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Covid-19

To what extent is the Covid-19 pandemic considered a “force majeure” excuse in contractual relations?

Although it is a commonly used concept in practice, the definition and conditions of force majeure are not stipulated in the Turkish legislation; therefore, we determine the scope of the implementation of this concept within the framework of doctrine and the Court of Appeals precedents. Accordingly, the necessary conditions for evaluation of an event as force majeure are as follows:

  • The event should take place outside the control areas of the parties,
  • At the date of commencement of the legal relationship, the event should be unpredictable, and even if it is foreseen, it should not be predictable that its concrete effects will be on such a scale,
  • The party should fail to prevent the event from making the performance of the contract impossible despite all measures being taken, and
  • In the contract, it should not be determined that the relevant event will not be accepted as force majeure.

In addition to these fundamental criteria, the Court of Appeals also considers criteria such as whether the alleged force majeure event is effective throughout the country on similar legal relationships and whether the parties are merchants.

As of the date of this answer, there is no Court of Appeals precedent ruling that COVID-19 may constitute force majeure. For this reason, it is not possible to give a clear response to this question. However, considering the Court of Appeals precedents regarding previous epidemics and other extraordinary events, we can say that the Court of Appeals has rendered its decisions on the force majeure claims on a concrete event basis, taking into account the circumstances of the event and the provisions of the contract. Therefore, it is important to determine whether epidemics are listed within the scope of the force majeure clause in the contract and/or make it permanently or temporarily impossible for the debtor to perform its debt under the circumstances of the concrete case.

Accordingly, where no force majeure clause is included in the contract, existence of force majeure can be accepted if it is proven that COVID-19 outbreak or the measures taken against it cause impossibility of performance.

Although there is a force majeure clause in the contract, if epidemic disease is not included therein, it will be important whether the clause counts the events that constitute force majeure numerus clausus. For example, where there is a clause on force majeure in the contract stating that “it has been decided by the parties that the events that constitutes force majeure shall be limited to the following situations”, the assertion of force majeure may not be accepted unless an epidemic disease or an administrative decision given for that reason is among the examples in that clause. On the other hand, where events that constitutes force majeure are determined by a phrase such as “events that constitutes force majeure are as follows, including but not limited to the following examples”, it is possible to assert by interpretation that conditions of force majeure are established, even if the contract does not include the expression of epidemics or administrative decisions.

It should also be noted that in cases where the performance of the debt in the contract does not become impossible due to the effect of the disease but it becomes too difficult to expect from debtor to bear it, hardship may be discussed under Turkish law instead of force majeure.