Law of Obligations
Advisory and representation are provided in contracts, debtor–creditor relations, compensation claims and disputes arising from contracts.
The priority is to clearly establish the parties’ rights and obligations and to prevent disputes.
Services in This Area
- Drafting, reviewing and revising contracts of all kinds
- Disputes arising from breach and termination of contracts
- Debt recovery actions and claims for default interest
- Pecuniary and non-pecuniary damages claims arising from torts
- Restitution claims based on unjust enrichment
- Disputes concerning penalty clauses and security provisions
- Requests for the adaptation of contracts in cases of hardship
- Preparation of formal notices, releases and assignments of receivables
What Does the Law of Obligations Govern?
The law of obligations, framed by the Turkish Code of Obligations No. 6098 (TCO), governs how obligations arise, take effect and come to an end. An obligation may arise from contract, tort or unjust enrichment, and it features in almost every sphere, from daily life to commercial dealings.
Alongside typical contracts such as sale, lease, works, mandate and service agreements, mixed and atypical contracts not specifically regulated by statute also fall within this field. Advisory and representation are provided at every stage of a contract's formation, interpretation, performance and termination.
How Do Debt and Compensation Disputes Proceed?
When a dispute arises, the first step is usually to serve a formal notice on the other party, placing them in default and setting out the claims in writing. Voluntary mediation is available for disputes of any nature; for commercial monetary claims, mediation is a mandatory precondition to litigation.
If no settlement is reached, filing a recovery or compensation action or initiating enforcement proceedings may be considered. Contractual claims are, as a rule, subject to the general ten-year limitation period; tort-based compensation claims must be brought within two years of learning of the damage and the person liable, and in any event within ten years of the act.
What Should Be Considered When Preparing a Contract?
Clearly setting out the parties, subject matter, price, time of performance and the consequences of default significantly narrows the scope of potential disputes. Provisions on penalties, termination, force majeure and the chosen dispute resolution method are considered and structured according to the nature of the specific relationship.
Where circumstances change unforeseeably after signature, adaptation or termination of the contract may be sought under the hardship provisions of the TCO. Legal support is provided at an early stage so that such requests are raised in time and in the proper form.
Frequently Asked Questions
- Is a formal notice required before filing a debt recovery action?
- A formal notice is not compulsory in every case, but it is often important for placing the debtor in default and starting the accrual of interest. Where a due date is fixed, default may arise automatically; where no due date is set, a notice is in principle required. The appropriate course depends on the nature of the specific claim.
- What is the limitation period for compensation claims in Turkey?
- Tort-based compensation claims must be brought within two years of learning of the damage and the person liable, and in any event within ten years of the act; where the act also constitutes a criminal offence, the longer criminal limitation period may apply. Claims arising from breach of contract are, as a rule, subject to the general ten-year limitation period. Which period applies is determined by the legal basis of the claim.
- Can a contractual penalty be reduced?
- Under the TCO, the judge may reduce a penalty considered excessive, even of their own motion. Between merchants, reduction is in principle not available; however, intervention is possible where the penalty would cause the merchant's economic ruin. The outcome varies with the specific contract and the parties' circumstances.
- Can a contract be adapted if economic conditions change?
- Where an extraordinary situation unforeseen by the parties arises after the contract is concluded and performance becomes excessively onerous contrary to good faith, adaptation or rescission may be sought under the hardship provisions of the TCO. This requires that the obligation has not yet been performed, or has been performed under reservation of rights. Whether such a request succeeds is assessed on the facts of each case.
These answers are for general information only and do not constitute legal advice. For an assessment of your specific situation, please consult a lawyer.
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