Suretyship Under The New Turkish Code Of Obligations: "Just Sign Here!"

The New Turkish Code of Obligations will enter into force in July 2012 and will introduce many noteworthy changes to the suretyship (kefalet) institution, which is a widely used legal instrument of personal guarantee, perhaps most commonly invoked to secure loan agreements in Turkey.

The amendments introduce new limits to the extent of a surety's liability against the lender, and a more elaborate written form requirement that seems to be a reaction to the "just sign here" attitude that the current legislative scheme enabled. In this article, we have summarized various of the noteworthy provisions in the New Code of Obligations pertaining to suretyship contracts that either did not exist previously, or will significantly amend the current legislative scheme once the new law enters into force.