Smart Contracts and Legal Dispute

Smart contracts are pieces of code that run automatically on the blockchain. Although they are not directly regulated in Turkish law, they are evaluated within the framework of TBK, TTK and KVKK.

Legal Characterization

• Smart contract is an automation tool of the classical contract.
• The will of the parties (offer + acceptance) exists before the transaction.
• TBK general provisions (consent, declaration of will, capacity) apply.
• The "Code is law" approach is not valid in Turkish law; The final authority lies with the judiciary.

Typical Types of Disputes

• Code error: Wrong result due to bug (DAO hack, Parity wallet).
• Oracle manipulation: Misleading an external data source.
• Error/cheat: TBK art.30-39 — contract cancellation.
• Arbitration without a judge:Legal validity of the automatic resolution mechanism.
• Lack of KYC:Anonymity of the counterparty.

Error and Cheating Discussion

• TBK article 31 — fundamental error: mistake about the nature or subject of the contract.
• TBK art.32 — motive error: interpreted narrowly.
• TBK art.36 — cheating: deliberate misleading.
• Is "code error" an error or impossibility of performance?

The "Undo" Problem

Blockchain transactions, as a rule, cannot be reversed. However, by legal decision:

• The other party may issue a refund.
• Exchange/wallet provider may freeze transactions
• Miners can correct (rare, not check) with the new block.
• Fork historical exception on Ethereum/other networks.

Consumer Protection

• TKHK application numbered 6502 — The title of consumer in DeFi is controversial.
• The "obligation to inform" requires disclosure of the code structure.
• The right of withdrawal is not standard (due to the nature of the code).

Dispute Resolution

• Judicial remedy: Turkish courts if the identity of the parties is known.
• Arbitration: If there is an arbitration clause in the contract.
• "Decentralized Justice" (Kleros): Barely legally valid in Türkiye.
• Exchange intervention: Wallet freezing, KYC data sharing.

Supreme Court — Expected Approach

The Supreme Court chambers will continue to apply the general provisions of the TBK in smart contracts; It will resolve disputes through classical tools such as mistake, fraud, impossibility of performance, and unjust enrichment. In the face of the "code is law" thesis, it will be emphasized that the final authority lies with the Turkish judiciary.

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