Contracts are the most important legal tool in the business world. Every person, either real or legal, dealing with business, should have a relation with other persons who are dealing with business. The best way to regulate these relations and even to start these relations is to conclude a contract.

Code of Obligations is formed of two main parts, “general provisions” and “specific types of contracts”. In the general provisions part, the concept of obligation, sources of obligation, conclusion of contracts, form of contracts, simulation, defective intentions, agency, tort, unjust enrichment, performance of an obligation, non-performance, default of the debtor and the creditor, special modalities of an obligation and discharge of obligations are regulated. In the specific types of contracts part, different types of contracts are regulated in detail.

Law of obligations is the branch of civil law particularly concerned with the relations that create obligations.

1. Creditor

2. Debtor

3. Consideration

a. Positive consideration and negative consideration

b. Divisible consideration and indivisible consideration

c. Personal consideration and material consideration

d. Recurring consideration and non-recurring consideration

1. Contracts
2. Torts
3. Unjust Enrichment

First of all there must be  a positive act or  an act of omission. Secondly this act must be an unlawful act. Thirdly the person who is committing this unlawful act should have fault. Fault is either a willful act or a negligent act. For a person to have fault, being able to make fair judgments is a necessity. Fourthly there must be damage.  Lastly, for tortuous liability the damage must be result of the unlawful act.

It is a gain acquired in an unjustifiable manner out of the property of another person.

Declaration of intention

1. Unilateral legal transactions

2. Bilateral legal transactions

3. Decisions (Multilateral legal transactions)

Contracts

A contract is a bilateral legal transaction concluded by a mutual exchange of assent of two or more persons.

An offer is a declaration of intention by one party, known as the offeror, whereby he/she expresses his/her willingness to enter into a contract. Offer is the first intention that is declared and aimed to conclude a contract.

An offer must be definite and certain. The offer must, with no doubt, include all the essential terms of the contract. In order to conclude a contract, the offer should very clearly include all the essential terms of the aimed contract.

If a person declares an intention without having the purpose of being bound with it, or if the declaration does not include all the requisites, it is named as an “invitation to an offer”. Invitation to an offer is not binding.

They are the terms that determine the type of the contract. Without the essential terms it is not possible to conclude a contract. By taking essential terms into consideration it is possible to differentiate the type of the contract.

In both of them the consideration is a good and the aim is to transfer the ownership of this good. But in donation there is only one consideration and no sales price. On the other hand the considerations in the sales contract are mutual considerations.

Where an offer is declared in the presence of the offeree and no time limit for acceptance is set, it is no longer binding on the offeror unless the offeree accepts this offer immediately.

In equal bilateral contracts, there are mutual promises between the two parties and they involve an exchange of equivalent mutual obligations. Examples to equal bilateral contracts are sales contract, rental contract and employment contract. On the other hand, in unequal bilateral contracts, the parties are both under an obligation, but their obligation is not mutual, and in other words one obligation is not exchanged for the other. Contract of agency and loan contracts can be given as examples.

This type of form consists of two elements: the text part and the signature part. The text can be written by any kind of device. But the signature should be either handwritten or it should be signed by way of secured electronic signature. All persons on whom the contract imposes obligations should sign the contract.

1. Freedom to enter into a contract

2. Freedom to choose the other party of a contract

3. Freedom of form

4. Freedom to withdraw a contract

5. Freedom to choose the type and subjectmatter of a contract

In relative simulation, parties want to enact a contract, but they do not want others to understand the type of their contract. Therefore they hide the contract they have actually concluded behind a fictitious contract. First, the parties make a simulation agreement, and then they conclude the real transaction, in other words the hidden transaction. 

1. The obligation should be due
2. The creditor has to draw a notice (formal reminder)

Novation: It constitutes a new obligation in the place of an old one. The preexisting obligation is discharged and a new obligation is created. The parties should conclude an agreement and in this agreement the intention of novation should be clearly stated. Unless the parties clearly agree, a new receivable bill or a new surety bond issued shall not be deemed as novation. Registration of various items into a revolving account also does not mean novation of the debt.