Guarantee Agreement
"What types of guarantees are recognized under Turkish law?"
Quick Answer
In Türkiye, the key distinction is between suretyship (kefalet) and independent guarantees (garanti), including bank letters of guarantee. Personal surety often has strict form requirements and may require spousal consent, subject to statutory exceptions and the specific transaction.
Legal Basis Under TCO No. 6098: Garanti vs Kefalet
Guarantee arrangements are primarily governed by the Turkish Code of Obligations No. 6098. The enforceability often turns on correct classification: suretyship (kefalet) is typically accessory to the principal debt and subject to strict form and validity rules, while an independent guarantee (garanti)—including many bank guarantees—may create a standalone payment obligation depending on wording and structure.
Key Points to Remember
- Correct classification matters: suretyship (kefalet) vs independent guarantee (garanti)
- Suretyship may be invalid if statutory form requirements are not met
- Spousal consent rules can apply to personal surety, with statutory exceptions
- Bank letters of guarantee are often drafted as independent obligations (“on first demand”), but wording is decisive
Drafting Considerations
When drafting a Guarantee/Surety arrangement, focus on the intended legal nature (garanti vs kefalet), scope (amount, term, secured obligations), triggers for payment (first demand vs default proof), defenses available, and mandatory validity/form requirements. For cross-border deals, bilingual (TR–EN) drafting is common, but Turkish-law validity points should be handled in Turkish with clear execution mechanics.
Including appropriate dispute resolution mechanisms, clear governing law provisions, and well-defined obligations helps prevent future conflicts and ensures enforceability.
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