Aslı Başgöz, Yalın Akmenek, Bora Durmaz
Edited By: William Johnston, Thomas Werlen, Frederick Link
- Banks and cross-border issues — Money and the conflict of laws — Contractual set-off — Judicial set-off
This chapter examines the law of set-off in Turkey, both outside and within the context of bankruptcy. It considers the legal framework of set-off under Turkish law, along with its mechanisms, requirements, limitations, and consequences under the Turkish Code of Obligations, the Turkish Execution and Bankruptcy Law, and contractual arrangements. Under Turkish law, set-off does not provide for the actual performance of an obligation. Rather, it is a mechanism for extinguishing an obligation as if performed in exchange for a counterclaim. The chapter first considers the requirements for set-off between solvent parties, the consequences of set-off outside bankruptcy, and contractual set-off. It then discusses the legal framework for set-off against insolvent parties as well as the restrictions and objections to set-off. It also analyses conflict of laws issues arising in cross-border set-off.