Newsletter-21

8 NEWSLETTER 2016 • Opinion of the Turkish Court of Cassation stating that the previous years’ loss of profit shall not be deemed to have been waived: In the decision of the 19th Civil Chamber of the Court dated 13 May 2013 5 , the following is argued: “ The fact that the claimant continued to supply products at the end of each year despite the breach of the commitment does not mean a waiver of the penalties to be applicable in case of breach of the commitment regulated under the contract. This is because there is a possibility that the distributor may fulfil its commitment in the continuing process and such a supply is a right granted to the distributor. In the specific case, it is understood that the defendant company failed to fulfil its commitment in the continuing process, including the legal proceedings, despite such right that it is entitled to. ” Here, as explained above, the supplier expects the distributor to fulfil its commitment in the upcoming years. It is prob- able that, in the distribution contract subject to the lawsuit, a right to catch-up might have be granted to the distributor in subsequent years. No Waiver Clauses The consequences should be evaluated also in the event that there is a “no waiver” clause under the contract. “No waiver” clauses regu- late that non-exercise of the rights under a contract, in whole or in part, does not mean a waiver, and reserve such rights. If the principal or the supplier remains silent for a long period of time after the violation, it could be argued that the “no waiver” clause will not be effective, and that such clause itself was waived. General “no waiver” clauses are usually not deemed valid; however, if it is specifically regulated under the contract that non-exercise by the principal or the supplier of its right to termination in the event of non-attainment by the agent or the distributor would not constitute a waiver of such right, it is possible that such a clause will be considered valid by the courts and the previ- ous years’ loss of profit will also be awarded. 5 Turkish Court of Cassation 19th Civil Chamber, File No. 2012/9915, Decision No. 2013/8558, Date: 13.05.2013 (www.kazancı.com) .