Legal Validity of the Contracts Established in Electronic Environment

Validity of e-contracts in terms of form

As per the article 12 of the Turkish Obligations Code, a requirement as to form is not prescribed for contracts; however, a requirement as to form may be stipulated for a contract to be concluded as otherwise agreed by the parties. What is meant by the requirement as to form is that the contract is concluded in writing or verbally and that the contract is in ordinary written or qualified written form if it is concluded in writing. To mention briefly the ordinary written and qualified written forms; in ordinary written form, it is sufficient to address the provisions in writing under the signatures of the parties. However, official written form is governed by stricter rules; accordingly, public institutions, e.g. a public notary office or a land registry office, get involved in the process while a contract is established between the parties.

The parties may establish a contract even by promising each other, and such contract is valid. However, if the laws or the parties stipulate a requirement as to form, in other words, if they specify that the contract should be concluded in writing, the validity of the contract will be affected by a noncompliance with the determined requirement as to form. If a contract is concluded without complying with the stipulated requirement as to form, such contract shall be deemed to be invalid pursuant to our law; this is because, the requirement as to form emerges as a condition for validity in our law.

As regards the contracts concluded in electronic environment; to address these contracts in terms of form, it is possible to say that such contracts may be concluded in writing, given the environment in which they are concluded. However, if a contract contemplated to be established in electronic environment is subject to official form requirement, in other words, if the involvement of an official authority is necessary in the phase for establishment of the contract, it will not be possible for such contract to be established in electronic environment. To exemplify, a lease contract may be established in electronic environment since it is subject to ordinary written form requirement, however, a real estate sales contract may not be established in electronic environment since it is subject to the official written form requirement.

The component “signature” in electronic contracts

As we have mentioned in the first chapter of our newsletter, there are basically two components in order for written contracts to be established. One is to address the provisions in writing and the other is the signatures of the parties. So, how shall the signature component be ensured in an ordinary written contract established in electronic environment? While only the provision “It is mandatory that the signature is affixed by the obligor in his own handwriting” was contained in the article 15/1 of our Obligations Code regulating contractual relationships, the following provision was contained in the article 5/1, bearing the heading “legal consequences of and field of application pertaining to secure electronic signatures”, of the Electronic Signature Law: “A secure electronic signature shall have the same consequences as a signature affixed by hand”.   

In this direction, the provision “A secure electronic signature shall also have all the legal consequences of a signature affixed in handwriting” has been added as the second sentence into the article 15/1 of the Obligations Code and thus, the discrepancy between the laws has been eliminated and a consistency has been ensured between the laws. As can be understood in the light of the provisions mentioned above, an electronic signature shall be in the force of a signature affixed by hand, provided that such electronic signature bears the conditions determined by its own law. Hence, the signature component will also be ensured for the written contracts in electronic environment.

Even if the signature component is ensured by means of secure electronic signature, the contracts requiring official written form may not nevertheless be concluded in electronic environment, as we have stated above. This because, these contracts require the involvement of an official authority. There is only one way to establish a contract in official written form in electronic environment: If this is expressly specified by the lawmaker. If our law expressly specifies that an official written contract will be established electronically, then, these contracts may also be established in electronic environment. However, we observe that our current legislation does not contain a provision in this regard and that the countries refrain from prescribing such a provision in the international legislation as well.

In conclusion, the contracts established in electronic environment are considered as valid under our law if they satisfy the written form requirement; however, the contracts subject to the official written form may not be established in electronic environment since our legislation does not contain any provision in this regard.