Smart contracts under Turkish law are not regulated by a special statute, but they are also not legally invisible; they are evaluated through the general principles of the Turkish Code of Obligations and other existing legislation.
What is a smart contract in legal terms, and how does it fit into the Turkish legal system? Is it “recognised” under Turkish law?
The short answer is:
- There is no special “Smart Contract Act” in Turkey.
- Smart contracts are not prohibited and not ignored; they are analysed through general principles of the Turkish Code of Obligations (TBK) and other existing laws.
- In practice, a smart contract is usually treated as a technical performance tool for a “normal” contract, sometimes also as part of the contract itself.
This article explains that structure in a clear, business-oriented way.
1. What is a smart contract in practice?
From a technical perspective, a smart contract is:
Code deployed on a blockchain that automatically executes pre-defined rules once certain conditions are met.
Examples:
- When wallet A sends 1 ETH to the contract, wallet B automatically receives 100 tokens.
- When time T is reached and a borrower has not repaid, collateral is automatically transferred to the lender.
- When an oracle feed reports a price above/below X, the contract releases or withholds funds.
Key technical features:
- Automation: execution does not depend on human action once deployed.
- Immutability (in principle): the code on-chain cannot easily be altered.
- Transparency: the code and state are visible (at least to those who can read them).
- Decentralisation: execution is distributed across the network, not run on a single server.
From a legal perspective, the real question is not “what is the code?” but:
- Whose will (irade) does the code represent?
- Does this arrangement meet the requirements of a contract under Turkish law?
- How are issues like mistake, bugs, jurisdiction and liability handled?
2. Contracts under Turkish law: where could a smart contract fit?
Under the Turkish Code of Obligations (TBK), a contract is essentially:
- two (or more) matching declarations of will,
- creating binding obligations,
- usually subject to form freedom (şekil serbestisi), unless the law requires a special form (e.g. real estate sale, suretyship, some consumer contracts).
Nothing in TBK says a contract must be on paper or signed with a pen. In principle, electronic declarations of will and digital systems can absolutely be part of a valid contract.
So where does a smart contract enter this picture?
In practice, there are two main ways to conceptualise it:
- Smart contract as a contract itself (code = agreement), or
- Smart contract as a performance tool (code = automatic execution mechanism for an “off-chain” contract).
Turkish thinking tends to be more comfortable with the second model, especially for commercially serious projects.
3. Model 1: smart contract as the contract itself
In some blockchain scenarios, especially in DeFi, parties may not sign a traditional agreement at all. The logic is:
- “Anyone who interacts with this contract under these rules is bound by what the code does.”
For example:
- A decentralised exchange (DEX) may say:
“By providing liquidity to this pool, you accept that your funds will be handled purely according to the pool’s smart contract code.”
Under Turkish law, one could argue that:
- The user interface text (webpage, app, Terms of Use),
- the smart contract code,
- and the user’s on-chain actions (transactions),
together form a set of declarations of will and “rule book” that can be treated as a contract between the parties.
However, this approach raises several complex issues in a Turkish-law context:
- Understanding and mistake:
If the user does not really understand the code or its consequences, can they later claim error (hata) or fraud (hile) under TBK? - Technical bugs vs legal intention:
If a coding error produces a strange or unfair result, does “code is law” prevail, or can a Turkish court correct or ignore it based on principles like good faith, unjust enrichment, abuse of rights? - Form requirements:
If the underlying relationship is one where Turkish law demands a special form (e.g. a suretyship or certain consumer transactions), a purely on-chain arrangement is unlikely to meet that requirement.
Because of these open questions, treating the code alone as a full contract is more theoretical than practical in many Turkish-related projects.
4. Model 2: smart contract as a technical performance tool (“off-chain” + “on-chain”)
The model that aligns best with Turkish legal culture and risk management is:
A traditional “off-chain” contract (in writing, email or electronic form) defines the rights and obligations, while the smart contract is a technical tool that performs part of this agreement automatically.
In this structure:
- The off-chain agreement (PDF, signed document, platform terms) includes clauses such as:
- identification of the parties,
- subject matter, price, rights, obligations, liability, force majeure,
- governing law and dispute resolution (e.g. Turkish law, Istanbul courts or arbitration),
- a clause stating that “performance of certain obligations will be handled via the smart contract deployed at [address X] under [network Y]”.
- The on-chain smart contract:
- receives funds or tokens,
- executes transfers or distributions,
- applies automated conditions (e.g. vesting, lock-up, interest).
Legally speaking:
- The binding contract is the off-chain instrument, governed by TBK and other relevant laws.
- The smart contract is a performance mechanism, similar in spirit to a bank’s automatic payment instruction or a software-controlled escrow.
Advantages of this model:
- It clearly fits within TBK’s existing framework.
- Parties can deal with error, bugs, force majeure, unilateral termination, liability, etc. under familiar contractual rules.
- Governing law and jurisdiction can be spelled out in normal legal language.
- If the code behaves in an unexpected way, a court or tribunal can interpret and correct the result by referring back to the off-chain contract.
For serious, cross-border or high-value projects involving Turkish parties, this architecture is the most defensible and recommended approach.
5. Is a smart contract “recognised” (tanınmış) under Turkish law?
From a client-facing perspective, this is often the core question.
5.1. No specific smart contract statute
- There is currently no Turkish statute that defines or regulates “smart contracts” as a separate contract type.
- Legislators and regulators (SPK, BDDK, MASAK, etc.) focus more on crypto assets, exchanges, investment services and AML issues, not on smart contracts as such.
So you cannot yet point to “Article X of Law Y” and say: “Here, this is the smart contract law.”
5.2. But smart contracts are NOT “legally invisible”
At the same time:
- Smart contracts are not forbidden.
- They are not treated as legally non-existent.
- They are analysed through general contract law (TBK), evidence law, unjust enrichment, tort and other existing rules.
So, in practical Turkish terms:
Smart contracts are recognised as technical and factual realities, and their legal effects are assessed under general principles of private law, not under a special statute.
5.3. Recognition in disputes: how will a Turkish court react?
In a dispute involving a smart contract, a Turkish court would typically look at:
- Parties’ intentions: What did the parties agree to do? Is there a written off-chain contract? What do the platform terms say?
- Technical evidence: On-chain transaction history, smart contract address, logs, oracles.
- Identification: Who controls which wallet? How do we connect an address to a real person or company? (This often requires KYC records, exchange documents, or digital forensics.)
- General doctrines: Good faith, abuse of rights, unjust enrichment, error, impossibility, public order.
It is highly unlikely that a Turkish court would say “code is law” in a strong crypto-anarchist sense. Instead, code would be treated as:
- strong evidence of what happened,
- a piece of the contract context,
- but still subject to legal interpretation and correction if fundamentally unfair, unlawful or contrary to the parties’ genuine will.
6. Key legal issues around smart contracts in Turkish practice
6.1. Mistake and bugs
If a bug in the code transfers funds to the wrong party, or allows an exploiter to drain liquidity:
- From a purely technical view, the transaction is “valid”.
- Under TBK, it may be treated as:
- a mistake (hata),
- unjust enrichment (sebepsiz zenginleşme),
- or abuse of rights, depending on circumstances.
The exploited party may sue in Turkey (if jurisdictional links exist), arguing that:
- the exploit was not a legitimate exercise of a contract right,
- but an opportunistic use of a technical vulnerability.
6.2. Evidence and burden of proof
Blockchain offers a rich, timestamped, immutable record of:
- which address sent what,
- which contract executed,
- which events fired.
However, in Turkish courts:
- You still need to connect the address to a person or entity.
- This often requires:
- exchange records (where the user passed KYC),
- wallet provider data,
- sometimes expert reports in IT forensics.
As long as that link is established, blockchain records can be powerful and persuasive evidence of performance, payment or breach.
6.3. Jurisdiction and governing law
Many smart-contract based protocols are global. Platform terms may point to:
- English law,
- US law,
- or international arbitration.
But where a Turkish party is involved, and disputes arise:
- Private international law rules determine whether Turkish courts or another forum has jurisdiction,
- Consumer-protection rules may favour the consumer’s forum,
- Mandatory Turkish rules (public order, consumer protection, capital markets law, etc.) may still apply, even if foreign law is chosen.
In other words, you cannot “escape” Turkish law and courts simply by deploying code on a blockchain.
7. Practical design for smart contracts involving Turkish parties
For projects that involve Turkish clients, investors or counterparties, a robust legal architecture usually looks like this:
7.1. A clear off-chain legal agreement
- A written agreement (PDF, electronic signature, click-wrap terms) sets out:
- parties’ identities and details,
- rights and obligations,
- payment terms, risk allocation, representations and warranties,
- governing law (e.g. Turkish law) and dispute resolution,
- the role of the smart contract.
Sample clause concept:
“The parties agree that performance of the obligations described in clause X shall be carried out via the smart contract deployed at blockchain address [0x…] on the [network] blockchain. The operation of this smart contract is deemed a technical performance mechanism of this Agreement and does not limit the application of mandatory legal rules or the jurisdiction of the agreed dispute resolution forum.”
7.2. A carefully audited on-chain contract
- The smart contract should:
- be audited from a security and functionality perspective,
- be consistent with the off-chain contract,
- avoid unnecessary complexity where legal risk is high.
7.3. Defined procedures for errors and upgrades
- The off-chain contract can specify:
- what happens in case of critical bug or exploit,
- whether the contract can be paused or upgraded, and by whom,
- how the parties will cooperate to mitigate damage.
This prevents the dangerous situation where code misbehaves but no one knows what to do because “it’s on the blockchain”.
8. Conclusion: how “recognised” are smart contracts in Turkey?
Smart contracts do not yet have their own dedicated law in Turkey. There is no article that says “a smart contract is X and these are its conditions.”
However, they are far from invisible:
- Turkish courts and practitioners can and do analyse smart contract-based relationships under:
- general contract law (TBK),
- evidence law,
- unjust enrichment and tort,
- and relevant regulatory regimes (capital markets, banking, AML, consumer protection).
In business terms, the safest and most realistic way to describe the situation to a client is:
- A smart contract in Turkey is recognised as a technical and factual reality.
- It is usually treated as a performance mechanism of an underlying agreement, not as a mystical new legal species.
- If you design your project with a solid off-chain contract + on-chain code architecture, you can enjoy the benefits of automation without stepping outside the safety net of Turkish law.
Yanıt yok