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Overdue Difficulty and Adaptation Cases Under Article 138 of The Code of Obligations

Overdue Difficulty and Adaptation Cases Under Article 138 of The Code of Obligations

According to Article 138 of the Code of Obligations No. 6098, “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 their 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. This provision also applies to foreign currency debts.”

In respect of the general law principle of “pacta sunt servanda” adopted in Turkish Law, every debtor must fulfil the obligation stipulated in the contract despite the difficulties and obstacles arising after establishing the contract. This principle is a requirement of the rule of honesty.

However, the existing conditions can unpredictably change, and as a result of this change, the balance in the contract can deteriorate to the detriment of one party; in other words, the transaction basis may collapse, and the discharge of the dept may be overly difficult for the same party.

In this case, strict adherence to the contractual liabilities and expecting the debtor to fulfil the same obligation, contrary to justice, honesty and equality. In order to avoid these negative consequences, the contract must be able to adapt to these changing conditions.

The debtor shall request for the adaptation of the contract from the court in accordance with Article 138 of the Code of Obligations, provided that the below-stated conditions exist:

  1. An unexpected event that was unforeseen and not expected to be foreseen by the debtor should occur after the execution of the contract,
  2. The unexpected event should occur beyond the control of the debtor,
  3. In respect of the Principle of Honesty, fulfiling the obligations should become excessively burdensome for the debtor because of the unexpected event,
  4. The debtor should have fulfilled his obligations by reserving its rights for hardship or not yet fulfilled the obligations under the contract.

An extraordinary situation, which the parties do not foresee at the time of the contract, is an extraordinary situation that is not foreseen by the parties and is not expected to be foreseen at the time of the contract.

War, economic crisis, high devaluation can be given as examples. The criteria here is that it shall not be expected from the parties according to all the features of the concrete case.

Even if there are contradictions in opinion on the doctrine and Supreme Court decisions about whether or not to apply Article 138 of the Code of Obligations for traders, it is widely accepted that it is necessary to apply the 138th Article if traders can not foresee as prudent merchants.

Points to consider when filing a case for rent adaptation:

  • The competent court for rent adaptation case is the civil court of peace. The authorized court for rent adaptation case is the court where the property is located.
  • It is not a lawsuit to be filed for the new lease period by sending a notice one month before the end of the rent period as in the rent determination case. The lawsuit should be filed immediately without losing time in case of extreme difficulty.
  • In the adaptation case, the adaptation of the previous rents cannot be demanded. The rent shall adjust from the date of the lawsuit.
  • As a result of the lawsuit, the rent shall be reduced according to the new conditions.
  • Until the decision is finalized, the debtor is obliged to fulfil their obligation, and the difference will be reduced for the following rent period.
  • In adaptation cases, proportional fees are paid over the annual difference between the lawsuit’s value and the rent paid per the Law on Fees numbered 492.
  • The adaptation case cannot be filed in the short term contract, which has not to exceed one year or the contract lasts for one year.

Related Article: Long-Awaited Articles of Turkish Code of Obligations on Renting Business Premises With Roof Finally Entered Into Force on July 1, 2020.

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