Newsletter-21

13 COMMERCIAL LAW the parties are free to execute an agreement in the form and substance as they so elect, subject to the limitations envisaged under the law (Ar- ticle 26 of the Code of Obligations). Unlike generic or typical agree- ments regulated under the Code of Obligations or other laws, escrow agreements can be qualified as atypical or innominate agreements. While the constituents of escrow agreements do not meet any agreement types regulated under the Code of Obligations, it can, nev- ertheless, be compared to bailment contracts ( bailment agreement and sequestration contracts ) and contracts of mandate, which have been covered in detail in the Code of Obligations. As a matter of fact, the essence of the contract of bailment is safekeeping, and the bailor is obliged to return the chattel at any time upon request of the bailee (Ar- ticle 564 of the Code of Obligations). Even if one of the components of the escrow agreement is the obligation to keep it safe, the obligation to return, as envisaged in the contract of bailment, does not coincide with the structure of the escrow agreement, because the obligation to return as envisaged in the escrow agreement is intended for the performance of the obligations arising from the underlying contractual relation- ship. In the event of sequestration as a kind of contract of bailment, it is essential that if the legal status of the parties to the underlying agreement is unclear or disputed, the contractual asset is entrusted to a third party (Article 569 of the Code of Obligations). Here, again, it is also intended to prevent any disposition over the asset entrusted to the third party and, in this respect, it has a purpose similar to that of the escrow agreement. However, the point that differs this contract from the escrow agreement is that the legal status is unclear or disputed. A contract of mandate is an agreement where the mandatory undertakes to perform a particular business or transaction for the mandator (Ar- ticle 502 of the Code of Obligations). Here, too, the escrow agent in the escrow agreement is also obliged to act prudently and loyally just like the contract of mandate. However, the basic point in the contract of mandate is that the mandator is entitled at any time to terminate the contract and to dismiss the mandatory, unilaterally (Article 512 of the Code of Obligations). This unilateral power does not comply with the structure of the escrow agreement 3 . 3 Kırca Ismail , Banka ve Ticaret Hukuku Dergisi, Vol. XIX, Issue 1, Ankara 1997: p.53-56.