A Comparison of Works Contract and Just-in-Time Contract

In Turkish Law of Obligations, parties have ability to enter into a contract within the framework of freedom of contract.  The contracts that are not listed by the law are called innominate contracts. Just-in-time contract is not listed by the Law, but it is one of the innominate contracts that contain the elements of both nominate and innominate contracts. In this article, the differences and similarities between the just-in-time and works contracts will be expressed.

1. Just in Time (JIT) Contract

Just in time contract is one of the innominate contracts with not very old practice that emerged with the implementation of just in time production systems known as “just in time”.

Since this contract contains the elements of different contract types, making a full definition in the doctrine has been avoided. But, in the definition of the Dr. Yakup Korkmaz about just in time contract: “To provide (make or sell a work) something for one party (the supplier) to the other party of the contract; the other party (the main manufacturer) owes a fee to the party supplying the parts; It is a mixed, long-term, framework contract that creates a permanent debt relationship between the parties, imposes debts on both parties, includes intense trust and cooperation.”

In order to consider the definition above, the elements of the just-in-time contract are as follows:

1. Permanent Debt Relationship; supplier, is constantly ready to perform as a result of the manufacturer's request. There is a long-term trust-based delivery relationship between the parties.

2. Frame Contract; parties of just in time contract creates obligations for the contracts to be made later on. With this contract, parties define the rights and obligations for the future order.

3. Charge; in this contract, the supplier's fee from the main manufacturer for the supplied parts should be agreed. It is a contract that imposes debt on both parties.

4. Agreement of the Parties; parties should have agreement between the supplier to supply of good and the main manufacturer's obligation to pay for the parts to be supplied.

2.    Works Contract

Works contracts are regulated among the service contracts in the Turkish Code of Obligations No. 6098.

According to legislation on the works contract, it is a contract in which the contractor undertakes to create a work and the owner undertakes to pay a price for it. The contractor has to perform the acts he undertakes with loyalty and diligence, taking into account the legitimate interests of the owner.

Contract of construction includes debt of creation, payroll debt, mutual agreement of the parties. As can be understood from its elements, the contract of work is one of the contracts that imposes debts on both parties. Although it is controversial in the doctrine, according to the dominant view, the contract of work creates a debt relationship with immediate performance. The debt ends with the creation of the work. Another view, which is weak, argues that performance creates a permanent debt due to the spread of time.

3.   Differences and Similarities Between Just in Time Contracts and Works Contracts

Just in time and works contracts; the contracts that impose debts on both parties, it is similar in that a "thing" is produced and delivered and a fee is agreed upon for it. In both contracts, there is a relationship of trust between the parties.

In a just in time contract, like in a works contract, supplier and primary producer generally agree on the production and delivery of a part whose quality has been determined or whose qualifications have been determined together. Since a part that does not have the features determined by the primary producer will be unusable for the primary producer, this indicates that the just-in-time supply contract contains the elements of the contract of work.

As stated above, the construction contract is an immediate-acting contract according to the prevailing view in the doctrine, while the just-in-time supply contract is one of the continuous performance contracts. While the contract of work is undertaken because of performance rather than an act of performance, this is not exactly the case in just-in-time contracts. Just-in-time contracts determine the rights and obligations of the parties for future orders. As such, it is a framework contract.

Just-in-time contract bears the elements not only of the contract of work but also of other contracts. In this respect, it differs from a works contract.

4.   Conclusion

To conclude, just-in-time contracts; with this contract and from the supplier, carries the elements of the works contracts, since they have agreed on the production and delivery of a part with certain qualities to the main manufacturer, and there is an agreement based on a relationship of trust between them. Works contract is an immediate performance contract, the just-in-time contract is a continuous performance contract; just-in-time contract is an innominate contract separate from the contract of work in that it is a framework contract and includes elements of other contracts, such as sales and know-how contracts, in addition to the elements of the contract of work.

Zeynep Sude Sağlık

Bibliography

[1] Dr. Yakup Korkmaz, Tam Zamanında Tedarik Sözleşmesi, Ankara Üniversitesi Sosyal Bilimler Enstitüsü Özel Hukuk Anabilim Dalı, Doktora Tezi, Ankara 2009, s. 45

[2] 6098 sayılı Türk Borçlar Kanunu m.470-471

[3] Yavuz\Özen \Acar, Borçlar Hukuku Dersleri Özel Hükümler, Cilt 17. Bası, Beta Yayıncılık İstanbul 2021, s.546-547

[4] Dr. Yakup Korkmaz, Tam Zamanında Tedarik Sözleşmesi, Ankara Üniversitesi Sosyal Bilimler Enstitüsü Özel Hukuk Anabilim Dalı, Doktora tezi, Ankara 2009, s.77-78

[5] Korkmaz, Tam Zamanında Tedarik Sözleşmesi,s.66 vd.