Türkçe
Pursuant to principle of adherence to the contract (ahde vefa or pacta sunt servanda), as one of the general principles of law, the parties of a contract should comply with the terms of the contract in all circumstances. In that respect; failure of a party to perform its obligations under the contract or termination of the contract for the reasons other than the ones regulated under such contract and related laws would be unjustified and would result in compensation liabilities.
However, the conditions that existed at the date of establishment of the contract may change in time due to the existence of an unexpected situation, a force majeure, and the balance of reciprocal obligations stipulated under the contract may be disrupted. In this case, application of the principle of adherence to contract and expecting the counterparty to perform its obligations exactly as written under the contract may have some unfair consequences.
Here at this point; the provisions of the impossibility of performance, partial impossibility of performance, provisional impossibility of performance and excessive difficulty of performance stipulated under the Turkish Code of Obligations (“TCO”) come into effect and accordingly, the contract is adapted, suspended or terminated according to new conditions.
WHAT IS IMPOSSIBILITY OF PERFORMANCE?
In accordance with Article 136 of the TCO; if the execution of a debt becomes impossible due to the reasons that the debtor cannot be held responsible, the debt terminates. In this case; the debtor of a reciprocal contract, who has been released from its debt due to impossibility, is obliged to return the performance he received from the other party in accordance with the provisions of unjust enrichment. If the other party has not yet performed its obligation; in this case, the debtor who is released from its debt loses his right to request for the performance of this obligation.
However, the legislator has imposed a notification obligation on the debtor whose debt becomes impossible and imposed some liabilities for the failure to comply with notification obligations. Accordingly; if the debtor fails to notify the impossibility of performance to the creditor without delay and does not take the necessary measures to prevent the increase of loss, the debtor will be obliged to remedy the damages and losses of the creditor arising from such failure.
The primary factor in determining whether the provisions of impossibility of performance will be applied is the determination of whether the situation causing the impossibility of performance occurs beyond the control of the parties. This matter is also discussed by 3rd Civil Chamber of the Supreme Court under its decision dated 17.09.2013 and numbered E.2013 / 10595 K.2013 / 12801 as follows:
“… If the circumstances and conditions that cause the performance of the debt to become impossible are beyond the control of the parties, the fact that the impossibility is objective or subjective will not affect the debtor’s relief from the debt. In other words, the nature of the impossibility is not taken into consideration during the judgment process and the main factor is the determination on whether the situation causing to the impossibility have developed beyond the control of the parties.”
In that respect; if a force majeure event, a situation which is beyond the control of the parties, prevents one of the parties to fulfill its obligations, then the provisions regarding the impossibility of performance will be applied.
WHAT IS PARTIAL IMPOSSIBILITY OF PERFORMANCE?
In some cases, the event causing impossibility of performance prevents the performance of not all of the obligations imposed under the contract, but only a certain part of the same. In this case, pursuant to Article 137 of the TCO, the debtor is not released from the performance of all of its obligations, but he is released merely from the performance of that specific obligations which became impossible to be performed. However, if it is clearly understood that such a contract would not be executed if this partial impossibility of performance was foreseen by the parties, the entire debt would be terminated.
In accordance with the second paragraph of the same article; if, in reciprocal contracts, the debt of a party becomes partially impossible and if the creditor accepts the partial performance by the debtor, the counter obligation of the creditor will be performed proportionally. In the event that the creditor is not willing to accept partial performance or if the counter obligation is of indivisible nature, then full impossibility provisions are applied.
WHAT IS PROVISIONAL IMPOSSIBILITY OF PERFORMANCE?
Although the debt is terminated in the presence of impossibility within the scope of Article 136 of the TCO, if the impossibility is not permanent, i.e. it is known that it will disappear within a certain period of time and the performance of the obligations will be possible again, will the debtor still be relieved of his obligation? For example, if the obligations under a reciprocal contract, such as a lease agreement, sub-employment agreement or service agreement, cannot be performed temporarily due to a reason that is beyond the control of the parties, will this justify the termination of the agreement?
Although provisions on partial impossibility of performance are included under the TCO, no special regulations were made regarding provisional impossibility of performance. Despite of the fact that this issue is controversial in the doctrine, the predominant opinion it is that the provisions regarding the default of the debtor should be implemented instead of the provisions regarding the impossibility of performance. In that case; the debt of the debtor, who cannot perform its obligation due to the provisional impossibility of performance, is not terminated, but only postponed until the disappearance of such situation.
In this case, since the debtor cannot be held responsible for a force majeure event which is not caused by his own fault and not under his control, there will be a default without the fault of the debtor. Therefore; the debtor, who has been in default to perform its debts, is not obliged to pay delay compensation and / or to compensate the losses of the other party for the deferred performance. If there is an event causing provisional impossibility of performance within the scope of a reciprocal contract, the debt relationship is suspended and during this period, the creditor cannot use his optional rights.
However, this raises another problem: How long should the parties tolerate this delay / suspension regarding this provisional impossibility of performance? In its decision dated 28.04.2010 and numbered 2010 / 15-193 E. and 2010/235 K., the General Assembly of the Supreme Court stated that; “… The existence of provisional impossibility of performance undoubtedly brings along the problem of how long the parties will be bound by this contract. The rule here is that the parties should be bound by the contract in accordance with the principle of “adherence to the contract”. However, there may be some special cases where the acceptance that the parties are bound by that contract both prevents their economic freedoms and eliminates the opportunity to execute a contract with another person. In practice, in the case of provisional impossibility of performance, the duration of the parties’ adherence to that contract is called the “tolerance period”. Determination on whether such tolerance period is expired within a contract should be made by taking into consideration of the characteristics of each case.”
As can be seen, there isn’t any concrete criteria for the determination of the period during which the parties will be bound with the contract and each case should be evaluated separately. However, of course, the related contract provisions will be primarily applied while making such a determination. For example; if there are detailed provisions regulating the force majeure under a contract and if the parties have been given the right to terminate the contract following the expiration of a specific time period, then the parties should comply with these contract provisions.
WHAT IS EXCESSIVE DIFFICULTY OF PERFORMANCE?
It is regulated under Article 138 of the TCO that if an extraordinary situation that is not foreseen by the parties at the time of the execution of the contract occurs and the facts existing at the time of the contract change against the debtor accordingly and it would be against good faith to request for the specific performance the obligations of the debtor, the contract may be adopted accordingly. If this adoption would not be possible, then revocation or termination of the contract may be considered.
In order to request for adaptation or revocation of the contract within the scope of the related article based on excessive difficulty of performance, the following conditions should be fulfilled:
- There should be an extraordinary event which could not be foreseen and not be expected to be foreseen by the debtor by the time of execution of the contract.
- This situation should not be resulted from the acts of the debtor.
- This situation should have changed the facts existing at the time of the contract against the debtor, to the extent that it would be against good faith to request for the performance of such obligations.
- The debtor should have not yet performed his obligations or should have performed his obligations by reserving his rights arising from the excessive difficulty of performance.
In case the above stated conditions exist, the party who claims for excessive difficulty of performance may apply to the court and request for the adaptation or termination of the contract. It is important to state that; the request for adaptation or termination of the contract under the scope of Article 138 of TCO should be made to the court, not to the other party of the contract. However; of course, in such a situation, there is no legal obstacle for the parties to negotiate the terms of the contract with their free will and agree on the amendment of the terms of the contract accordingly.
ERKUT LAW OFFICE
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