Turkish Law Blog

Contracts against the Ordinary Course of Living under Turkish Contract Law

Zekeriya Kurşat, Prof. Dr. Zekeriya Kurşat, Prof. Dr./ Istanbul University
Tolga Özer, Asst. Prof. Dr. Tolga Özer, Asst. Prof. Dr./ Turkish-German University
29 January, 2020
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A. Fundamental Principle: Freedom of Contract

According to the principle of freedom of contract applicable under Turkish Law, as a rule, parties have the freedom to make contracts with any content. Thereby, parties are not obliged to draw up contracts that are considered reasonable by everyone or that are in line with the ordinary course of living. It is possible to depart from this ordinary course and conclude contracts that third parties may find vacuous or unaccustomed. For example, a person may sell his/her immovable property at half-price; gratuitously waive any of his/her rights; or make a contract to have his/her money counted every day or have himself/herself shot.

B. System of Nullity versus Fundamental Principle

There is no doubt that the freedom of contract allows parties to make contracts in the manner and with the content mentioned above. However, under certain circumstances, such contracts may violate the requirements for validity and therefore may be prevented from bearing any legal consequences according to the legal system. For example, the contract to have oneself shot shall not be effective as it violates personal rights. That is to say, the system of nullity comes into effect against the fundamental principle of the freedom of contract in order to protect the parties or the public order, as the case may be. Parties may contract as they wish; however, the contract may not bear any legal consequences if it exceeds the limits of the legal order.

C. Status of Contracts against the Ordinary Course of Living under the Turkish Legal System

In cases where there is no clear reason for invalidity as is given above, it must still be noted that the Turkish legal order acts with caution in case of contracts against the ordinary course of living.

A doubt would inevitably arise, if and when a departure from the ordinary course of living occurs. As the transaction is not deemed reasonable, it raises doubts about whether the parties have the capacity to act or whether the transaction reflects their true will.

1. Possibility of Invalidity

For example, a party sells his/her house, which is worth $200,000, for $40,000. In principle, one may make a contract of sale at a lower price in order to do a favor to his/her close friends, relatives, or siblings or as a result of urgent financial needs. Although such a contract shall be valid in principle, the existence of a justification that will render this contract reasonable must be separately proven. Otherwise, the contract with low price may be deemed invalid due to lesion, immorality, coercion, collusion, or mental incapacity.

2. Possibility of Affecting the Nature of the Contract

Apart from its validity, the fact that a contract is incompatible with the ordinary course of living will affect the interpretation of its nature. For example, while the parties may call the contract a “contract of sale,” the commitment to sell an already leased property below the market value may be interpreted as a financial lease agreement.

According to Article 19 of the Turkish Code of Obligations (“TCO”), in the event that parties conceal their real purpose or will and publicly declare a different purpose or will, the contract shall be treated in accordance with their real purpose and will. It is because in such circumstances, parties are deemed to conceal their true intentions, in particular with the aim to deceive third parties or paint a different picture than the truth. In that case, the alleged transaction shall be regarded as collusive and therefore, shall not bear any legal consequences. According to Article 19 of the TCO, what bears legal consequences is not the alleged transaction, but the actual transaction between the parties, if any.

3. Possibility of Affecting the Burden of Proof

Article 6 of the Turkish Civil Code (“TCC”) on the burden of proof states that unless otherwise provided by law, each party is obliged to prove the existence of facts on which he/she is based. However, as acknowledged in the legal doctrine, the main exception to this general rule under Article 6 of the TCC is the principle that the burden of proof to lie with the party whose claim or plea is against the ordinary course of living.

Whether a particular circumstance is compatible or incompatible with the ordinary course of living is determined based on general experience and generally accepted standards in the relevant setting.[1] In the legal doctrine, this principle is called as presumption of fact or prima-facie evidence.[2] As is generally accepted, if presumptions of fact are strong enough to lead the judge to form an opinion about the related matter, it is considered that a qualified piece of evidence about the relevant case is submitted and that the burden of proof is met. In this case, the procedure of proof is fulfilled based on the presumption of fact, and the obligation to provide evidence shifts to the other party.

It can be seen that the Turkish Court of Cassation has adopted the same principle in its several judgments and held that the burden of proof shifts in the relevant disputes. As a matter of fact, the Court of Cassation General Assembly of Civil Chambers confirmed, in one of its judgments, that presumptions of fact constitute an exception to Article 6 of the TCC by noting, “Presumptions of fact and widely-acknowledged ordinary circumstances necessitated by the matter of facts and experiences of changing life, in other words, the facts that eliminate the burden of proof as exceptions to the general rule expressed in Article 6 of the TCC shall be interpreted on behalf of the creditor under the rules of evidence, and the burden of proof shall be deemed to lie with the debtor who asserts the contrary.”[3]  

In a judgment, the 10th Civil Chamber of the Court of Cassation clearly stated that the party whose claim is compatible with the ordinary course of living is not obliged to prove his/her claim: “[I]t is one of the fundamental principles of procedural law that the party whose claim is based on a matter of course is not obliged to prove his/her claim and that the burden of proof lies with the other party who asserts the contrary of that matter of course. In other words, the party whose claim is supported by the presumption of fact, which relies on inferences about an unclear situation based on certain matters of fact, is not obliged to prove his/her claim, and the burden of proof is on the party who asserts contrary to that presumption.[4]

4. Approach of the Court of Cassation

The 9th Civil Chamber of the Court of Cassation has noted in a judgment that certain interests are prevailing in business life, rather than grace or beneficence, and that, as a result of the ordinary course of living, the burden of proof lies with the party who claims otherwise.[5] Therefore, it has been concluded that the party who claims that it is reasonable to execute an unreasonable contract or that there exists a reason behind that contract must prove his/her claim.

For example, the Court of Cassation found that the fact that the claimant, who had been employed for a long time, agreed to terminate his/her contract of employment through a mutual termination agreement without deriving any benefits other than his/her severance pay and legal rights was not compatible with the ordinary course of living.[6]

In another judgment, the Court of Cassation stated that “It is not a customary practice in our country to rescue distrained movable properties and then to give them as a gratuitous loan. It deems against the ordinary course of living for a third-party to loan the same movable properties to the spouse of the borrower, who could not pay his/her debt and whose properties were sold in the first place”, and thus concluded, “Purchasing and loaning become a way of protecting the borrower from subsequent distraints. It is evident that the transaction of purchase and loan agreements that are clearly collusive (fictitious) cannot be protected by law.[7]

In another judgment, the Court noted that “The immovable property in question was purchased from the debtor by a third party and sold to a fourth party. The fact that an immovable property is sold twice for the same price with an interval of 9 days cannot be considered to be compatible with the ordinary course of living”. Therefore, based on the presumption of fact, it found the transaction in question invalid due to collusion.[8]

The Court of Cassation interpreted the preference of other contracts over normal contracts that may be encountered in the ordinary course of living as a proof of collusion and provided the following reasoning: “Where a seemingly preliminary contract for sale was made with the intention of making a contract of guarantee, it cannot be said that there is a promise for the sale of a real estate property. In this regard, when it is found that the preliminary contract for sale is actually a contract of guarantee, the claimant may not request the transfer of the property to him/her based on the said contract. There is no doubt that when an allegation of collusion is introduced under such an argument, the argument has to be proved with written evidence [by the respondent]. However, in the event of circumstances that clearly contradict the requirements of a particular case and the ordinary course of living; the party whose claim is against the ordinary course of living must prove its claim. In the present case, the fact that the claimant purchased the immovable property of the defendant through a preliminary contract for sale on the day he/she cleared the credit debt of the defendant, that he/she did not choose to purchase the property through the Land Registry Office, although he/she was able to do so, and that he/she did not file any lawsuits for approximately three years from the contract date indicates, in the ordinary course of living, that the contract was made as a guarantee of the loan agreement. Accordingly, the claimant is then obliged to prove otherwise, i.e. that the contract was actually a preliminary contract for sale.”[9]

In a judgment, the Court deemed the release from debt, which included deviations from the ordinary course of living, as invalid by noting that, “In the present case, the certificate of release on which the claimant based his/her claim does not clearly refer to the promissory note on which the proceedings were based. The promissory notes are hold by the creditor. Moreover, the fact that the promissory notes were issued with on same date as the certificate of release is against the ordinary course of living[10]; while in another judgment, it found that the fact that a wage earner grants a release from debt without any reason was against the ordinary course of living under the following terms: “The worker provides for himself/herself and his/her family with the wage and other monetary rights he/she earns. In this sense, the fact that the worker releases the employer from debt without any reason is deemed incompatible with the ordinary course of living.”[11]

As can be seen, the Court of Cassation usually deems the contracts or the content of contracts that are against the ordinary course of living invalid due to collusion and holds that the party whose claim is against the ordinary course of living is obliged to prove his/her claim.[12]

D. Conclusion

Under the fundamental principle of the freedom of contract, Turkish law allows parties to make contracts with any content they wish. However, this fundamental rule is restricted both by the system of nullity and by the facts of life. The contents of contracts that are against the ordinary course of living and are deemed unreasonable shall certainly raise suspicions. The suspicions of the legal system about such contracts are connected with the principle of the contract theory, which is based on free will. This is because, if and when possible, the true will of the parties should be determined and linked to its legal consequences. The same applies to the approach of our legal system towards unreasonable contracts. The party who claims that such a contract shall be deemed reasonable is obliged to prove the existence of valid reasons. Otherwise, the contract will inevitably be interpreted in accordance with the true will of the parties or will be deemed invalid.


[1]        Sema Başpınar, “Fiili Karinelerin İspat Yükünün Dağılımındaki Rolü” [The Role of Presumptions of Fact in the Distribution of the Burden of Proof], Ankara Üniversitesi Hukuk Fakültesi Dergisi, Volume: 53, Issue: 1, p. 551-556.

[2]        Yavuz Alangoya, “’Senede Karşı Senetle İspat’ Kuralı ve ‘Hayatın Olağan Akışı’ Kavramı” [The Rule of “Proof with Promissory Note Against Promissory Note” and the Concept of “Ordinary Course of Living”], Prof. Dr. Necip Kocayusufpaşaoğlu için Armağan, Ankara, Seçkin Yayıncılık, 2004, p. 528.

[3]        For the text of the judgment, see Court of Cassation General Assembly of Civil Chambers. July 05, 2000, File No. 2000/2-1072; Decision No. 2000/1124. The General Assembly of Civil Chambers of the Court of Cassation repeated its opinion on the same matter in another judgment using the following statement: “In the face of the presumption of fact, the claimant is not obliged to prove his/her loss as a separate matter.” For the text of the latter judgment, see Court of Cassation General Assembly of Civil Chambers, November 5, 2003, File No. 2003/13-657; Decision No. 2003/628.

[4]        For the text of the judgment, see Court of Cassation, 10th Civil Chamber, September 26, 2006, File No. 2006/11879, Decision No. 2006/11666. For another judgment where the 10th Civil Chamber of the Court of Cassation repeated the same opinion, see Court of Cassation, 10th Civil Chamber, October 1, 2012, File No. 2011/5228, Decision No. 2012/16741.

[5]        Court of Cassation, 9th Civil Chamber, May 9, 1967, File No. 1967/4404, Decision No. 1967/3965.

[6]        Court of Cassation, 22nd Civil Chamber, December 22, 2011, File No. 2011/4403, Decision No. 2011/7992.

[7]        Court of Cassation, 21st Civil Chamber, November 20, 2008, File No. 2008/1424, Decision No. 2008/17987.

[8]        Court of Cassation, 17th Civil Chamber, May 29, 2008, File No. 2007/5644, Decision No. 2008/2240.

[9]        Court of Cassation, 14th Civil Chamber, October 17, 2000, File No. 4328, Decision No. 6321.

[10]      Court of Cassation, 12th Civil Chamber, December 11, 1986, File No. 1986/3533, Decision No. 1986/14144.

[11]      Court of Cassation, 9th Civil Chamber, November 12, 2009, E. 2008/12007, Decision No. 2009/31389.

[12]      More examples of decisions where the Court of Cassation concluded that the burden of proof shifted due to the presumption of fact may be provided. See Court of Cassation, 14th Civil Chamber June 5, 2008, File No. 2008/1867, Decision No. 2008/7303; Court of Cassation, 8th Civil Chamber, September 12, 2017, File No. 2015/18986, Decision No. 2017/10499; Court of Cassation, 8th Civil Chamber, July 4, 2017, File No. 2017/12992, Decision No. 2017/9808; Court of Cassation, 1st Civil Chamber, February 23, 2016, File No. 2015/893, Decision No. 2016/2058; Court of Cassation, 1st Civil Chamber, September 8, 2014, File No. 2014/9768, Decision No. 2014/13742; Court of Cassation, 13th Civil Chamber, October 25, 2005, File No. 2005/9006, Decision No. 2015/15905; Court of Cassation, 13th Civil Chamber, November 1, 2002, File No. 2002/8240, Decision No. 2002/11532.

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