How Defect Notices Trigger Commercial Sales Limitation Periods

Commercial sales contracts are subject to special regulations designed to ensure the smooth and secure conduct of commercial transactions between merchants, in accordance with the provisions of the Turkish Commercial Code (“TCC”) and the Turkish Code of Obligations (“TCO”). In this context, certain burdens and statutes of limitations have been established to ensure that the buyer can exercise their rights in the event the goods sold are defective and to prevent such rights from prolonging uncertainty in ongoing legal relationships. This article addresses the legal nature of notifying a defect (defect notification) in commercial sales, the notification periods, and the effects of defect notification on the statute of limitations period and the suspension or interruption of that period.

I. Obligations and Time Limits for Notice of Defects in Commercial Sales

In commercial sales, the buyer generally has the obligation to inspect the goods. Before asserting a claim based on a defect, the buyer must fulfill the obligation to inspect the goods and promptly notify the seller of any defects discovered. Pursuant to Article 23(1)(c) of the Turkish Commercial Code, different inspection and notification periods are established for sales between merchants, depending on the nature of the defect.

If the defect is clearly apparent at the time of delivery, the buyer must notify the seller of the situation within 2 days from the date the goods were received.

If it is not clearly evident, the buyer must inspect the goods or have them inspected within eight days after receiving them, and if the inspection reveals that the goods are defective, the buyer must notify the seller of this fact within that period.

Pursuant to Article 23(1)(c) of the Turkish Commercial Code (TTK), it is specified that in other cases, Article 223/2 of the Turkish Civil Code (TBK) shall apply. The situation described in Article 223/2 of the Turkish Civil Code (TBK) refers to a defect in the goods that cannot be detected through a routine inspection at the time of sale. This situation is particularly common in the automotive, real estate and construction, electronics and industrial machinery, agriculture and livestock, textiles and raw materials, as well as the pharmaceutical, chemical, and food sectors. In these sectors, the complex technical designs of products, the fact that defects may only become apparent over time, as a result of use, due to varying weather conditions in the regions where they are used, or during the manufacturing/testing phase, and the impossibility of detecting such defects through a superficial visual inspection at the time of delivery, result in a high risk of defects that cannot be detected through a routine inspection.

In such cases, the buyer is obligated to notify the seller immediately upon discovering the defect. Otherwise, the buyer is deemed to have accepted the goods with the defect, and their ability to exercise their discretionary rights arising from the defect is jeopardized.

II. The Legal Nature of Defect Notification and Its Relationship to the Statute of Limitations

In general, the doctrine considers the notification of a defect to be a “burden” that enables the buyer to exercise their statutory discretionary rights (rescission of the contract, request for a price reduction, free repair, or replacement with a defect-free item).

In contrast, the statute of limitations is, by its very nature, a legal institution that grants the debtor the right to avoid performance of the debt (defense).

Pursuant to the provisions of Article 23 of the Turkish Commercial Code (TTK) and Article 244 of the Turkish Civil Code (TBK), claims arising from the warranty against defects in commercial sales are subject to a two-year statute of limitations period beginning from the transfer of possession of the sold item to the buyer.

1. The Direct Effect of Notice of Defect on the Statute of Limitations

One of the issues frequently encountered and confused in practice is whether a notice of defect interrupts or suspends the statute of limitations.

Articles 153 and 154 of the Turkish Civil Code list the grounds that interrupt or suspend the statute of limitations. Among the grounds that suspend the statute of limitations, a situation relevant to the specific case is when the creditor has no means of asserting the claim in Turkish courts. In this case, the statute of limitations does not begin to run; if it has already begun, it is suspended. The statute of limitations begins to run at the end of the day on which the grounds for suspension cease to exist, or it continues to run if it had already begun before the suspension.

The grounds for interrupting the statute of limitations include the debtor’s acknowledgment of the debt, particularly the payment of interest, partial performance, the provision of a pledge, or the presentation of a surety; the creditor’s filing of a lawsuit or a defense with a court or arbitrator, the initiation of enforcement proceedings, or the filing of a claim with the bankruptcy estate.

According to the prevailing view in legal doctrine, a mere “notice of defect” given by the buyer to the seller does not, in and of itself, constitute an act that interrupts the statute of limitations.

As long as the notice of defect remains merely a notification and does not contain a clear demand for performance or an exercise of an elective right, it will not constitute one of the grounds for interrupting the statute of limitations under Article 154 of the Turkish Civil Code. Therefore, if there is a risk that the statute of limitations period will expire, the buyer must take one of the actions that interrupt the statute of limitations (such as initiating enforcement proceedings or filing a lawsuit) within the two-year statute of limitations period, even if the notice was given in a timely manner.

2. Statute of Limitations and Burden of Notice in Cases of Gross Negligence and Fraud

If the seller acts with gross negligence in delivering a defective good or conceals the defect from the buyer through fraud, the protective shield in favor of the seller—regarding both the burden of notifying the defect and the statute of limitations periods—is removed.

Pursuant to Article 225 of the Turkish Civil Code (TBK), a seller who has acted with gross negligence cannot avoid liability—even partially—by claiming that the defect in the sold item was not reported to them within the prescribed time. This also applies to defects that sellers who have made selling their profession are expected to know. In such cases, the 10-year statute of limitations under Article 146 of the TBK will apply.

Regarding how gross negligence is determined, based on legal doctrine and the legislative rationale of the Turkish Civil Code, it is assessed that the seller’s intent regarding the defect also encompasses fraud. Furthermore, for those who have made selling their profession, a failure to be aware of defects that a prudent merchant should know may be deemed gross negligence. However, it is important to note that the existence of gross negligence is a matter that must be assessed separately in each specific case.

III. Conclusion

In commercial sales, the notification of defects is crucial for the continuity of business operations, particularly in certain sectors with unique characteristics. Since a failure to provide timely notice may imply acceptance of the goods in their defective condition, adherence to these time limits is essential for protecting the buyer’s rights. In this context, companies must integrate inspection and notification procedures into their operations. Indeed, to avoid jeopardizing the buyer’s right to choose a remedy and to prevent the defense of the statute of limitations, it is essential to pursue legal remedies that interrupt the statute of limitations.

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.