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NEWSLETTER 2013

252

The Adaptation of Contracts

Assoc. Prof. Dr. Murat Develioglu

Introduction

The fundamental principle of

sanctity of contracts (pacta sunt

servanda),

which is also adopted in Turkish law, suggests that the obligor

remains bound to the terms of the contract under any conditions in

accordance with the principle of good faith and predictability of the law.

Nevertheless, the circumstances present while concluding the

contract may significantly change due to unforeseen supervening events.

This change may result in excessive burden for one side as a consequence

of a disproportion between performance and counter-performance; in

other words, the foundation of the transaction collapses and the obligor

cannot reasonably be expected to uphold the contract. The insistence on

the performance of the disadvantaged party in accordance with the terms

of the contract and applying the principle of sanctity of contracts strictly

in such a case may be contrary to the principle of good faith, equity and

justice. The contract should be adapted in accordance with the changed

circumstances in order to prevent such unfavorable situations.

Although the Court of Cassation and scholars accept such adaptation

of contracts, there is always a discussion around the legal basis of the

adaptation. The different theories will be explained below.

Fundamental Regulations under Turkish Law Regarding the

Adaptation of Contracts

The former Code of Obligations (CO) No. 818 did not provide for

the adaptation of the contract and neither the termination of the contract

if adaptation of the contract is not possible, as a general regulation.

However, art. 365/2 of the CO stipulated a specific regulation regarding

adaptation only for lump sum work contracts.

Article of August 2013