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Turkish Contract Law Reform: Standard Terms, Unforeseen Circumstances, and Judicial Intervention

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Abstract

The aim of the present study is to analyse, in Turkish law, judicial and legislative interventions in the realm of freedom of contract, and to show how, and under what circumstances, contractual expectations depend upon a variety of non-contractual economic and social expectations. I particularly consider the role of good faith and the constitutional principle of protecting the vulnerable in contract interpretation, which first gained high prominence in the case law, and was then, to some extent, codified by the legislature in the 2012 Code of Obligations. I will start by presenting briefly the legal Westernisation process in Turkey as a result of the reception of Swiss private law at the beginning of the 20th century. This will make it easier to understand the organic evolution of judge-made contractual justice, an implicit factor having impact on consumers as well as businesses. I will then critically evaluate the way the legislature codified the case law that had imposed certain fairness requirements reflecting the business environment in Turkey. Such an evaluation will allow me to assess whether the new law is fit for its purpose and prepared for the challenges of the future.

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Notes

  1. Büyüksagis (2014a), at no 14.

  2. Büyüksagis (2012a), at p. 44.

  3. Bucher (1999), at p. 222.

  4. Mardin (2006), at p. 266.

  5. Büyüksagis (2014a), at no 15.

  6. Alan Watson explains the success of legal transplants by a highly developed autonomy of the legal profession. See Watson (1996).

  7. Hirsch (1956).

  8. Büyüksagis (2015a), at pp. 688 ff.

  9. For an analysis, see Steinauer (2009), at no 104.

  10. Büyüksagis (2014a), at no 23 and no 24. For a similar observation in Switzerland, see Pichonnaz (2013), at pp. 47–48; Gauch (2013), at p. 15; Werro (2010).

  11. Cardozo (1921), at p. 140.

  12. 316 U.S. 174 (1942).

  13. Y4.HD, 3.2.2005T, 2004/7039E, 2005/746K. See also Y4.HD, 30.6.2004T, 2004/2110E, 2004/8595K; YHGK, 4.6.2003T, 2003/4-400E, 2003/393K; Y4.HD, 18.12.2002T, 2002/13842E, 2002/14290K. On these cases, see Havutçu (2010), at pp. 586 ff. For a similar approach in bodily injury cases, see Y4.HD, 30.01.2009T, 2008/5440E, 2009/1354K (stating that the time limit begins when the plaintiff is aware of his bodily injury and not when the traffic accident occurred).

  14. For these developments particularly in asbestos-related claims, see Karner (2014).

  15. I think this phenomenon in Turkish contract law supports the findings of Godwin (2012), at p. 3: ‘The popularity of judges does not arise from thin air by virtue of putting on their robes. Instead, judges’ popularity depends on how responsive they are to social needs.’

  16. Havutçu (2010), at pp. 590 ff; Erdem (2010), at p. 189; Başpınar and Altunkaya (2008).

  17. Büyüksagis (2015a), at pp. 683 ff; Örücü (2014).

  18. Pound (1917), at pp. 16–7; Eren (2015), at pp. 16–7; Zevkliler et al. (2013), at p. 106.

  19. Wielsch (2013), at p. 198.

  20. Although this was the general rule before the 2012 reform, an exceptional statutory provision governing the amount of remuneration in the contract for work and services stipulates that where performance of the work was prevented or seriously hindered by extraordinary circumstances that were unforeseeable or excluded according to the conditions assumed by both parties, the court may, at its discretion, authorise adaptation or termination of the contract. See Art. 365(2) of the previous Code of Obligations and Art. 480(2) of the new Code.

  21. Y13.HD, 9.6.2005T, 2005/1874E, 2005/9749K.

  22. Y13.HD, 26.11.1982T, 1982/6186E, 1982/7199K.

  23. Y13.HD, 3.3.2005T, 14870E, 3171K; YHGK, 15.10.2003T, 13-599E, 599K; YHGK, 7.5.2003T, 13-332E, 340K; Y13.HD, 19.4.2001T, 3144E, 4167K; YHGK, 1.10.1997T, 13-493E, 764K. For more cases, see Aydın (2005); Ertürk (2005), at p. 475.

  24. YHGK, 19.2.1997T, 11-762E, 77K; YHGK, 17.9.1997T, 11-460E, 651K.

  25. It is worth noting that the Supreme Court applies the principle ex officio. See YİBK, 14.2.1951T, 17/1K; Oğuzman (1988).

  26. Art. 19 (Art. 18 of the previous Code of Obligations): ‘When assessing the form and terms of a contract, the true and common intention of the parties must be ascertained …’ (author’s translation).

  27. Y3.HD, 25.4.2011T, 2011/5539E, 2011/6984K; Serozan (2015), at pp. 10–11; Kaplan (2007), at p. 109; Arat (2006), at p. 40.

  28. See Art. 117 of the previous Code of Obligations (and Art. 136 of the new Code): ‘An obligation is deemed extinguished where its performance is made impossible by circumstances not attributable to the obligor. In a bilateral contract, the obligor thus released is liable for the consideration already received pursuant to the provisions on unjust enrichment and loses his counter-claim to the extent it has not yet been satisfied’ (author’s translation).

  29. The Supreme Court rejected, for instance, the claims of a seller who argued that a massive increase in the price of the goods subject to the contract made it impossible for him to perform. As a result, the Court did not apply the statutory rule on impossibility of performance. See Y13.HD, 16.4.1996T, 1996/3653E, 1996/3920K.

  30. BGH 25 May 1977, NJW 1977, at pp. 2262–2263.

  31. Zimmermann (2013), at p. 30.

  32. BGE 122 III 97, c. 3a; BGE 107 II 343, c. 2; BGE 100 II 345, c. 2b; BGE 97 II 390, c. 6; Pichonnaz (2011a), at pp. 25–26; Schwenzer (2009), at p. 730. In Turkish contract law it rarely occurs that the Supreme Court refers to the notion of ‘abuse of right’. See, for example, Y3.HD, 30.5.2012T, 2012/8973E, 2012/13817K.

  33. Jäggi et al. (2014), at no 626; Pichonnaz (2011a), at p. 27; Gauch (2001), at pp. 234–235; Tercier (1979), at p. 205.

  34. Y3.HD, 7.4.2008T, 5324E, 5974K. See also Y3.HD, 2.6.1998T, 4263E, 6098K; YHGK, 4.12.1996T, 3-717E, 850K.

  35. AYM, 3.4.2013T, 2012/97E, 2013/51K, RG (31 December 2013), 28868.

  36. BVerfG, 19 October 1993, BVerfGE 89, 214 (Bürgschaft); NJW 1994, p. 36; Cherednychenko (2007), at pp. 234 ff. For observations in other countries and at EU level, see Niglia (2015), at pp. 72 ff; Micklitz (2014b); Wielsch (2014); Brüggemeier et al. (2010); Mak (2008).

  37. Y3.HD, 7.4.2008T, 5324E, 5974K.

  38. Büyüksagis (2014a), at no 89.

  39. Arkan (2013), at pp. 137 ff.

  40. YHGK, 15.10.1997T, 1997/9-486E, 1997/822K; YHGK, 2.10.2002T, 2002/9-596E, 2002/662K; YHGK, 2.2.2005T, 2004/9-759E, 2005/9K.

  41. YHGK, 20.3.1974T, 1970/1053E, 1974/222K; Y15.HD, 4.7.2008T, 2007/3434E, 2008/4508K; Y6.HD, 22.4.2010T, 2009/6629E, 2010/4835K.

  42. The case law of the Supreme Court is criticised by several authors. See, e.g., Yasaman and Poroy (2012), at no 185; Ayhan (2013).

  43. Author’s translation. For an analysis of this provision, which finds its roots in Art. 21 of the Swiss Code of Obligations, see Gauch (1989).

  44. Y11.HD, 13.9.2004T, 2003/13707E, 2004/8148K; Y11.HD, 14.1.2003T, 2002/8654E, 2003/253K; Y11.HD, 21.10.2003T, 2003/10420E, 2003/9650K; Y11.HD, 23.6.2003T, 2003/1229E, 2003/6784K; Y11.HD, 25.4.2003T, 2002/10961E, 2003/3989K.

  45. A similar description can be found in Teubner (1998), at p. 23.

  46. Another goal of the legislature was, without changing the general structure of the previous Code modelled on the Swiss legislative frameworks, to make a certain number of significant modifications based on the provisions set out by the EU Directives. Indeed, accession negotiations with the EU brought about an important breakthrough in the use of comparative law by Turkish courts. In October 2005, negotiations started with the so-called screening process, which aims at determining to what extent Turkey meets the EU’s rules and regulations known as the acquis communautaire.

  47. For the development of the will theory of contract over the 20th century in the US and Europe, see Kennedy (2000).

  48. İstanbul Barosu Dergisi 2014(1) (Tüketici Hakları ve Rekabet Hukuku Özel Sayısı); Terazi Hukuk Dergisi 2014(11) (Yaşar Üniversitesi Hukuk Fakültesi Tüketici Hukuku Sempozyumu Özel Sayısı).

  49. This reason, however, was not mentioned in the Preamble to the new Code of Obligations.

  50. In the new Code, in addition to the innovations in the field of contracts, there are substantial changes in tort law, which find their roots particularly in Swiss legislative proposals. See Büyüksagis (2012b, 2014b).

  51. § 305(1) BGB: ‘Standard business terms are all contract terms pre-formulated for more than two contracts which one party to the contract (the user) presents to the other party upon the entering into of the contract. It is irrelevant whether the provisions take the form of a physically separate part of a contract or are made part of the contractual document itself, what their volume is, what typeface or font is used for them and what form the contract takes. Contract terms do not become standard business terms to the extent that they have been negotiated in detail between the parties.'

  52. Preamble to the new Turkish Code of Obligations. See also Büyüksagis (2014a), at no 48; Atamer (2013).

  53. Y13.HD, 29.4.2014T, 2014/13315E, 2014/13503K.

  54. On the new Act of 2013, see İstanbul Barosu Dergisi (2014(1) (Tüketici Hakları ve Rekabet Hukuku Özel Sayısı); Terazi Hukuk Dergisi (2014(11), (Yaşar Üniversitesi Hukuk Fakültesi Tüketici Hukuku Sempozyumu Özel Sayısı).

  55. There are numerous studies on the 1995 Consumer Protection Act. See Kara (2012); Atamer and Micklitz (2009); Zevkliler and Aydoğdu (2004); Aslan (2004).

  56. Y3.HD, 2.6.1998T, 1998/4263E, 1998/6098K, YKD 1998 (July), p. 977.

  57. Y13.HD, 26.9.2007T, 2008/4345E, 2008/6088K.

  58. Idem.

  59. Y3.HD, 2.6.1998T, 1998/4263E, 1998/6098K, YKD 1998 (July), p. 977. YHGK, 4.12.1996T, 1996/3-717E, 1996/850K.

  60. Art. 3(1) of Directive 93/13: ‘A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer.’

  61. In Commission v. Kingdom of Sweden, the CJEU ruled that there is no obligation for the Member States to implement the indicative list. See CJEU, 7 May 2002, C-478/99, ECR I-4147, para. 20.

  62. Weatherill (2013), at p. 151.

  63. von Mehren (1990); Dannemann (2000); Rühl (2003).

  64. Büyüksagis (2015b).

  65. On the gap in the contract, see Jäggi et al. (2014), at no 542 ff. It is worth noting that, in Swiss literature, it is also argued that the ‘last-shot’ rule should be considered as the prevailing solution to the battle of the forms. Accordingly, the party who transmits the last form controls the terms of the agreement. This rule makes the counter-offer the operative document for determining them. See Dessemontet (2003), at no 48.

  66. Kramer (2004), at p. 505.

  67. Demogue (1914). For a similar approach in Swiss law, see Kramer (2004), at p. 505.

  68. BGE 115 II 484, c. 4b; 4C.189/2004 (30 July 2004), c. 2.5; 4C.41/2007 (28 Mars 2007), c. 4.2; Jäggi et al. (2014), at no 523; Kramer (2004), at p. 505.

  69. BGH 1 February 1984, NJW 1984, p. 1180.

  70. YİBK, 18.11.1964T, 1964/2E, 1964/4K, cited by Nomer (2013), at p. 2060.

  71. Aksoy-Dursun (2008), at pp. 128 ff.

  72. Cass. com. 25 October 1994, Bull. civ. IV, no 316; Cass. com. 12 July 1994, Bull. civ. IV, no 268; Will (1981), at p. 100; Delforge (2002), at pp. 492 ff.

  73. BGH 20 March 1985, NJW 1985, p. 1838; BGH 23 January 1991, NJW 1991, p. 1606; Rühl (2003), at pp. 201 ff.

  74. OGH 22 September 1982, Sz 55/135; OGH 7 June 1990, JBL 1991, p. 120; Rummel and Lukas (2014), at § 864a.

  75. Lando (2014), at p. 240.

  76. Howard Jenkins (2015), at pp. 277 ff.

  77. Dannemann (2000), at p. 204.

  78. On the entry into force of the CISG in Turkey, see Tarman (2013).

  79. Schroeter (2015), at no 31 ff; Davies and Snyder (2014), at p. 119; Schlechtriem and Schroeter (2013), at no 287; Honnold and Flechtner (2009), at no 170.3; Forte (2006), at p. 115; Kröll and Hennecke (2001), at pp. 737 ff.

  80. Art. 19 CISG:

    ‘(1) A reply to an offer which purports to be an acceptance but contains additions, limitations or other modifications is a rejection of the offer and constitutes a counter-offer.

    (2) However, a reply to an offer which purports to be an acceptance but contains additional or different terms which do not materially alter the terms of the offer constitutes an acceptance, unless the offeror, without undue delay, objects orally to the discrepancy or dispatches a notice to that effect. If he does not so object, the terms of the contract are the terms of the offer with the modifications contained in the acceptance.

    (3) Additional or different terms relating, among other things, to the price, payment, quality and quantity of the goods, place and time of delivery, extent of one party’s liability to the other or the settlement of disputes are considered to alter the terms of the offer materially.’

    For a general commentary on this statute, see Zeller (2014).

  81. Büyüksagis (2015b), at pp. 138 ff.

  82. Schwenzer and Mohs (2006), at p. 244.

  83. Stöckli (2011); Pichonnaz (2011b).

  84. Jauffret-Spinosi (2006).

  85. Y13.HD, 29.4.2014T, 2014/13315E, 2014/13503K.

  86. CJEU, 27 June 2000, Océano Grupo Editorial SA v. Murciano Quintero, C-240/98, ECR I-04941, para. 25.

  87. CJEU, 26 October 2006, Mostaza Claro, C‐168/05, ECR I-10421, para. 25; CJEU, 6 October 2009, Asturcom Telecomunicaciones, C‐40/08, ECR I-09579, para. 29; CJEU, 14 June 2012, Banco Español de Crédito, C‐618/10 ECR I-0000, para. 39; Opinion of Advocate General J. Kokott in Aziz (8 November 2012), C‐415/11, para. 39.

  88. Eidenmüller et al. (2011), at p. 1087.

  89. Schulte-Nölke et al. (2008), at pp. 458 ff.

  90. See also Y11.HD, 23.2.2015T, 2015/1071E, 2015/2341K.

  91. On the scope of the Consumer Protection Act, see Havutçu (2014).

  92. See Eren (2015), at p. 217; Oğuzman and Öz (2013), at p. 165; Aydoğdu (2013), at pp. 573 and 605; Yeniocak (2013), at p. 88. For contra, see Antalya (2012), at p. 296 (according to this author, Arts. 20–25 of the Code of Obligations do not apply to transactions between merchants).

  93. Büyüksagis (2014a), at no 53.

  94. According to Art. 3(2) of Directive 93/13, a term shall be considered as not individually negotiated, ‘where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term, particularly in the context of a pre-formulated standard contract’. The Turkish Supreme Court defines the blurry demarcation line between negotiated and non-negotiated terms using very similar criteria to those of the Directive, although the new Turkish Code of Obligations does not provide a definition for the notion of non-negotiated contract term. See Büyüksagis (2014a), at no 51 ff.

  95. Büyüksagis (2013), at pp. 699–700. For similar criticisms at EU level, see Micklitz (2014a), at pp. 146–7.

  96. Micklitz (2014a), at p. 147.

  97. See Art L. 132.1 of the French Consumer Act; Mazeaud (2010b), at p. 106.

  98. See Art 31(1) of the Belgian Consumer Protection Act.

  99. § 36 of the Nordic Contracts Act: ‘(1) An agreement may be amended or set aside, in whole or in part, if its enforcement would be unreasonable or contrary to principles of fair conduct. The same applies to other legal transactions. (2) In applying subsection 1 of this provision, consideration shall be given to the circumstances at the time of the conclusion of the agreement, the content of the agreement, and later developments.’ See Wilhelmsson (2010), at p. 583.

  100. Kötz (2015), at pp. 204 ff (the author argues that, in consumer contracts, the extension of the control to individually negotiated terms would not be inappropriate, see at p. 206).

  101. Beale et al. (2010), at p. 797.

  102. Most recently, see CJEU, 14 March 2013, Aziz, C-415/11, ECR I-0000, para. 69: ‘With regard to the question of the circumstances in which an imbalance [in the parties’ rights and obligations] arises “contrary to the requirement of good faith”, … the national court must assess … whether the seller or supplier, dealing fairly and equitably with the consumer, could reasonably assume that the consumer would have agreed to such a term in individual contract negotiations.’

  103. On this question, see Büyüksagis (2012c), at p. 1406; Schulte-Nölke et al. (2008), at p. 227; Tenreiro (1995), at p. 279; Roppo (1999), at p. 135.

  104. Büyüksagis (2012c), at p. 1406; Tenreiro (1995), at p. 279.

  105. For contra, see von Bar and Clive (2009), at p. 365: ‘… the question is whether the contract term in question significantly disadvantages the consumer in comparison with the default rule which would be applicable otherwise. If the answer to this question is yes, the next question is whether this is contrary to good faith and fair dealing or whether there is a justification for this significant disadvantage.’

  106. Büyüksagis (2013), at p. 707.

  107. For a comparative approach, see Hondius and Grigoleit (2011b); Gordley (2004).

  108. Schwartz (1998); Epstein (1999); Scott (2003).

  109. Cass. civ., 6 March 1876, D. 1876, jurispr., p. 196, note Giboulot A, translated by Behar-Touchais (2013), at p. 70. It is worth noting that, since then, the French Cour de cassation has given up that strict position. See Cass. com., 3 November 1992, RTDciv 1993, p. 124; Mazeaud (2010a), at p. 10.

  110. Pichonnaz (2011a), at p. 22.

  111. Llewellyn (1931); Macneil (1978).

  112. Macneil (2003).

  113. Y13.HD, 4.2.1999T, 1999/22E, 1999/524K.

  114. İnce (2015), at pp. 309 ff. On § 313 BGB, see Doralt (2012). For a comparative analysis of clausula rebus sic stantibus, see Hondius and Grigoleit (2011a); Kadner Graziano (2010), at pp. 320 ff.

  115. Author’s translation.

  116. YHGK, 7.5.2003T, 2003/13-332E, 2003/340K; Y13.HD, 9.6.2005T, 2005/1874E, 2005/9749K; Kılıçoğlu (2013), at p. 256; Yılmaz (2010), at p. 139.

  117. Y13.HD, 6.4.1995T, 1995/145E, 1995/3339K.

  118. YHGK, 11.11.2009T, 2009/14-456E, 2009/496K; Y3.HD, 10.22.2002T, 2003/1941E, 2003/2097K; YHGK, 02.19.1997T, 11-762E, 77K; Y13.HD, 10.24.1994T, 6791E, 9014K. On this issue, see also Serozan (2000), at p. 1028; Kocayusufpaşaoğlu (2000).

  119. It is worth noting that this has been clearly established in the case law. See Y13.HD, 20.3.2003T, 2003/512E, 2003/3169K. The Supreme Court’s ruling is not limited to claims against the creditor. In some exceptional cases, the Court adjusted the contract (price) to the detriment of the debtor as well. Therefore, the wording of Art. 138 seems narrower than the approach adopted by the Supreme Court. See Büyüksagis (2014a), at no 94.

  120. Y13.HD, 13.3.1995T, 1995/02077E, 1995/02418K; Y13.HD, 21.11.1991T, 8374E, 10619K.

  121. Doralt (2012), at pp. 782–3.

  122. Serozan (2015), at p. 30; Babusiaux (2013), at p. 77; Pichonnaz (2011a), at p. 37.

  123. von Bar and Clive (2010), at p. 711; Urich-Erber (2008), at pp. 95 ff; Martinek (1998), at p. 376.

  124. See Ollerenshaw (2013), at pp. 219–220; Babusiaux (2013), at p. 77; Pichonnaz (2011a), at p. 37.

  125. Kötz (2015), at p. 424.

  126. von Bar and Clive (2010), at p. 711.

  127. In the US, Eric Posner argues, on the contrary, that ‘courts are radically incompetent given the demands that are placed on them by relational contracts’. See Posner (2000), at p. 754.

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Acknowledgments

I wish to thank the anonymous reviewer for the careful reading of my manuscript and the valuable comments. If not otherwise specified in the footnotes, the Turkish Supreme Court decisions I cited can be found at http://www.kazanci.com.tr (Kazancı data bank).

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  1. Antalya International University, Antalya, Turkey

    Erdem Büyüksagis

  2. Baur Hürlimann AG, Zürich, Switzerland

    Erdem Büyüksagis

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E. Büyüksagis: Professor of Law and Dean of the Law Faculty at Antalya International University (Turkey); Partner at Law Firm Baur Hürlimann (Zürich).

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Büyüksagis, E. Turkish Contract Law Reform: Standard Terms, Unforeseen Circumstances, and Judicial Intervention. Eur Bus Org Law Rev 17, 423–449 (2016). https://doi.org/10.1007/s40804-016-0045-z

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