Defects of Consent

A defect of consent exists where a party concluded a contract under conditions that did not reflect its true intent. The Turkish Code of Obligations gives the affected party the right to declare that it is not bound. There are three types.

Mistake (TCO Articles 30-35)

A party who concluded a contract under a fundamental mistake is not bound. Examples of fundamental mistake:

• Mistake as to the type of contract
• Mistake as to the subject matter or the person
• Significant mistake as to the quantity of performance
• Mistake as to a circumstance that, in good faith, forms the basis of the contract (basic error)

A mistake merely as to motive is generally not fundamental. Calculation errors do not affect validity and are corrected. A party who made a mistake through its own fault may have to compensate the other party even if released from the contract.

Fraud (TCO Article 36)

A party induced to contract by the other party’s fraud is not bound, even if the mistake is not fundamental. Where a third party committed the fraud, the same applies if the other party knew or should have known.

Duress (TCO Articles 37-38)

A party who contracted under duress by the other party or a third party is not bound. Duress exists where the party was justified in believing that there was a serious and imminent danger to their own or a relative’s personal or property interests. Threatening to exercise a right counts as duress only if used to obtain an excessive advantage.

Time Limit and Effect (TCO Article 39)

A party who does not declare within one year of discovering the mistake or fraud, or of the end of the duress, that it is not bound, or does not reclaim what it gave, is deemed to have ratified the contract. Ratification of a contract affected by fraud or duress does not extinguish the right to damages.

Merchants

Because of the duty to act as a prudent businessperson, merchants’ claims of mistake are assessed more strictly. See also Gross Disparity.