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NewsALTERATION IN SUPREME COURT PRECEDENTS REGARDING TO IN COMPLETE PERFORMANCE IN THE CONTEXT OF HOUSE SELL AND PURCHASE AGREEMENTS

Şubat 1, 2013by admin
As is known, the Consumer Protection Law numbered 4077 (“Consumer Law”) aims to protect consumers’ health, security and economical benefits in accordance with public interest. Thus, every consumer action that a consumer is a part of is within the context of Consumer Law. Consumer is defined in the 3rd article of the Law as a real person or a legal entity that obtains a good or service for the purposes other than commercial or professional reasons.

The most current issue in protection of consumer rights is the scope of consumers’ right against defect. Defect might be defined as deficiencies in the good or service that decreases its value or practicableness with regards to assignation and utilization mentioned in the sales agreement. Deficiency notification is subject to a term. This term is regulated in the Law as 30 days upon delivery. By a defection notification served within this term, consumer has rights to ask for return of the consideration and renege on the contract, replace the good with an in-defective one, wage reduction in ratio of defect or free repair. To sum up, defection notification is a precondition to perform said rights. In case deficiency notification is served within its term, seller is obliged to carry out the right that the consumer prefers.

On the other hand, another term to be assessed with “Defected Performance” is “Incomplete Performance”. Incomplete performance means the performance of one party which is inadequate. This term is not regulated in the Consumer Law and the disputes arising from this term shall be resolved in accordance with the general principles of Law of Obligations.

We will be pointing out a significant problem if we approach from “House Sell and Purchase Agreements” and social facilities and common area organisations within the context of Supreme Court rulings.

Supreme Court beforetime has ruled that buyer’s examination and notification obligation shall commence upon delivery (1), not constructing social and sportive facilities committed by the seller is not defective performance, it is incomplete performance and consumer may held the seller liable for 10-year of limitation term in the law suits filed by consumers (2). In a ruling mentioned as an example; Supreme Court quashed the District Court decision which stated; on the grounds that it affects the value of the real-estate that the land on which the social facilities committed to the consumer is located belongs to Toki, it is an explicit defect that the social facilities are built on a land belonging to Toki and the plaintiff did not notify defection or incompletion in accordance with Law of Obligation article 198 and the Consumer Law. The Supreme Court has quashed this ruling since in the 30th article of the Law numbered 4077 it is stated that in case of in-existence of a legal regulation, general principles shall be applied and plaintiff has 10-year of limitation term to hold the seller liable (3).

In another ruling in the same vein, Supreme Court has ruled that not building a pool although it is committed is incomplete performance and in case of an incomplete performance notification is not obligatory. Law-suit in this regard might be filed in 10-year of limitation term in accordance with 125th article of Law of Obligations (4).

In accordance with another Supreme Court decision (5), incomplete performance is not fulfilling the necessary obligations, defective performance is the difference between the qualities in the existing good and committed good. Since it will not be possible to deliver and examine an in-existing performance, it is not necessary for the consumer to notify or accept with prejudice. Notification and examination obligation only stands for defective goods. In accordance with the article 30th of the Law numbered 4077, it is ruled that in the deficiencies of the performance arising from a contract, plaintiff may held the seller liable for 10-year limitation term.

Supreme Court Assembly of Civil Chambers has ruled that an impression as the sports complex belongs to site is made by displaying sports complex in the project, plans and internet advertorial models and by advertising the Project in this way. If these places belong to another person, it increases the value of real-estate and the seller is liable for these deficiencies. There is an incomplete performance in this case and in such case the limitation for notification in defection cannot be applied, the dispute shall be resolved in accordance with the general principles and the seller might be held liable for these deficiencies within 10-year limitation term.

However; the precedent as a notification is not obligatory if the case is incomplete performance and in case of incomplete performance the seller might be held liable in 10 years is altered by another ruling of Assembly of Civil Chambers numbered 2012/13-225 E. 2012/180 K. dated on 16.03.2012 (6 by simple majority. In the said case filed for compensation of increase in real-estate value arising from incomplete performance of the contract, Supreme Court stated that the incomplete performance is not regulated in the law but it may be considered in the context of defective performance regulated in the 4th article of the Law numbered 4077; hence in case of incomplete performance 30-day of notification limit is applicable; a consumer who purchases a house has to notify the deficiencies within 30 days upon delivery; following this notification consumer might ask for compensation in 5 years stipulated for houses in the 4th article of Consumer Law.

It is impossible to contribute with Supreme Court decision from a legal aspect. As a matter of fact, as stipulated in the same ruling as a counter decision, it might take up to 3-4 years to complete environment and common area construction as nature of things. To define defective performance and incomplete performance wrongfully means that in case not notifying the incomplete performance within 30-days, the compensation cannot be claimed. However, the seller must be held liable for incomplete performance in 5 years, not 10 years.
(1) Supreme Court 13.ACC. E.1986/1573.K.1986/2122., dated 08.04.1986
(2) Supreme Court 13. ACC E. 2009/13401, K.2010/7060., dated.25.05.2010.
(3) Supreme Court 13. ACC.,E. 2010/5279.,K. 2010/8356.,dated.10.06.2010.
(4) Supreme Court 13.ACC. E.2010/9741.,K.2010/12564.,dated.4.10.2010;Supreme Court 13. ACC. E.2010/572 K.2010/13235.T.14.10.2010.
(5) Supreme Court 13.ACC.E.2011/2756,K.2011/9888, dated 23.06.2011
(6) T.13-4/230 numbered decision.