{"id":155532,"date":"2026-04-03T16:47:53","date_gmt":"2026-04-03T13:47:53","guid":{"rendered":"https:\/\/paksoy.av.tr\/?p=155532"},"modified":"2026-04-03T16:47:53","modified_gmt":"2026-04-03T13:47:53","slug":"force-majeure-and-hardship-an-assessment-in-light-of-current-issues","status":"publish","type":"post","link":"https:\/\/paksoy.av.tr\/en\/2026\/04\/force-majeure-and-hardship-an-assessment-in-light-of-current-issues\/","title":{"rendered":"Force majeure and hardship: An assessment in light of current issues"},"content":{"rendered":"

Price fluctuations in oil markets resulting from geopolitical tensions adversely affect companies operating in numerous sectors, particularly energy-intensive industries. Such price volatility and shifts in supply\u2013demand dynamics have brought the concepts of force majeure and hardship back into focus, particularly in relation to raw material and energy costs.<\/p>\n

This newsletter provides an overview of these two concepts, along with our assessments in light of current market developments.<\/p>\n

Force Majeure<\/strong><\/h2>\n

Force majeure is recognized under Turkish law as the complete impossibility of performance of an obligation due to an event that arises after the formation of a contract, which the parties could not have foreseen and which is beyond their control. Events that may be considered within the scope of force majeure include war, acts of terrorism, natural disasters, embargoes, and the closure of trade routes.<\/p>\n

Although force majeure events are often regulated in detail as a separate contractual provision in practice, their legal basis under Turkish law is the impossibility of performance provision set forth in Article 136 of the Turkish Code of Obligations No. 6098 (the \u201cTCO<\/strong>\u201d). Accordingly, circumstances such as war or natural disasters enumerated as force majeure events in a contract shall only result in the termination of the contract to the extent that they render the performance of the obligation impossible. Where a circumstance not expressly listed in the contract gives rise to impossibility of performance, Article 136 of the TCO may directly apply and the contract may be terminated on the grounds of impossibility of performance. However, it should be noted that force majeure covers only situations where performance has become impossible; mere difficulty of performance or an increase in costs cannot, on its own, be assessed within this scope.<\/p>\n

In addition to impossibility of performance, the other criteria are that the obligor cannot be held responsible for the situation in question and the requirement of unforeseeability. The criterion of unforeseeability is assessed with reference to the prevailing time and region. The Court of Cassation has also emphasized, within the scope of the duty of care upon a prudent merchant, the necessity of taking definitive precautions against dangers such as internal unrest, attacks, and similar threats in countries where such threats frequently arise.<\/p>\n

In cases where performance has not become impossible but the conditions for the fulfillment of the obligation have become excessively more onerous, the adaptation or termination of the contract may come into question within the scope of “hardship”.<\/p>\n

Hardship<\/strong><\/h2>\n

Under Turkish law, hardship refers to a situation where, due to extraordinary developments arising after the formation of the contract, the balance between the contractual obligations is seriously disrupted to the detriment of the obligor, such that requiring performance would be contrary to the principle of good faith. Hardship leads to the adaptation of the contract or, as a last resort, to the termination of the contract.<\/p>\n

Pursuant to Article 138 of the TCO, the elements of hardship are as follows:<\/p>\n

    \n
  • Disruption of the balance between the obligations to such an extent that demanding performance would constitute a violation of the principle of good faith;<\/li>\n
  • An extraordinary and unforeseeable change in circumstances occurring after the conclusion of the contract;<\/li>\n
  • The situation not being attributable to the fault of the obligor; and<\/li>\n
  • The obligation not yet having been performed (or the obligor having performed its obligation while reserving its rights arising from hardship).<\/li>\n<\/ul>\n

    Where these conditions are met, the obligor may request the adaptation of the contract to the new circumstances; and where adaptation is not possible, may seek rescission of the contract. Unlike force majeure, in cases of hardship, performance is not entirely impossible; however, it has become disproportionately onerous compared to the original conditions.<\/p>\n

    In the decisions of the Court of Cassation, it has been observed that, due to the obligation of merchants to act prudently, the criterion of unforeseeability is not satisfied in certain cases, and consequently, requests for adaptation have been rejected.<\/p>\n

    It should be borne in mind that hardship, which constitutes an exception to the principle of pacta sunt servanda<\/em> \u2014 expressing the binding nature of contractual commitments \u2014 is, by its nature, a remedy of last resort (ultima ratio<\/em>).<\/p>\n

    Assessment Regarding Current Issues<\/strong><\/h2>\n

    Although there is debate in practice as to whether fluctuations in oil and energy prices alone may constitute force majeure, mere price increases will not give rise to force majeure and, consequently, will not result in the automatic termination of the contract. This is because a price increase, on its own, does not render performance impossible but merely makes it more costly. On the other hand, where production or shipment cannot be physically carried out as a direct consequence of events such as war or the closure of maritime routes, a force majeure claim may rest on stronger grounds. The principle of the prudent merchant also plays a decisive role in this assessment. According to the case law of the Court of Cassation, merchants are obligated to take the necessary precautions against foreseeable risks in the course of their commercial activities.<\/p>\n

    Particularly in claims based on cost increases, in addition to the prudent merchant assessment, the evaluation of unforeseeability and whether the balance of obligations between the parties has been disrupted to an excessive degree will be of significance. In this context, the assertion by companies operating in war zones or regions of high geopolitical risk that oil price risk constitutes an unforeseeable development will be subject to such an assessment, and the criteria pertaining to hardship will be evaluated on a case-by-case basis.<\/p>\n

    The assessment in the decision of the General Assembly of Civil Chambers of the Court of Cassation dated 12.11.2014 provides important guidance regarding the criterion of unforeseeability:<\/p>\n

    “In our country, devaluations have been declared since 1958 and frequent monetary adjustments have been implemented, resulting in the depreciation of the Turkish currency against the US dollar and other foreign currencies. The unstable economic situation in our country is a circumstance that could have been anticipated by the plaintiff. In the present case, the element of unforeseeability, which is a condition for adaptation, has not been established.<\/em>\u201d<\/p>\n

    Although the assessment of fluctuations in oil prices within the scope of hardship appears theoretically more feasible, all aspects pertaining to the specific circumstances must be taken into consideration. For instance, if the contract was concluded during a period when oil prices were already elevated or when price fluctuations in the markets had already emerged, it may be argued that the condition of unforeseeability has not been satisfied.<\/p>\n

    In addition to statutory provisions, the manner in which the relevant provisions in contracts are drafted may also play a decisive role in the assessment of adverse circumstances that arise.<\/p>\n

    Finally, we would like to note that, with respect to international commercial sale contracts, a separate assessment may also need to be conducted under the United Nations Convention on Contracts for the International Sale of Goods (CISG), where applicable pursuant to the contract.<\/p>\n

    Conclusion and Recommendations<\/strong><\/h2>\n

    Fluctuations in oil prices and geopolitical developments necessitate that the relevant parties adopt a proactive legal strategy with respect to their contractual obligations. While force majeure and hardship may serve as powerful legal instruments where the requisite conditions are met, their successful invocation depends on the manner in which the contract has been drafted and the circumstances of the specific case. Accordingly, it is strongly recommended that existing contractual structures be reviewed in light of such risks and updated to reflect current market conditions.<\/p>\n

    In this regard, protective provisions addressing extraordinary increases in oil, energy, and raw material prices, as well as price indexation mechanisms establishing threshold prices for various raw materials and price adjustments based on such thresholds, will mitigate potential risks that may arise in connection with adaptation claims.<\/p>\n

     <\/p>\n","protected":false},"excerpt":{"rendered":"

    Price fluctuations in oil markets resulting from geopolitical tensions adversely affect companies operating in numerous sectors, particularly energy-intensive industries.<\/p>\n","protected":false},"author":3,"featured_media":155537,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[281],"tags":[],"class_list":["post-155532","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-publications"],"acf":[],"yoast_head":"\nForce majeure and hardship: An assessment in light of current issues | Paksoy Attorneys at Law<\/title>\n<meta name=\"description\" content=\"Price fluctuations in oil markets resulting from geopolitical tensions adversely affect companies operating in numerous sectors, particularly energy-intensive industries.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, 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