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The Problem of whether the General Provision regarding
Personal Guarantees in Article 603 of the Law of Obligations
shall be applied to Bill Guarantees
*
Assoc. Prof. H. Murat Develioglu
Introduction
The Law of Obligations No. 818 did not entail any regulation with
respect to conditions for validity for personal guarantee agreements,
other than surety. Neither is there any such regulation about this in the
Swiss Law of Obligations. However, Article 603 entitled “Scope of
Application”, which was added with the Turkish Law of Obligations
No. 6098
1
(“TLO”), regulates this issue and brings novelties with
regards to agreements which are concluded in any other name but are
related to personal guarantees granted by real persons, thus the scope
of application of the provisions regarding surety are extended. The jus-
tification of the aforementioned article sets forth that this provision, in
essence, shall be applicable to agreements concluded in any other
name on behalf of the creditors in order for them to be exempt from the
provisions protecting the surety, for instance to guarantee agreements.
For bill guarantees, which qualify as personal guaranties and are
found in Turkish Commercial Code No. 6102
2
(“TCC”), it is a ques-
tion of debate whether TLO Art. 603 is applicable or not. The discus-
sions and decision of the Court of Cassation with respect to this issue
are examined below.
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NEWSLETTER 2014
*
Article of August 2014
1
Published on the Official Gazette dated 11 January 2011 and no. 27836, and entered into force
on 1 July 2012.
2
Published on the Official Gazette dated 14 February 2011 and no. 27846, and entered into force
on 1 July 2012.