Law of ObligationsFATE OF CONTRACTS SIGNED FOR FAIRGROUNDS DURING COVİD-19

After the pandemic declaration made by the World Health Organization on 12/03/2020, measures have been increased to the extreme in all countries of the world. In our country, we see that these measures are strictly implemented and our days are getting better. One of the measures taken in this process is to postpone the planned exhibition events to a later date. As a result of the measures taken, uncertainties and issues that need to be discussed have occurred in many areas. One of them is the fate of the contract and contract fees signed by the fair organizers and fairground officials for 2020. In case of cancellation of the fair events organized, legal explanation should be made about the obligations in the contracts signed by the parties and the fate of the fair area fees paid and paid by the parties.

Covid-19 epidemic disease has had an influence on many areas due to its force majeure nature. First of all, it will be useful to define the concept of force majeure. The concept of force majeure is not clearly defined in the law. The concept of force majeure in doctrine and Supreme Court Decisions; as a result of unforeseen and unforeseen events that occur against the will of the parties, they are expressed as situations that partially or completely prevent the fulfillment of the contractual responsibilities and obligations of the parties. With the World Health Organization declaring the global risk level as “very high” following the pandemic declaration, the measures taken in our country have been increased to the extreme; People were advised not to go out unless absolutely necessary, schools were closed and universities were closed. Entry and exit to the country is banned, airline traffic is stopped, quarantine practices are initiated in different regions for passengers from abroad. Looking at the scope of these measures, it is obvious that covid-19 epidemic disease is a force majeure for the parties.

As a matter of fact, the General Assembly of the Supreme Court of Law approved this situation by saying in its decision dated 27/06/2018, “Natural disasters such as earthquakes, floods, fires and epidemics are considered force majeure.” (General Assembly of the Supreme Court of Law E.2017/11-90, K.2018/1259, T. 27.06.2018). Both because of the necessary measures taken in our country and in the world, and with the decisions of the supreme court; it is fixed that the global epidemic is included in the concept of force majeure.

In terms of the measures taken, uncertainty prevails in many contractual relations. In this respect, the current legal situation should be clarified in terms of contracts. The concept of force majeure; as described above, it is a state of impossibility. Due to force majeure, many contracts are also encountered with the concepts of performance impossibilities, temporary performance impossibility, suspension of contracts and difficulty performing. In these days when the concept of force majeure exists; it is necessary to examine the concepts of impossibility of performance, temporary impossibility of performance and difficulty performing excessively. These concepts will be examined in this article by reducing them to private in terms of the contracts signed for fair events within the framework of the general provisions.

  • Evaluation in terms of Execution Impossibility and Fair Activities (Turkish Debts Law 136. Item)

According to article 136 of the Turkish Law on Debts; If the performance of the debt becomes impossible for reasons for which the borrower cannot be held responsible, the debt ends. Provisions shall be applied to make performance impossible in the event of force majeure preventing one of the parties from fulfilling their obligations. Impossibility of performance regulated in Article 136 of the TBK; for reasons for which the parties cannot be held responsible, the fulfillment of the debts and responsibilities imposed on the parties comes into play if it becomes absolutely impossible.

It can come across in two ways: the impossibility of execution, the impossibility of continuous performance and the impossibility of temporary performance. Constant impossibility of performance; it is defined as situations where it is not possible to eliminate the situation that prevents the performance of the debt. The impossibility of temporary performance is; the situation that prevents the performance of the debt is the fact that it is not permanent. In case of temporary impossibility of performance, the parties will be able to fulfill their debts after this impossibility situation is eliminated. In the event that the creditor does not have an interest in the subsequent fulfillment of the action in the event of a temporary execution, or if the suspension period becomes unbearable for the parties; the impossibility of temporary performance can be considered as the impossibility of continuous performance.

In the event of an event that can be considered force majeure, it is necessary to determine whether the incident in question caused the impossibility of continuous or temporary performance. If it is accepted that the disease has caused the impossibility of continuous performance in terms of the steps in the contract, the provisions of the provisions of articles 136 and 137 of the CPC shall find the area of application of the provisions of the complete or partial impossibility of the performance of the debt for reasons that cannot be held responsible. Under these provisions, some of the debt will end under the impossibility or partial impossibility. In return, the borrower who has survived the performance of his debt will be obliged to return the statement he received from the other side.

On the other hand, in the event of temporary impossibility, which is not regulated in our legislation and accepted in accordance with the decisions of the Supreme Court and the opinions of the doctrine, it is argued that the contract will survive for a reasonable period of time, which will be determined taking into account the purposes of the parties in making that agreement, but the steps will not be requested. If the period set between the parties is exceeded and the uncertainty that causes the temporary impossibility of performance becomes unprepared for one of the parties to bear, the contract will end on its own in accordance with the provisions of the non-performing impossibility.

The borrower who is freed from debt due to the impossibility of mutual debt-loading contracts is obliged to give back the actions taken by the other side in accordance with the provisions of the provisions of unprovoked enrichment. Otherwise, the provisions of unprovoked enrichment will come into play. The parties also do not have the right to request the performance of the works that have not yet been performed due to the impossibility.

Due to the epidemic within the scope of force majeure, it is possible to cancel the recent fair events. In these cancelled events, the impossibility of performance for the parties is raised. Therefore, the regulatory parties do not have any performance obligations in terms of the cancelled fair events in line with the measures taken during the Covid-19 pandemic. The fees charged must be returned to the event organizers in accordance with the provisions of unprovoked enrichment.

If the fair dates are postponed to a later date, there is a state of temporary impossibility and the provisions of the contract shall remain in place within a reasonable period determined by the parties. In the event that the period set between the parties becomes intolerable or there is no possibility of the performance being performed later; the provisions of the impossibility of continuous performance will be raised, this institution will have provisions and consequences.

  • What is Excessive Execution Difficulty? What will be the evaluations in this context?

Another concept that may come up during our time is the Excessive Execution Difficulty, which is regulated in Article 138 of the Turkish Debt Law. This concept is raised in cases where there is no temporary or permanent execution impossibility, but it is difficult for the parties to fulfill their obligations.

In Article 138 of our Turkish Debt Law, excessive execution difficulties are regulated and this article is in the provision of this article; “An extraordinary situation, which is not foreseen and not foreseen by the parties at the time of the contract, arises for a reason that is not caused by the debtor and changes the existing facts at the time of the contract against the debtor in such a way that it violates the rules of honesty, and if the debtor has not yet fulfilled his debt or has performed it with the reserved rights arising from the excessive difficulty of the performance, if this is not possible, it has the right to return from the contract. In continuously operated contracts, the borrower uses the right of termination instead of the right to return as a rule.”

Accordingly, in order to be mentioned in the Excessive Execution Difficulty, the following conditions can be realized together;

1- The existence of a valid agreement between the parties,

2-The emergence of an extraordinary situation, which was not foreseen by the parties at the time of the agreement and was not expected to be foreseen,

3-This situation is not caused by the debtor,

4-The fact that this situation changed the existing facts at the time of the contract against the debtor in such a way that it violated the rules of honesty to request the performance from him,

5-The borrower must have not yet fulfilled his debt or performed it with the reserved rights arising from the excessive difficulty of the performance.

Basic qualities sought in extreme execution difficulties; Unexpected State, Unpredictability, Excessive Deterioration of The Balance Between Steps. Today, these concepts are mostly of real and legal persons; personal and commercial relations. In this case, when Article 138 of the Turkish Debt Law is warned, the parties shall ask the Court; It may request that the contract be adapted to the new conditions. In cases where adaptation is not possible or will be useless, the parties may have the right to return from the contract.

When examining the impact of the Covid-19 pandemic on contracts, it is necessary to first examine the force majeure and adaptation records in the contract in accordance with the principle of contractual commitment, while evaluating all the provisions of the contract together and determining whether the epidemic constitutes force majeure according to the purpose and subject of the contract. As a matter of fact, it is stated that there is no general acceptance in the determination of force majeure in the opinions of the doctrine and the decisions of the Supreme Court, and that the terms of the concrete event should be evaluated in each contract and the conclusion should be reached. Because it is obvious that the epidemic will not have the same effect on contracts in terms of sectors, processes and conditions.

Again, it should be noted that the principle of contract freedom applies in our law. The parties can determine the scope of force majeure provisions with their own free will in accordance with the principle of contract freedom. For example, in the provisions of the contract signed between the parties; the concepts of force majeure may have been counted as threats. In this case, only the concept of force majeure in terms of the facts and events contained in this article will be able to function. The provisions of the contract signed between the parties are also important in this respect.

If the concept of epidemic disease is included in the contractual provisions and responsibility, no demand for force majeure against the creditor will be made. Therefore, the consequences of force majeure in terms of the performance of the steps in the contract should be carefully examined and evaluated in terms of concrete event. However, in this case, it is worth noting that force majeure provisions imposed in favor of one party may be considered invalid in contracts that impose unilateral regulations on risk sharing of the parties in case of force majeure and contain provisions that are a general trading condition in accordance with Articles 20 and the continuation of the CPC.

Therefore, the existence of the concept of force majeure should be evaluated separately in each concrete case, and whether the parties experienced indecision in the concrete event, and whether the impossibility situation was partial. Other provisions of the Turkish Debt Law should be considered separately in terms of each contract text in terms of the cancelled or postponed exhibition events.