Installment sales contracts in terms of the Law Obligations

In today?s world, installment sales contracts carry great importance. One of the legal arrangements made to protect the rights of legally and economically vulnerable citizens from the consequences of a consumption economy that is imposed by the globalization of economies is the installment sales contract; regulated in article 253 to 263 of the TBK. For the acceptance of an agreement reached willingly and mutually between the seller and buyer in installment sales contracts, the sales price must be agreed to be paid in installments in more than one period while the subject of sale is a movable property or right, and the item sold must be delivered to the buyer prior to the payment of at least some of the installments. In installment sales contracts, the goods are delivered to the buyer by the seller while the buyer undertakes to pay his/her debt in parts; in other words, in installments. Installment sales contracts that are applied to transactions for the same economic purpose, renders both parties indebted.The buyer will be required to pay at least one tenth of the sale price in cash at the latest at the time of the delivery, and the rest within a period of three years following the execution of the contract. The Cabinet can increase or reduce the advance payment as well as the legal payment deadlines respectively two times or by half on the basis of the goods sold. The seller, who delivers the goods without receiving the minimum cash payment indicated in the law, would lose its entitlement to the subject matter balance of the advance. Any increase in the sale price in return for the waiver of the cash payment is invalid and ineffective.viiThe provisions of TBK pertaining to installment sale contracts are of a compulsory nature, and any transaction conducted in a roundabout manner would still be subject to the provisions regarding installment sales. In installment sale contracts, where written form is mandatory, it is stipulated that the legal representative may consent to the installment sale contract in writing and at the latest during the execution of the contract. Furthermore, the time of execution of the contract and its taking effect is different than the realization of its consequences, and as such it is stipulated that the buyer would be entitled to retract his declaration of will regarding the contract, and a penalty charge in consideration of such circumstances can be prescribed.In case the seller delivers the goods subject to the installment sale contract to the buyer without receiving the minimum cash payment indicated in the law, he/she would lose his/her right to claim the subject matter balance of the advance. If the buyer defaults on the cash payment, the only options open to the seller would be to request the payment of the balance of the cash outlay or withdrawal from the contract. On the other hand, if the buyer defaults on his payment of the installments, then for the seller to be able to request the payment of the full sale price and withdraw from the contract; it would be necessary, without any prejudice to the rights indicated in the contract, for the buyer to default on at least two consecutive installment payments making up at least one tenth of the agreed sale price, or one installment making up one fourth of the sale price or the last two installments. However, if the sum to be requested by the seller as a result of his/her withdrawal from the contract is equal to or higher than the amount paid by the buyer, then the seller cannot withdraw from the contract. For the seller to be able to withdraw from the contract or request the payment of the rest of the sale price, he/she will be required to grant, at minimum, a fifteen-day notice period to the buyer.Key Words: Installment Sale Contract, seller, buyer, compulsory provision of the law, written form, right of withdrawal, default, contract for reservation of title.