NEWSLETTER-2017

253 LAW OF OBLIGATIONS Consideration There are several discussions under the doctrine as to whether or not bank letters of credit are types of transactions with consideration. One scholarly view asserts that the guarantee agreement is an agree- ment that creates a burden on the one side, thus it is a transaction with no consideration. On the other hand, another scholarly view asserts that there is no obstacle to make a guarantee agreement in return for consideration. In respect of bank letters of credit, bank issues security in return for a commission fee. However, it is arguable that such com- mission is not paid by the security holders as consideration, but by the person to whose benefit the security is provided 7 . Formalities for Bank Letters of Credit As mentioned, above, there are no regulations under Turkish law regarding the content or the requirements of bank letters of credits. In this sense, the decisions of the Court of Appeals are crucial. According to the decisions of the Court of Appeals 8 , bank letters of credit are not subject to any formal requirements, and consolidation of the intentions would be sufficient to create the guarantee. The fact that bank letters of credit are not subject to any legal re- quirements and, therefore, would be proved with any type of evidence, creates certain problems that the parties face, in practice. Thus, a prec- edent to issue bank letters of credit, in writing, has been established in order to avoid these problems. In the written document, the details of the beneficiary and the addressee, the date and the amount undertaken should be specified, together with the signature of the guarantor, i.e. , the bank 9 . General Overview on Types of Bank Letters of Credit As stated, above, bank letters of credit are not similar to each other, and may be issued for different purposes in different ways. In 7 Yalcinkaya, p. 651. 8 One decision would be the decision of the11th Civil Chamber dated 27 December 2012 under Docket No. 1989/4046 and Decision No. 1990/8459. 9 Yalcinkaya, p. 659.