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CONTRACT AND (PACTA SUNT SERVANDA) IN TURKISH LAW

According to Article 1 of Turkish Code of Obligations, the contract is a legal transaction concluded by mutual and consentaneous expression of the parties’ will. In order to establish a contract, the parties should explain their will mutually and consentaneously. It should be indicated that the principle of “freedom of will” of individuals is accepted in the law of obligations.[1]Briefly, the parties have right to determine the content of the contract which should not be contrary to the law, the morality, the personality rights and the public order. The parties being bound by the contract after the contract is established is called the principle of “pacta sunt servanda”.

 The principle of the pacta sunt servanda; is one of the most important principles in the law of contracts and this principle is the basis of many legal concepts such as contract and contractual liability. According to this principle, the parties of the contract should abide by the contract and remain faithful to it in any case. According to the pacta sunt servanda, the main purpose is to obey the provisions of the contract in order to ensure legal security between the parties.

According to pacta sunt servanda principle, the debtor is obliged to fulfill his obligation as undertaken, in other words, in compliance with the contract. However, the principle of the pacta sunt servanda should be applied as limited with the regulation of Article 2 of Turkish Civil Code which introduces the principle that “Every person must act in good faith when exercising his/her rights and performing his/her obligations, the manifest abuse of a right is not protected by the law.”[2]

According to pacta sunt servanda principle, it is not possible to terminate the contract unilaterally. In this situation, the party which terminates the contract should compensate the loss of the other party. Again, within the scope of pacta sunt servanda; the terms of the contract could not be changed unilaterally.

THE EXCEPTIONS OF PACTA SUNT SERVANDA PRINCIPLE

  • Excessive Hardship : Hardship concept is regulated under the Article 138 of the Turkish Code Of Obligations.

ARTICLE 138 – “An extraordinary situation which is not foreseen by the parties at the time of the contract and which is not expected to be anticipated, arises from a reason not due to the debtor and changes the existing facts at the time against the debtor in such a way as to violate the rules of honesty, If the debtor has not yet fulfilled his / her obligations arising from the excessive difficulty of the performance, the debtor shall have the right to request from the judge the adaptation of the contract to the new conditions and to revoke the contract if this is not possible. In contracts of continuing obligations debtor shall terminate the contract.”.[3]

It should be stated that excessive hardship could be based on financial or moral reasons. In extraordinary situations (war, economic crises, excessive inflation, devaluation, pandemics, etc.) that disrupt the balance between the obligations of the contract, it is regulated that the parties’ being deemed bounded to that contract would cause injustice and that the judge’s intervention to the contract may be requested in accordance with the Article two of the Turkish Civil Code. A significant point that should be emphasized for the adaptation is that the person concerned should apply to the court for the adaptation and the adaptation should be requested from the judge. This situation is clear with the Supreme Court precedents. In Supreme Court decisions, the following evaluation is made; “In case of a change after the establishment of the contract, if requesting the fulfillment of the obligation according to the terms of the contract is against the rule of good faith, the debtor may request either adaption of the contract to the new conditions or the termination of the contract.” Excessive hardship is an exception of the principle of engagement with the contract and it is about “the basis of the transaction being collapsed”. The basis of the adaption request which is based on excessive hardship is the rule of the good faith which is stated under the Article 2 of Turkish Civil Code. [4]

  • Impossibility of Performance : It is regulated under the Article 136 of the Turkish Code of Obligations.

ARTICLE 136 – “If the obligation becomes impossible to perform due to the reasons that are not attributable to the debtor, the debt becomes terminated. In bilateral contracts, the debtor who has been released from his/her obligation due to impossibility shall be liable to return payments he/she has received from the counter party in accordance with the provisions stipulating unjust enrichment and he/she loses his/her right to claim the payment which has not been made yet. This provision shall not be apply to the cases where the law or contract foresees the creditor undertaking the damages occur before performing the obligation. Unless the debtor duly and timely notifies the creditor on the impossibility of the performance of the obligation and takes necessary precautions to prevent the increase of loss, he/she shall be responsible for the compensation of the losses arising.”

The concept of the impossibility may arise from a natural phenomenon, financial or legal reason. This situation is indicated in the decision file numbered 2013/10595 E., decision numbered 2013/12801 K. and dated17.09.2013 of the 3rd Civil Chamber of the Supreme Court. According to the relevant decision; it is important that whether the incident subject to the impossibility has occurred outside of the control of the parties or not.

Partial Impossibility of Performance ; If the fulfillment of the obligation becomes partially impossible due to reasons for which the debtor cannot be hold responsible, the debtor should be released from his/her debts partially. However, if it is understood that such contract would not be established if this partial impossibility was foreseen before, the debt shall be terminated completely. In bilateral contracts, if the obligation of a party becomes partially impossible and the creditor agrees to partial performance, the corresponding payment shall be made accordingly. In case the creditor does not agree to such performance or corresponding payment has an indivisible character, absolute impossibility provisions shall apply.  In the partial impossibility of performance, a part of the debt becomes impossible.

Temporary impossibility of performance/ Permanent impossibility of performance  ; It is argued that in case of temporary impossibility of performance accepted in accordance with the precdents of the Supreme Court and the doctrine, the contract will survive for a reasonable time (Duration of the tolerance of the contract as stated in the decisions of Supreme Court) which will be determined by considering the aims of the parties in making that contract, however, the obligations cannot be requested to be fulfilled. However, in case of exceeding the duration of the tolerance of the contract and the uncertainty arising of temporary impossibility of performance becoming an unexpected situation for one of the parties; there shall be now a permanent impossibility of performance. In this case, the contract shall automatically be terminated in accordance with the provisions of the permanent impossibility of performance. It should also be noted that the reasonable time here should be decided by the parties.

Some problems have aroused for the contracts between the parties due to effects of COVID-19 on commercial life which also shows its effects all around the world. As a result of these problems, issues such as force majeure, excessive hardship, impossibility of performance and adaptation cases have frequently started to be on the agenda. COVID-19 is an epidemic disease registered as a “pandemic” all over the world and epidemic diseases are considered as force majeure in accordance with the precedents of the Supreme Court. While the claim of force majeure is being evaluated in the decisions of Supreme Court, the criteria of the related incident affecting similar legal relationships throughout the country and parties being traders should also be taken into consideration. However, it is important that the force majeure should not be confused with the extraordinary situation. Extraordinary situation is more limited and force majeure is more absolute and wider.

In this context, firstly, evaluations should be made according to each concrete case and the result should be reached accordingly. Especially conflicts based on extraordinary situation, force majeure, impossibility of performance and excessive hardship will be among the issues we will try to resolve in the new normal life. You can find detailed information on these issues in our articles on “extraordinary situation, force majeure, pandemic and its effects on contracts”.


[1] OĞUZMAN, ÖZ, Borçlar Hukuku Genel Hükümler, Cilt-1, s.24

[2] Gülmelahat DOĞAN, AŞIRI İFA GÜÇLÜĞÜ NEDENİYLE SÖZLEŞMENİN DEĞİŞEN KOŞULLARA UYARLANMASI, s.10

[3] 6098 sayılı Türk Borçlar Kanunu

[4] Yargıtay 13. H.D.12.2.1981, 147/932


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