Can The Coronavirus Pandemic Constitute Force Majeure For Contractual Relations?
Can the Coronavirus Pandemic Constitute Force Majeure for Contractual Relations?
Since the definition and principles of force majeure are not included in Turkish law, the doctrine and case law of the Court of Cassation draw the framework of its application. Considering the relevant case law of the Court of Cassation, it can be said that the existence of force majeure is evaluated separately for each concrete event and is generally interpreted narrowly, especially for merchants. Nevertheless, the conditions for an event to be considered as force majeure can be listed as follows within the framework of the doctrine and the decisions of the Court of Cassation:
The force majeure event must have occurred beyond the control of the parties,
The force majeure event could not have been foreseen at the time of the establishment of the legal relationship, or even if the event was foreseen, it could not have been foreseen that the concrete impact of the event would be so great,
Failure to prevent force majeure from making it impossible to perform the contract performance despite taking all precautions, and
The relevant event is foreseen as force majeure in the contract.
In addition to these basic criteria, the Court of Cassation also evaluates criteria such as whether the alleged force majeure event is effective throughout the country, its effect on similar legal relations and whether the parties are merchants.
Under Turkish law, in the event of a situation such as force majeure, which makes it impossible for one of the parties to perform its obligation, the provisions of Article 136 of the Turkish Code of Obligations (“TCO”) regarding the subsequent impossibility of performance are applicable. Pursuant to the said article, if the performance of the obligation becomes impossible due to reasons for which the obligor cannot be held responsible, the obligation will be terminated. In this case, there will be no breach of contract.
As of today, there is no official declaration, announcement or announcement that the coronavirus may constitute force majeure in Turkey, nor is there a decision of the Court of Cassation. However, it should be acknowledged that the coronavirus is spreading worldwide at a more unpredictable rate compared to other epidemics such as swine flu and avian flu, which are the subject of the existing decisions of the Court of Cassation. Therefore, it may be possible to consider the coronavirus as a force majeure event, especially for companies and individuals who are in commercial relations with countries such as China, Iran, South Korea and Italy, which are heavily affected by the outbreak. However, as mentioned above, the Court of Cassation decides on a case-by-case basis when evaluating force majeure, and the circumstances of the case and the provisions of the contract between the parties shape the Court of Cassation’s assessment to a great extent. It is observed that the Court of Cassation attaches great importance to how force majeure is defined in the contract and what kind of events it covers, especially when it comes to merchants who are expected to act prudently in all circumstances.
If it is evaluated that the effects of the coronavirus have not reached the dimensions that will constitute force majeure, evaluating whether it will be possible to request adaptation from the court within the scope of Article 138 of the TCO may be one of the options that can be applied in order to maintain commercial relations in a healthy manner.
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