Common law uses strict, objective approaches to contracts. In contrast, civil law systems, such as the
Dutch system, when court interprets the contract, they for instance consider what would be fair and
reasonable.
In civil law principles, the negotiations and contractual relations should be characterized by honesty and
fairness, without seeking an unfair detrimental advantage (principle of good faith)
- Principle of unconscionability exists, which entails that a contract can be set aside when there is
an unconscionable bargain that is so detrimental to one of the parties.
The form of a contract
Contracts are special types of agreements between two parties that are binding in law. They generate
rights and obligations that are legally enforceable.
- Simple contract: does not have to comply with any form requirements.
- In English law, deed is a written document signed and witnessed (only binding in written form)
Contracts made by deed are considered as “specialty contracts”.
For an agreement to be a contract, three elements are necessary:
1- Element 1: Offer and acceptance: agreement on the fundamental terms of the contract is
referred to as “consensus ad idem”. An offer is a statement of willingness to contract according
to the proposed terms that will become binding if accepted. To be legally effective, an offer must
be communicated, unequivocal (dolaysız, anlaşılır) – also called “firm offer”, the terms in the offer
must be certain, and the offer must not have terminated (son verilmiş).
The person making the offer is called “offeror” and the person to whom the offer is made
is the “offeree”. In English law, an offer does not create legal rights until it is accepted. An
offer may be revoked at any time before acceptance if there is no consideration. There
can be a consideration such as option contract. This applies to written offers by a
merchant to buy and sell goods. This does not apply to the contracts within Article 2 UCC.
An invitation to treat usually precedes an offer. It is a step where parties inviting offers
that the other party is free to accept or reject.
A unilateral contract is a type of contract in which there is no exchange of promises; one
party provides consideration in the form of a promise and the other party provides
consideration in the form of an act. In civil law, the term unilateral act is misused to
describe an agreement where only one party offers value, which is not considered a
contract in common law.
If a term in a contact is uncertain, it does not cause the contract to fail, while lack of clarity
towards a fundamental term will indeed make the contract invalid.
An offer can be terminated in multiple ways:
1- It can be revoked, offeror withdraws the offer
2- It can be lapsed, after the time limit for the offer has expired
3- Counter-offer made by the offeree
When the offeree accepts the offer, he communicates his unconditional assent to the offeree.
, The mirror image rule applies that the acceptance must be the mirror image to the offer. If any of the
terms are different, it is regarded a counter-offer. There is no contract until the counter-offer is accepted.
The postal rule states that acceptance is complete when the offeree posts a letter of acceptance to the
offeror. The term “battle of forms” applies to situation where offer and acceptance by the contracting
parties are made on their own standard, printed contracts. It can be unclear which set of conditions
applies. As a solution to this problem, “last shot rule” is made which refers to the conditions upon which
the offeror and the offeree agree.
2- Element 2: intention to create a legally binding relationship – with respect to social or domestic
arrangements, it is presumed that agreement was not intended to be binding. Such a
presumption can be rebutted (opposed) – çürütmek - if there is a clear evidence of an intention
to create a contractual relationship. Collective agreements are not intended to be legally binding
however, they are legally binding when they are incorporated into individual contracts.
Commercial agreements are presumed to have the legal relationship. In this situation, rebutting
requires a proof.
Factors to take into account;
Honor clause – whether the agreement is binding in honor only
Letter of comfort – letters that do not offer a formal guarantee, but a willingness to do
something
Letter of guarantee
Another factor to determine is whether during the pre-contractual phase there was any intention to
create legally binding relations. It is not uncommon to draw up agreements to agree such as letter of
intent. No legally enforceable rights can be gained from a letter of intent. Some legal systems recognize
the doctrine of good faith, which means that breaking off contractual negotiations once they have clearly
gone beyond the initial stage, may have legal consequences. In English law, there is no liability in contract
or in tort for pulling out of negotiations at any stage (therefore they should arrange something to prevent
potential losses suffered from withdrawal).
3- Element 3: the presence of consideration – consideration is a vital element in the formation of a
contract. One party must show that the other party’s promise was bought either by doing some
act in return for it or by offering a counter-promise. A promise may be exchanged for a deed or
for nominal consideration (money).
Executory consideration – refers to the exchange of promises to perform acts in the
future
Executed consideration – one party performs an act in fulfillment of a promise made by
the other
Past consideration – is a promise given to pay for something done in the past, but this is
not valid
If the law recognizes the consideration as having some value, then it is deemed sufficient. The
consideration does not have to be adequate or equal to the promise given.
The Rule in Pinnel’s Case – states that payment of lesser amount then is owed cannot discharge (tahliye)
the obligation to pay the full amount, even if the creditor has expressly agreed to release the other part
Dutch system, when court interprets the contract, they for instance consider what would be fair and
reasonable.
In civil law principles, the negotiations and contractual relations should be characterized by honesty and
fairness, without seeking an unfair detrimental advantage (principle of good faith)
- Principle of unconscionability exists, which entails that a contract can be set aside when there is
an unconscionable bargain that is so detrimental to one of the parties.
The form of a contract
Contracts are special types of agreements between two parties that are binding in law. They generate
rights and obligations that are legally enforceable.
- Simple contract: does not have to comply with any form requirements.
- In English law, deed is a written document signed and witnessed (only binding in written form)
Contracts made by deed are considered as “specialty contracts”.
For an agreement to be a contract, three elements are necessary:
1- Element 1: Offer and acceptance: agreement on the fundamental terms of the contract is
referred to as “consensus ad idem”. An offer is a statement of willingness to contract according
to the proposed terms that will become binding if accepted. To be legally effective, an offer must
be communicated, unequivocal (dolaysız, anlaşılır) – also called “firm offer”, the terms in the offer
must be certain, and the offer must not have terminated (son verilmiş).
The person making the offer is called “offeror” and the person to whom the offer is made
is the “offeree”. In English law, an offer does not create legal rights until it is accepted. An
offer may be revoked at any time before acceptance if there is no consideration. There
can be a consideration such as option contract. This applies to written offers by a
merchant to buy and sell goods. This does not apply to the contracts within Article 2 UCC.
An invitation to treat usually precedes an offer. It is a step where parties inviting offers
that the other party is free to accept or reject.
A unilateral contract is a type of contract in which there is no exchange of promises; one
party provides consideration in the form of a promise and the other party provides
consideration in the form of an act. In civil law, the term unilateral act is misused to
describe an agreement where only one party offers value, which is not considered a
contract in common law.
If a term in a contact is uncertain, it does not cause the contract to fail, while lack of clarity
towards a fundamental term will indeed make the contract invalid.
An offer can be terminated in multiple ways:
1- It can be revoked, offeror withdraws the offer
2- It can be lapsed, after the time limit for the offer has expired
3- Counter-offer made by the offeree
When the offeree accepts the offer, he communicates his unconditional assent to the offeree.
, The mirror image rule applies that the acceptance must be the mirror image to the offer. If any of the
terms are different, it is regarded a counter-offer. There is no contract until the counter-offer is accepted.
The postal rule states that acceptance is complete when the offeree posts a letter of acceptance to the
offeror. The term “battle of forms” applies to situation where offer and acceptance by the contracting
parties are made on their own standard, printed contracts. It can be unclear which set of conditions
applies. As a solution to this problem, “last shot rule” is made which refers to the conditions upon which
the offeror and the offeree agree.
2- Element 2: intention to create a legally binding relationship – with respect to social or domestic
arrangements, it is presumed that agreement was not intended to be binding. Such a
presumption can be rebutted (opposed) – çürütmek - if there is a clear evidence of an intention
to create a contractual relationship. Collective agreements are not intended to be legally binding
however, they are legally binding when they are incorporated into individual contracts.
Commercial agreements are presumed to have the legal relationship. In this situation, rebutting
requires a proof.
Factors to take into account;
Honor clause – whether the agreement is binding in honor only
Letter of comfort – letters that do not offer a formal guarantee, but a willingness to do
something
Letter of guarantee
Another factor to determine is whether during the pre-contractual phase there was any intention to
create legally binding relations. It is not uncommon to draw up agreements to agree such as letter of
intent. No legally enforceable rights can be gained from a letter of intent. Some legal systems recognize
the doctrine of good faith, which means that breaking off contractual negotiations once they have clearly
gone beyond the initial stage, may have legal consequences. In English law, there is no liability in contract
or in tort for pulling out of negotiations at any stage (therefore they should arrange something to prevent
potential losses suffered from withdrawal).
3- Element 3: the presence of consideration – consideration is a vital element in the formation of a
contract. One party must show that the other party’s promise was bought either by doing some
act in return for it or by offering a counter-promise. A promise may be exchanged for a deed or
for nominal consideration (money).
Executory consideration – refers to the exchange of promises to perform acts in the
future
Executed consideration – one party performs an act in fulfillment of a promise made by
the other
Past consideration – is a promise given to pay for something done in the past, but this is
not valid
If the law recognizes the consideration as having some value, then it is deemed sufficient. The
consideration does not have to be adequate or equal to the promise given.
The Rule in Pinnel’s Case – states that payment of lesser amount then is owed cannot discharge (tahliye)
the obligation to pay the full amount, even if the creditor has expressly agreed to release the other part
