Contract of Work is regulated under Articles 470 – 486 of the Turkish Code of Obligations ("TCO") numbered 6098, which has been entered into force as of 01.07.2012 after being published in the Official Gazette dated 04.02.2011 and numbered 27836.
Definition of Contract of Work
Article 470 of the TCO defines Contract of Work as "a contract under which the contractor undertakes to perform a certain specified work whereas the principal undertakes to pay a price in exchange".
The New Code of Obligations worded the terms differently than the abrogated Code of Obligations.
Defects Liability of Contractor
The general liabilities of contractor are regulated under article 471 of the TCO, liabilities of contractor with respect to material and equipment are regulated under article 472 of the TCO and liabilities of contractor with respect to timing and performing work are regulated under article 473 of the TCO. The defects liability of contractor is regulated under article 474 and subsequent articles.
Pursuant to Article 474 of the TCO entitled "Determination of Defect", the principal shall examine the work in due course following the delivery and if there is defect or failure of exercising the expected standard skill and care, inform the contractor within a reasonable time.
Each contracting party, at its own cost, may request from an expert to examine the work and compile a report.
Alternative Rights of Principal
In case of a defects liability of the contractor, the alternative rights, which may be exercised by the principal, are set forth under Article 475 of the TCO.
According to the aforesaid article, in case of a defect liability of the contractor, the principal shall exercise either of the following rights:
1. Revocation of contract provided that the completed and delivered work is not suitable for the intended purpose of principal or the work is not incompliance with the contract and therefore it is not justifiable to force the principal to accept the work.
2. Receiving the work as delivered condition and requesting discount proportionate to defect.
3. Requesting the correction of works from the contractor free of charge unless the repair costs considerable amount.
It is stipulated that apart from the above-mentioned alternative rights, the principal's right to claim compensation in accordance with general rules is reserved. Therefore, in case of an occurrence of defects liability of the contractor, the principal is legally entitled to claim compensation.
If the work is performed on principal's immovable property and removal of works will cause considerable damages and be very costly, then the principal cannot exercise right to revocation of contract.
The liability of the principal is regulated under Article 476 of the TCO. As per the aforesaid article, the principal cannot exercise rights if defective work results from the principal's instructions despite the contractor's explicit counter notification or if it results from any other faults attributable to the principal.
Acceptance of Work
Pursuant to Article 477 of the TCO entitled "Acceptance of Work", the contractor is exonerated from liability when the principal accepts the work either explicitly or implicitly. However, the contractor is held liable if the contractor conceals the defect willfully or if defect is not apparent and cannot be detected during the regular examination.
If the principal fails to examine the work within a reasonable time and send notification promptly ―or as soon as defects are spotted where defects could only be detected at a future date―, then it is deemed as acceptance of the work and the contractor may invoke laches.
Limitation Period
In case of defective work, the limitation period for filing a case with respect to movable properties is two years, with respect to immovable properties is five years and if the contractor has gross fault, twenty years commencing from the delivery date.
Conclusion
Contract of Work, defined as a contract under which the contractor undertakes to perform a certain specified work whereas the principal undertakes to pay a price in exchange, is regulated under articles 470 – 486 of the Turkish Code of Obligations numbered 6098, which has been entered into force as of 01.07.2012
In case of an occurrence of defects liability of the contractor, the principal will have three rights which are (i) revocation of contract, (ii) requesting discount proportionate to defect and (iii) requesting repair of work from the contractor free of charge.
The principal can exercise the right to revocation of contract if the delivered work is not suitable for the intended purpose of principal or the work is not incompliance with the contract and therefore it is not justifiable to force the principal to accept the work.
Apart from the abovementioned rights, the principal's right to claim compensation in accordance with general rules is reserved.
In case of defective work, the limitation period for filing a case with respect to movable properties is two years, with respect to immovable properties is five years and if the contractor has gross fault, twenty years commencing from the delivery date.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.