A force majeure event needs to be evaluated for each circumstance; in other words, the contract and the legal relationship itself will be considered differently. The COVID-19 outbreak can significantly affect the performance of obligations under a contract. The question needs to be answered if it is sufficient to excuse a party from performance. Normally, if a party that is prevented from performing its contractual obligations due to an external event claims that such event constitutes a force majeure, then the party has right to avoid liability for non-performance. If the matter is not regulated in a force majeure clause under the relevant contract, the general law will apply.
The Turkish Supreme Court has provided in its various decisions a general outline which helps to identify a force majeure event. As such, a force majeure event usually has the following elements:
(i) It is unforeseeable at the time of execution of the contract,
(ii) It occurs after the execution of the contract,
(iii) It causes impossibility of performance, and
(iv) It occurs outside the control of the parties.
Under Turkish law, the COVID-19 outbreak would not necessarily constitute a force majeure event excusing a party from the performance of its obligations. The performance should become impossible as a consequence of the COVID-19 event. The impossibility may have an objective nature (affecting everyone) or a subjective nature (affecting only the obliged party).
The parties have right to specify the force majeure events in their contracts individually. Therefore, the parties should first review the relevant clauses of their contracts. If the contract is silent with respect to a force majeure event, the COVID-19 outbreak or the public measures taken by the authorities in response must make the performance of obligations significantly impossible for the relevant party in order to be excused from performance and released from liability. It would not be an accurate excuse for such party to claim force majeure if the performance of its obligations has only become more onerous or expensive as a result of COVID-19 outbreak.
If Covid 19 outbreak had a negative impact on your legal transactions; please do not hesitate to contact with our qualified Turkish lawyers.