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Types of Defect in Consent, under the Turkish Obligations Code

2020, ERDEMİR&ÖZMEN ATTORNEY PARTNERSHIP

Types of Defect in Consent, under the Turkish Obligations Code

In the Turkish Obligations Code numbered 6098 (“the TOC” or “the Code”), the article 1 prescribes that a contract is concluded in case both parties declare their concurring wills. Within this context, such declaration of will may be express or implicit. At this point, the declaration of will for the conclusion of a contract must be given under a proper will and there should not be any factors affecting the free will of the party. However, in certain cases, a proper declaration of will does not take place and the wills of the parties may be affected negatively by external factors. At this point, the defects in consent, regulated by the articles 30-39 of the TOC, come into question.  

It is possible to analyze the defects in consent under three headings: Error, fraud and duress.  

Error

The provisions related to error are set out in the articles 30-35 of the TOC. It should be stated firstly that, as per the article 30 of the TOC, a party laboring under a fundamental error when entering into a contract is not bound by that contract. 

The Code regulates the cases of error in three different types. These are: (i) error in declaration, (ii) error in motive and (iii) error in communicating. Each case of error will be dealt separately in the following paragraphs.  

1- Error in declaration

The provision in the article 31 of the Code contains five different cases of declaration of will, in relation to error in declaration.  

Under the provision in the article 31 of the TOC, these cases are as follows;   

An error is fundamental in the following cases in particular:

1. In case the party, by acting in error, has declared his will for a contract which is different from the contract he actually intends to conclude.

2. In case the party, by acting in error, has declared his will for a subject matter different from the subject matter he actually intends.

3. In case the party, by acting in error, has declared his will of concluding the contract to a person other than the one with whom he actually intends to conclude the contract.

4. In case the party, by acting in error, has declared his will for another person, although he has taken into consideration a person with specific qualifications when entering into the contract.

5. In case the party, by acting in error, has declared his will for an obligation which substantially exceeds the obligation he actually wishes to undertake or for a counter obligation which is substantially less than the one he actually requires.

Simple miscalculations do not affect the validity of the contract, but must be corrected.”

2- Error in motive

The article 32 of the TOC contains provisions regulating error in motive and adopts that an error in motive is not deemed to be a fundamental error. On the other hand, within this context, in the case that, by acting in error, the party considers the motive, in which he is mistaken, as the basis of the contract and that this conforms to the rules of objective good faith applicable in the business relationships, such error shall be deemed to be fundamental. However, it is necessary that this circumstance is also knowable by the other party.

The article 32 of the TOC, regulating error in motive, is as follows;

“An error in motive is not deemed to a fundamental error. In the case that the party acting error considers the motive, in which he is mistaken, as the basis of the contract and that this conforms to the rules of objective good faith applicable in the business relationships, such error shall be deemed to be fundamental. However, it is necessary that this circumstance is also knowable by the other party.”

3- Error in communicating

The article 33 of the TOC regulates error in communicating. In case the will for the conclusion of a contract has been incorrectly communicated via a means of communication or by an intermediary such as messenger or translator, it is possible to say that the case of error in communicating is existing.   

Under the article 33 of the TOC, the provision related to error in communicating is as follows;  

“The provisions governing error shall also apply in case the will for the conclusion of a contract has been incorrectly communicated via a means of communication or by an intermediary such as messenger or translator.” 

It should be stated importantly that, as per the TOC art. 34 bearing the heading “Rules of objective good faith in acting in error”, the party acting in error is not entitled to assert, in violation of the rules of objective good faith, that he is mistaken. Particularly in case the other party declares that he accepts the conclusion of the contract in the sense intended by the party acting in error, the contract shall be deemed to have been concluded in that sense.  

Besides, as per the TOC art. 35 bearing the heading “Culpability in acting in error”, in case the party acting in error is at fault in being mistaken on his part, he is obliged to compensate the loss arising from the nullity of the contract. However, if the other party knows or should know the error, it will not be possible to claim compensation. Thus, in the cases required by equity, the judge may adjudge for compensation provided that this does not exceed the benefit expected from the fulfillment.

Fraud

The provisions related to fraud are set out in the article 36 of the TOC. It is adopted that a party induced to enter into a contract by the fraud of the other party is not bound by such contract, even if his error is not fundamental.  

However, a party who has entered into a contract by the fraud of a third party shall not be bound by such contract provided that the other party knows or in a position which would allow him to know the fraud at the time of the conclusion of the contract.  

The provisions related to fraud are set out by the article 36 of the TOC. These provisions are as follows;

“A party induced to enter into a contract by the fraud of the other party is not bound by such contract, even if his error is not fundamental.

A party who has entered into a contract by the fraud of a third party shall not be bound by such contract provided that the other party knows or in a position which would allow him to know the fraud at the time of the conclusion of the contract.”

Duress

The provisions related to duress are regulated by the articles 37 and 38 of the TOC. Within this context, in case a party has entered into a contract under duress from the other party or a third party, he shall not be bound by that contract. If the duress is committed by a third party and if the other party is not aware of the duress, the party under duress may be obliged to pay compensation to the other party in the cases required by equity.  

The provisions related to fraud are contained in the article 37 of the TOC. These provisions are as follows;

“In case a party has entered into a contract under duress from the other party or third party, he shall not be bound by that contract.

In the case that the duress is committed by a third party and that the other party does not know or is not in a position which would allow him to know the duress, the party under duress, who does not wish to be bound by the contract, is obliged to pay compensation to the other party if required by equity.”

Thus, the article 38 of the TOC sets out the conditions of duress in order to determine whether or not a duress actually takes place. Within this context;  

“The duress shall be deemed to have taken place if the party under duress has a good cause to believe that, in the circumstances he is experiencing, there is imminent and substantial risk of damage or loss against the assets or the personal rights of him or one of the persons close to him.

When a contract is entered into under the duress that a right will be exercised or that an authority arising from the laws will be exercised, the existence of duress shall be adopted in case the party, who has declared that he will exercise this right or authority, has derived an excessive personal benefit from the other party’s being stuck in such difficult situation.”

Elimination of defect in consent

As per the TOC art. 39 bearing the heading “Elimination of defect in consent”, if the party, who has entered into a contract by acting in error, by fraud or under duress, does not declare that he is not bound by the contract or does not reclaim the thing he delivered, in which case he must make this declaration or reclaim the thing within one year starting from the moment that he has found out the error or the fraud or that the effect of the duress has ceased to exist, he shall be deemed to have assented to the contract.  

The provisions of the TOC art. 39 related to the elimination of defect in consent are exactly as follows;  

“If the party, who has entered into a contract by acting in error, by fraud or under duress, does not declare that he is not bound by the contract or does not reclaim the thing he delivered, in which case he must make this declaration or reclaim the thing within one year starting from the moment that he has found out the error or the fraud or that the effect of the duress has ceased to exist, he shall be deemed to have assented to the contract.

The fact that a contract, which is not binding due to fraud or duress, is deemed to have been assented does not eliminate the right to compensation.”

It should be stated that, in case a contract which has no bindingness due to fraud or duress is deemed to have been consented, as prescribed by the above provision, this case shall not eliminate the right to compensation.

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