Current account agreement

By a current account agreement parties provide for bilateral settlement netting of their claims and obligations arising from contracts entered into in the continuing business relationship between the parties. In this case, the net balance of the claims and obligations shall be the amount due. The law expressly provides that claims entered in a current account (before netting) cannot be seized or be subject to a claim. Current account agreement is frequently applied in business life.Current account relation arises upon an agreement and it carries many benefits to the parties of agreement. It prevents mutual and separate liquidation. Also it avoids time loss and unnecessary expenses. Thence, current account agreement has become important in transactions which have bilateral currency flow. As a matter of fact current account agreement frequently appears in banking transactions.In spite of it has been prolixity regulated in Turkish Commercial Code current account agreement has been subject to many discussions in law doctrine. These discussions have been affecting reliability of current account agreement and they restrict the application field of current account agreement. To be able to discourage these discussions provisions of the current account agreement have to be particularly analyzed.