Annulling consumer contracts where there is no defect

  • February 9, 2022
  • Posted by: Cihangir Karabıyık
  • Category: Contract Law
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This article pertains to consumer contracts only, which are defined as a contract entered into by a person (the consumer) with no intention to use the purchased goods for professional or commercial purposes.

There are different possible routes for different scenarios with respect to the consumer’s right to annul the contract, under Turkish law.

A.        Face-to-face Sales

Assuming that the seller is not in default or breach of the contract (i.e. the goods are not defective[1]), an unconditional and statutory right to annul[2] the contract for the consumer for face-to-face transactions conducted in shops exists only in limited circumstances, as described below.

  1. If the sales was conducted on terms set out in writing in an agreement, and such agreement involves clauses heavily favoring the seller, which clauses are unilaterally imposed by the seller without negotiating with the consumer first, then all such clauses in the agreement are deemed null and void by the Act on Consumer Protection (4077) (Tüketicinin Korunması Hakkında Kanun, “TKHK”) and the Regulation on the Unfair Terms in Consumer Contracts (25137). If the voiding of such clauses render the entirety of the agreement unenforceable, then the agreement itself is annulled as well, without any consequence for the consumer, who gets to return the goods and retrieve the price from the seller. All “fill-in” form agreements (including banking agreements, online sales agreements, etc.) are deemed non-negotiated and therefore the onus is on the seller to prove that an unfair standard term was actually negotiated with the consumer (in parallel with the EU Directive 93/13).
  2. If the seller has made it explicit that it grants its customers the right to return the goods, then this right is enforceable as if granted by mutual agreement. This declaration may be made on the invoice, in the shopping area, on the seller’s website, on advertisement, or any other public medium. Please note that this is not a statutory/regulatory requirement, but merely a “gesture” on the part of the shops to attract customers. Most large-scale operations (like Metro, Ikea, etc.) nowadays choose this method.
  3. If the intent of the consumer was compromised, either through error in intent, error in price, error in product, deception, or duress, then the consumer may annul the agreement within one year of becoming aware of the error or deception, or of the date that the state of duress is lifted. Each of these concepts has a very broad application, and it is very difficult to assess whether these options could be applicable to any given situation without an evaluation of the case. Realistically, among these possible claims, the one that is more often brought against courts of law is deception, i.e. if the consumer has a reasonably claim that the product lacked an attribute which was warranted or advertised by the seller, or that he/she was tricked into buying it. Most case law in consumer law pertains to such cases of deception. Also it should be noted that any claim with a value of 2,500 TL or more has to be evidenced by written documents; but error, deception, duress, and lesion (described below) are exempt from this requirement, and therefore can be proven by witnesses.
  4. A claim of lesion may be brought against the seller if the product price is overpriced beyond reasonable judgment. The discrepancy between the value of the product and the price paid by the consumer should be objectively excessive and obvious. There is also a subjective element to lesion, which is the comparative inexperience of one party with respect to the other. This subjective criterion is met by definition in consumer transactions, since the consumer is deemed by default to be inexperienced. The right to assert a lesion claim is subject to a one-year time lapse beginning at the date that the contract was executed, and not the date that the consumer became informed of the lesion.
  5. In theory, a claim of simulation (Scheingeschaeft) may also be brought, but this is almost unheard of between the parties of consumer transactions. A simulation claim may only be proven with a written document and the onus is on the claimant.
  6. There may be other reasons which would justify annulment, subject to the circumstances of a case. For example, if the seller publicly makes best price claims and warrants that his/her products are being sold at the lowest price on the market, and if the consumer can prove that at the time of the transaction he/she has made with such seller another seller was offering a better price, then the first agreement may be annulled per the overarching honesty and good-will rules under Articles 2 and 3 of the Turkish Civil Code.

B.        Door-to-Door Sales

  1. In addition to all the possibilities explained under Header A for face-to-face transactions, if a consumer transaction is conducted at the residence or workplace of a consumer, then the consumer has the right to unilaterally and unconditionally annul the agreement within 7 days once the product is purchased, regardless whether the product is defective or not. (TKHK, Art. 9).
  2. The seller, prior to closing an agreement, should give the consumer a copy of the sale agreement which details the identity and contact details of the seller, date of agreement, date of delivery, the nature of the product, its price including all taxes, and details on the consumer’s right to annul the contract. The Agreement clause pertaining to the consumer’s right to annul should be printed in bold typeface and be in at least 16 pt font size. If the consumer has not confirmed in writing that he/she is in receipt of the copy of the sales agreement, then the consumer has the right to annul the agreement at any time.

C.        Distance Sales

The term “distance sales” is used in Turkish law to denote any sales conducted over a physical distance, e.g. mail order, catalog, phone, facsimile, radio, T.V., e-mail, online sales. Distance sales are subject to even more strict requirements for the seller.

  1. In addition to all the possibilities explained under Header A for face-to-face transactions, if a consumer transaction is conducted as a distance sale, then the consumer has the right to unilaterally and unconditionally annul the agreement within 7 days once the product is delivered, regardless whether the product is defective or not. (TKHK, Art. 9/A). The seller is then obliged to return the price of the product to the consumer within 10 days of the date his/her receipt of the notice of annulment. Any decrease in the value of the product, or an impossibility to return the product to the seller for whatever reason may not preclude the consumer’s right to annul, and in such cases the seller is obliged to return the product price to the consumer. The consumer, upon exercising his/her right to annul, may either return the product to the seller or leave it up to the seller to collect them by courier or other means.  Even if the delivery of the product has been made by a person other than the seller, a consumer still may exercise the right to annul, in which case the seller is obliged to retrieve the product from the third party delivery firm.

The right to annul may not be exercised in the following cases of product sales:

  1. If the price of the product is determined by a stock exchange or similar market organizations
  2. If the product is not suitable for returning due its nature, (e.g. if its expiry date is very short)
  3. If the product is a sound or image recorder, a computer software, or computer consumable, and the consumer has opened the packaging.
  4. If the product is non-material (e.g. software) and delivered online instantly upon payment of the consumer.
  • The seller, prior to closing an agreement, should send the consumer a preliminary information form which details the identity and contact details of the seller, the nature of the product, its price including all taxes, shipping costs if applicable, details on payment and performance, details on the consumer’s right to annul the contract, and the validity period for the offered price. This information form should be delivered to the consumer before the product is delivered, or if the contract is made over the phone, the latest simultaneously with the delivery of the product. If the consumer has not confirmed in writing that he/she is in receipt of the information form, then the consumer has the right to annul the subsequent sales agreement at any time.

[1] A defective product is defined by the law as: “a product which contains, material, legal or economic deficiencies which influence the quality, or the quantity that affects the quality, specified on the packaging, labelling, presentation or operating instructions, or in the advertisements or notices, or declared by the seller or established in the standards or technical regulations, or decrease or eliminate its value or the benefits expected from such product by the consumer with respect to fitness, shall be deemed defective.” (TKHK, Art. 4)

[2] Annuling (iptal) in Turkish law corresponds only to one concept, which is the act of declaring an otherwise enforcable contract void and removing its terms and consequences retroactively from the beginning of the contract (the same as Anfechtung in German law, as opposed to Ungültigkeit, which is not applicable in Turkish law). Annuling can be done by a party to the agreement or court, and has to be based on a right afforded by law,  regulation, etc.