Mandate (Vekâlet)

Scope

A mandate is the general type of contracts for the performance of services; its provisions also apply, to the extent appropriate, to contracts for the performance of services not regulated by law (TBK Article 502). Where the scope of the mandate is not stated in the contract, it is determined according to the nature of the work; however, unless the mandatary is specially authorized, it cannot bring a lawsuit, enter into a settlement, refer a dispute to arbitration, petition for bankruptcy or composition with creditors, enter into negotiable-instrument commitments (kambiyo taahhüdü) (that is, become liable on instruments such as checks and promissory notes), make gifts, stand surety, transfer immovable property or encumber it with a right (Article 504). The mandatary is obliged to follow express instructions (Article 505), to carry out the work, as a rule, personally and with the care expected of a prudent mandatary (Article 506), and to render accounts and hand over what it has received in connection with the mandate (Article 508).

Practical Significance

The principal and the mandatary may terminate the contract unilaterally at any time; the party that terminates at an inopportune time is obliged to compensate the other’s loss (Article 512). Unless it appears otherwise, a mandate ends upon the death, loss of capacity or bankruptcy of one of the parties (Article 513). The principal is obliged to pay, with interest, the expenses incurred and the advances made by the mandatary for the proper performance of the mandate, and to release it from the obligations it has assumed (Article 510). Listing the powers expressly, specifying separately the transactions that require special authority, and notifying third parties of the termination reduce disputes. Special statutory provisions also apply to professions such as the practice of law.

Commonly Confused Concepts

A mandate contract regulates the internal relationship between the parties; authority of representation, on the other hand, ensures that the consequences of a transaction made by a representative in the name and on the account of another bind the represented person directly (Article 40). The power of attorney (vekâletname) is the document of that authority. In agency without authority (vekâletsiz iş görme), there is no contract; the person performing the work is obliged to perform it in accordance with the interest and presumed intent of the person whose affair is managed (Article 526).