Contracts are, as a rule, binding as formed, under the principle of "pacta sunt servanda" (agreements must be kept). However, the Turkish Code of Obligations contains a provision that softens this strict rule where extraordinary developments the parties could not have foreseen render the contract unbearable for one party.
The Conditions of TCO Art. 138
For an adaptation of the contract to be requested, the following conditions are required to occur together:
- An unforeseeable extraordinary situation - The subsequent occurrence of an event (economic crisis, extreme exchange-rate fluctuation, natural disaster, etc.) that could not have been foreseen by the parties, and could not have been expected to be foreseen, at the time the contract was formed.
- Not arising from the debtor - This situation must not have arisen from the debtor's own conduct.
- The balance of performance being excessively disrupted to the debtor's detriment - The debtor must not yet have performed their obligation, or must have performed the now excessively difficult obligation under an express reservation of rights.
If these conditions are met, the debtor may request that the judge adapt the contract to the new circumstances; if adaptation is not possible, they may exercise the right to withdraw from the contract, or, in contracts with continuing performance, the right to terminate.
The Court's Approach in an Adaptation Case
The court first assesses whether the contract can be adapted; if possible, the contract is placed on a new balance taking into account the parties' reasonable interests (for example, updating the price). If adaptation is genuinely not possible, a decision is made to terminate the contract.
The Difference Between Excessive Difficulty of Performance and Force Majeure
Force majeure is a situation that renders performance definitively impossible, and the obligation is extinguished; in excessive difficulty of performance, performance is still possible but has become excessively difficult for the debtor - here the aim is not to extinguish the debt, but to re-establish its balance.
Conclusion
Adaptation of a contract is an exceptional institution that is narrowly interpreted; an ordinary economic strain is not assessed within this scope. The claim must be concretely supported by the elements of unforeseeability and excessive disruption of the balance of performance.
You can review the adaptation/force majeure clauses of your existing contract with Lawyer Services' Contract Analysis tool.