Smart Contracts and Their Legal Status in Turkey

The concept of smart contracts, originally introduced by Nick Szabo, predates blockchain technology. Following the launch of Ethereum in 2015, smart contracts became widely used as mechanisms through which the intentions of the parties are expressed in code and transactions are automatically executed when predetermined conditions are satisfied.

The word “smart” does not necessarily refer to artificial intelligence. It mainly describes the ability of the code to interact with data and execute predefined operations. Smart contracts have variously been characterized as escrow-like arrangements or self-executing contracts that can perform contractual obligations without requiring a court enforcement decision.

Their decentralized nature may create questions concerning jurisdiction and applicable law. Turkish legislation does not currently provide a specific legal definition of smart contracts. Nevertheless, where legally valid mutual consent exists, smart contracts may produce legal consequences under the Turkish Code of Obligations, electronic contracting principles and applicable rules of evidence.

Author: Av. Dr. Gökhan Cindemir – Author of Avrupa Kripto Varlık Piyasaları Tüzüğü.