58 NEWSLETTER 2021 Two legal institutions mainly apply for the cases of unforeseen circumstances, and in circumstances which may lead to rescission of the contract that are unforeseeable and difficult to be covered up, or in extremely difficult circumstances: “hardship” and “force majeure”. Although the term force majeure is used in the texts of some articles in some principle laws of Turkish legislation, it is not clearly defined in Turkish Commercial Code or Turkish Code of Obligations (“TCO”). Therefore, force majeure definitions and circumstances provided by institutions that lead international contracts, such as the ICC and FIDIC, may be used via reference or directly incorporated into the contract. However, the TCO has regulations regarding consequences of the occurrence of force majeure events, situations that cause hardship, and unforeseen circumstances. Firstly, Article 136 of the TCO regulating the cases where the unforeseen circumstance cause “impossibility of performance”, for either of the parties or both parties, states that “If the performance of debt becomes impossible due to reasons that the debtor cannot be held liable for, the debt shall come to an end;” thus regulating that the debt will come to an end in such a situation. However, with the regulation in the third paragraph of the same Article, “If the debtor fails to timely notify the creditor of the impossibility of performance, and did not adopt measures to prevent the increase of damage, the debtor shall be responsible to compensate the damages that occurred for this reason,” the duty of notifying the parties and duty of precaution has been brought to the parties of the contract. In cases where performance is not entirely impossible, Article 137 of the TCO regulates partial impossibility of performance. “If performance becomes partially impossible for reasons that the debtor cannot be held liable, the debtor shall only dispense with part of the debt which became impossible. However, if it is expressly understood that such a contract will not be executed by the parties if the partial impossibility of performance was foreseen beforehand, the whole debt shall come to an end.”
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