Performance of the Contract and Contract Management
Contract risk does not end with the signature. Documenting delivery, acceptance, payment, notice and amendment processes in accordance with the contract is important for protecting rights in the event of a dispute.
- Place of performance, time of performance, maturity and delivery terms
- Partial, incomplete, defective, late or improper performance
- Delivery, inspection, acceptance and rejection procedures
- Progress payment, invoice, payment, set-off and deduction processes
- Variations, additional work, scope changes and extensions of time
- Giving contractual notices within the right time and by the right method
- Renewal, price updates and periodic review
- Service level, performance criteria and reporting provisions
- Tracking the contract calendar, the list of obligations and critical time limits
- Recording disputes that arise during performance and reserving rights
Breach of Contract, Default and Defective Performance
The rights that may be exercised when the contract is not performed at all, is performed late, incompletely or improperly vary according to the type of contract, the nature of the breach, fault, damage and the notices given within time.
- Determining whether the debt has fallen due
- Whether a formal notice or a deadline is required for default
- Claims for specific performance and for damage caused by delay
- Granting an additional period and cases that do not require one
- Waiving performance, rescission of the contract or termination of a continuing contract
- The distinction between positive and negative damage
- Defect notice, inspection and notification obligations
- Options of repair, replacement, price reduction, rescission of the contract and compensation
- Validity of provisions that limit or exclude liability
- Contributory fault, the duty to mitigate damage and causation
- The effect of the breach on the other performances under the contract and on related contracts
Termination, Rescission and Ending of the Contract
“Termination”, “rescission of the contract”, “avoidance” and “expiry” do not produce the same legal consequence. The route to be used must be determined according to whether the contract is a continuing one or one of instantaneous performance, the statutory or contractual ground, and the effect of the ending on the past or the future.
- Ordinary and extraordinary termination
- Termination for cause
- Rescission of the contract and mutual restitution
- The right of withdrawal and contractual withdrawal clauses
- Expiry of the term in fixed-term contracts
- Automatic renewal and notice of non-renewal
- Termination by mutual agreement (ikale) and mutual termination protocols
- Form, content and service of a termination or rescission notice
- Continuation of confidentiality, competition, return of data and intellectual property provisions after the contract ends
- Return of advances, security, materials, documents and data
- The effect of the ending on settlement of accounts, compensation and contractual penalty
Adjustment, Force Majeure, Excessive Hardship and Impossibility
A change in economic, legal or factual conditions after the contract is made does not remove the obligation in every case. Who bears the risk under the contract, the foreseeability of the event, the fault of the party, whether performance is possible and the type of contract are reviewed together.
- Drafting force majeure and unforeseen circumstances clauses
- Obligations to give notice, mitigate damage and submit documents
- The effect of changes in exchange rates, costs, inflation, supply, embargoes and legislation
- A request for adjustment due to excessive hardship
- Options of rescission or termination if adjustment is not possible
- The effect of the ending in continuing contracts
- Subsequent impossibility with and without fault
- Partial impossibility and the position of the counter-performance
- Renegotiation provisions and interim arrangements while the dispute continues
Prepare the First Notice Correctly in Case of a Breach
It must be determined which obligation has been breached, the document that shows it, the demand for performance or remedy, and the legal route to be used. A formal notice, an additional period, the reservation of rights and the notice channel are not subject to the same rule in every contract.
A price increase is not an automatic right to terminate
Adjustment under Article 138 of the Turkish Code of Obligations is addressed by assessing together the extraordinary change, unforeseeability, the fact that it did not originate from the debtor, and the conditions of performance. It matters whether the debt has not yet been performed or is performed with rights reserved. If adjustment is not possible, rescission may come into question, and in a continuing relationship, as a rule, termination.
Settlement after the contract ends
The return of advances, delivered work, security, data, access authority and documents is planned separately. Starting negotiations does not automatically suspend all obligations and statutory time limits.