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International Commercial Contracts
International trade expresses the good and service exchange between real and legal entities which live and reside or have their business centre or common residence in different countries or when they have different nationalities.
The preparation of international commercial (trade) contracts and the necessary components need to be found in it:
- Both parties open ID’s and addresses
- The subject and frame of the contract
- The sales price of the good
- Way of delivery
- Way of payment
- Date of dispatch
- Late fee (punishment)
- Package and way of transport (moving)
- Supervision
- Force major
- Solutions for conflicts
- The law which will be applied
- The date and place the contract was made and how many pages it consists of and the parties names and signatures
The situations which bring forward conflicts the most and the rules of law conflict relating them:
Capacity: In order for any contract to be valid and binding to the parties of it, the parties must have the capacity to be able to make a contract. A contract made with people who do not have a capacity to make a contract or people whose capacity has been restricted is not valid and is not binding. The detection of if or if not real people have a right and a capacity to act or the limitations of this capacity is determined according to the laws of the country of which the real people are nationals or reside in or have customary residency in. On the other hand legal entities’ right and capacity to act is detected according to the countries laws in which the legal entities centre is found or according to the laws of the country it was established in.
Form: A way to prevent potential conflicts in international trade is to make a contract at the beginning which is in writing and made in the right manner. The missing or unregulated parts of the contract will be filled with the country laws’ mandatory, alternative and adjunctive regulations. Contracts at the base of international commercial relationships do not have to be made in writing (there is no obligation). Generally liberty of contract has been given. The law system in which was taken into consideration while the contract was being drafted should be the law chosen as the law which shall be applied to it. The form of contracts with an international character according to the LRA (Locut Regit Actum) rule should be defined accordingly to the rules of the country in which they were made in. However just like in Turkish law; the authority is also given to the law which will be applied to the fundamentals of the contract. According to this, contracts made appropriately to the laws of the country in which they were made in or to the laws of the country in which will be applied to the fundamentals of the contract are valid from the perspective of its form.
Time Limit: Time limit is tied to the law which will be applied core of the legal procedure and relationships. When a Turkish court is confronted with a conflict born from a contract which contains foreign components the judge decides the time limit according to the law which will be applied to the contract.
Problems of international trade to be solved by courts which the parties have chosen
The choosing of Turkish courts: The form and other validity conditions of the contract which gives Turkish courts authority is subjected as Lex fori to the Turkish procedural law. In which way the contract made between the parties will show the Turkish courts international authority and under which conditions it will be appointed will be determined according to the 22 article of the Act on the International Private and Civil Procedure Law (Milletlerarasý Özel Hukuk ve Usul Hukuku Hakkýndaki Kanun – hereafter will be referred to as MÖHUK) for conflicts born or will be born from procedures and relationships which contain foreign components. There are some conditions for the form and for the substance requirements as well.
Conditions relating the form: In order for the jurisdiction contract to be valid it must be made in writing (validity condition).
Conditions relating the fundamentals: 1- The courts authority should not be related to public order. 2- The conflict which created the subject of the authority contract must be specific (certain). 3- A court which does not already have authority must be appointed. 4- The court must be certain.
Limitations on the jurisdiction contract: For conflicts which do not have a relationship which is strong enough to concern Turkey the parties may both agree to make a contract which gives the Turkish courts an international jurisdiction. A new tendency seen in court practises is that a substantial tie is found between the Turkish court which has been authorized and the conflict in question.
The choosing of a foreign court: On the subject about giving a foreign court authority the liberty system is effective. However this liberty is not unlimited. The conditions which need to be followed are in this way; in relation to the place when the jurisdiction is not appointed as public order or as exclusive authority the parties may come to an agreement to allow a foreign state court to solve the conflict which is born from their debt relationship and which carries foreign components.
The conditions needed in order for a contract which gives authority to a foreign court to bear a conclusion in Turkish Law: When the Turkish courts international jurisdiction is appointed as public order or as exclusive authority the parties may not give an authority to a foreign court. In order for the contract which gives authority to a foreign contract to bear conclusions in Turkish law the court which has been given authority and the conflict between the parties must be definable. The MÖHUK has not defined any form in which the authority contract must be made in the parties may openly or by hidden manner decide on the authority of a foreign court.
The exclusive authority of the court which has been chosen: (In the contract which eliminates the authority of Turkish courts the court which has been given authority to be the only court with authority.) Despite the MÖHUK’s 31st articles last line in practise, it is accepted that the jurisdiction given to a foreign court will not remove the Turkish courts international jurisdiction and if there is no court which has jurisdiction legally then it is accepted that the case will be seen in Turkey. However in a new decision of the Courts of Appeal, a jurisdiction contract made accordingly to the 31st article will eliminate the Turkish courts’ international jurisdiction. In conclusion, as a result of the criticisms made by the doctrine, the General Assembly of the Courts of Appeal has been decided that a jurisdiction contract made accordingly to the 31st article will remove the Turkish courts’ international jurisdiction.
The situations where the Turkish courts will look at the case even if there is jurisdiction contract: The rule is that when a foreign court is given authority with a jurisdiction contract a lawsuit may not be directly opened in a Turkish court. However even if the parties have given authority to a foreign court if one of them opens a lawsuit in Turkey and the defendant does not bring forward the existence of the jurisdiction contract then the case may be seen in Turkish courts. Along with this when a foreign court decides that that they do not have authority then again the case is seen in Turkish courts. Even through there is a jurisdiction contract some situations in which the Turkish courts may look at the case are also shown in the doctrine as well.
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