a gift is accepted by the promisee, there will be a unilateral gift contract.
For example, an agency contract without remuneration or a loan contract without interest or loan for use. In the latter, the borrower of the loan has only the obligation to return what he has borrowed, whereas the other party has no counter obligation to fullfill.
Perfect bilateral contract is a contract where the parties exchange their promises. In other terms, a bilateral contract or a synallagmatic (reciprocal) contract is a contract in which both parties undertake reciprocal duties which are enforceable by law. For example, in the case of a sales contract related to a real property (land), the seller promises to convey the title of the land and the buyer promises to pay the sale price.These are mutual promises and principal obligations of the parties.
Capacity to act means an ability to acquire rights and incur liabilities (TCC. Art.9).
Capacity to act should be distinquished from the capacity to enjoy civil rights (TCC. Art.8).
Under Turkish Law, every person, even an unborn child is subject to enjoy civil rights; provided that he’s born alive, but not every person should necessarily have the capacity to act.
The contract entered into by a mentally disordered person is null and void (TCC Art.15). A person deprived from power of will, cannot create a contract. A contract entered into by an incapable person cannot be converted into a valid contract even with the approval of his/her legal representative.
Minors and interdicted persons have limited incapacity to act if they are subject to make fair judgement. They need the consent of approval of their legal representative (parents or legally appointed guardian) (TCC, Art.16).
The contract entered into by a person of limited incapacity is not bound while the other party is bound with the contract. The validity of the contract is in suspension, until ratification or refusal of ratification of the legal representative.
Every obligation should have a cause behind it.This cause may be causa credendi, causa solvendi or causa donandi.The validity of a contract depends on the “validity of the cause”. It means that the contract is valid when the parties agree on a valid legal ground.
Under Turkish Law, the transfer of immovable is always admitted as causal.
A contract may be effective even if the cause is not valid.
This theory has been evolved to maintain the validity of a contract and to ensure the commercial security in business practice. Under the “abstract transaction theory”, transfer of title will be valid even the contract creating the obligation of transfer is void.
Thesubjectmatter of a contract is a promise/an undertakingfor a promise.
Thecreditormay ask his debtortogivesomething, to do an actortorefrainfromdoing a specificact. Unlessprohibitedbylaw, thesubject of thepromisemay be a tangibleobject, somethingthat can be touchedorthatoccupies a space, such as movablesorrealpropertyor an intangibleobjectsuch as aright of creditor an intellectualandindustrialrightsuch as patentsandinventions.
A personcausingdamagetoanotherpersonintentionallyorbynegligenceby an actagainstthelawshall be obligedtocompensatethedamage. A personcausingdamagetoanotherpersonby an intentionalactagainstthemoralsshallequally be obligedtocompensate it.
Theterm “tort” (unpermittedactions) refersto a violation of a civillawrule of conductcausinginjurytoanotherperson. Thepersonwhoseunlawfulconductresultsinjurytothevictim is defined as “tortfeasor”. He is theonewhocommits a tortiousact.
Anypersonwho is deprived of his individualright in an unlawfulmanner can demandforthetortfeasorreperation of his damages. Thevictim (plaintiff) is thepartywho has sustained an injuryto his personorproperty. He can bring a tortactionagainstthetortfeasor (defendant) torecievecompensation. Thegoal of TortLaw is toassignfinancialliabilitytothetortfeasorfor his tortiousconductthat has resulted in injuryorlostto an individualpersonor his property.
A personwhoacquiressomething at theexpense of anotherwithoutany legal groundshall be requiredtoreturn it.
Unjustenrichment is thegain of a personfromtheproperty (assets) of anotherwithouthavingjustifiablegrounds. An unjustenrichmentcreatesthedutytoreturn. Anyperson, who has, in an unjustifiablemanner, becomesricherbyreceiving a gainout of property of another, is boundtoreturn.