Collusion / Simulation
"Is a simulated contract valid?"
Quick Answer
Simulation (Muvazaa) occurs when parties agree to create a false appearance of a legal transaction to deceive third parties, while secretly agreeing it will have no legal effect between them.
Legal Framework in Turkey
Collusion / Simulation is governed primarily by the Turkish Code of Obligations No. 6098, which provides comprehensive rules for contractual relationships. Understanding these provisions is essential for drafting enforceable agreements.
Key Points to Remember
- Turkish Code of Obligations applies to most commercial contracts
- Freedom of contract is a fundamental principle, with some mandatory provisions
- Written form may be required for certain agreements
- Choice of law clauses are generally respected for international contracts
Drafting Considerations
When drafting contracts involving collusion / simulation, attention should be paid to Turkish-specific requirements and practices. Bilingual contracts (English-Turkish) are common for international transactions.
Including appropriate dispute resolution mechanisms, clear governing law provisions, and well-defined obligations helps prevent future conflicts and ensures enforceability.
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