Turkey: Force Majeure and loss of the basis for business in Turkey

When does the obligation to perform the contract cease to apply?

According to the provisions of the Turkish Code of Obligations, the claim to performance of a service expires if this has become impossible due to circumstances which the debtor is not responsible for. The entitlement to service in return shall also lapse in this case. Force majeure shall be deemed to exist if the event causing the damage is external, unavoidable and could not have been foreseen at the time of the occurrence of the contractual relationship and the debtor is prevented from providing the service as a result of this event. If a case of force majeure exists, it must first be determined whether the performance to be rendered becomes only temporarily or permanently impossible due to this condition. In case of permanent impossibility, the obligation to perform expires; in case of temporary impossibility, only the timely performance of the service is impossible, so that the debtor is obliged to perform as soon as the force majeure event has ended.

When may a withdrawal or an adjustment of the contractual relationship be considered?

A rescission of the contract or an adjustment of the contractual relationship can be considered under Turkish law in the case of cessation of the basis of the contract. The basis of the contract ceases to exist if the conditions and circumstances that existed at the time of concluding the contract have changed at a later point in time in an unforeseeable and extraordinary manner, without this change being the fault of the debtor, and the performance of the service becomes unreasonable for the debtor as a result.

The Turkish Code of Obligations provides, for example, in the case of production of work for a lump sum, that the adjustment of the contract can be demanded or withdrawal from the contract is possible if the production of the work for the lump sum becomes unreasonable due to circumstances which were not foreseeable at the time of conclusion of the contract or which were foreseeable but were not taken into account by the contracting parties.

How can future contractual relationships be optimally structured?

It is advisable to include special force majeure clauses in the contract. Thus, it should be defined both which events are considered force majeure and what the legal consequences of the occurrence of a force majeure event are. Furthermore, adjustment clauses should be included in the event that raw material prices become disproportionately more expensive or deliveries are cancelled and for this reason either deliveries cannot be made on time or orders have to be placed with other suppliers at higher prices.

Autor: Gürkan Erdebil