Freedom of Contract

Also known as: Contractual Freedom, Party Autonomy, Sözleşme Serbestisi, TCO Article 26, TCO Article 27

In short

The freedom of parties to decide whether to contract, to choose their counterparty and to determine the type and content of their contract within the limits of the law.

Freedom of contract is a fundamental principle of the law of obligations. Under Article 26 of the Turkish Code of Obligations (TCO), parties may freely determine the content of a contract within the limits set by law. The principle covers several freedoms:

Freedom to contract: Deciding whether to enter into a contract
Freedom to choose the counterparty
Freedom of type: Contracts not regulated by statute may also be concluded (e.g. franchise, distribution)
Freedom of content: Freely determining rights and obligations
Freedom of form: Unless the law provides otherwise, contracts are not subject to any form; see Form of Contract

Limits (TCO Article 27)

Contracts contrary to mandatory provisions of law, morality, public order or personality rights, or whose subject matter is impossible, are absolutely null and void. The law also restricts freedom in certain areas to protect the weaker party:

Control of standard terms
Consumer contracts and unfair contract terms
Protective rules in employment and lease contracts
Limits on exclusion of liability
Competition law; see Anti-Competitive Agreement

Partial Nullity

If only some clauses are void, the others remain valid. But if it is clear that the contract would not have been concluded without those clauses, the whole contract is void (TCO Article 27(2)). Severability clauses commonly found in contracts confirm this principle.

In Practice

Freedom of contract lets parties build solutions tailored to their commercial needs. But even between merchants not every clause is valid; exclusion of liability for gross fault, excessive penalties and non-compete clauses in particular may hit these limits. For merchants’ duty of care see Prudent Businessperson.

Frequently Asked Questions

Can the parties agree to depart from any statutory provision?

No. Only default (supplementary) rules can be varied. Contracts contrary to mandatory provisions of law, morality, public order or personality rights, or whose subject matter is impossible, are absolutely null and void (TCO Article 27).

If one clause is invalid, is the whole contract invalid?

As a rule, no. If nullity affects only some clauses, the others remain valid, unless it is clear that the contract would not have been concluded without them (TCO Article 27(2)).

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