Background
Under a supply agreement dated March 1, 2015, the defendant supplied industrial cleaning products and related services to the claimant and provided six floor-cleaning machines without a separate charge. The claimant agreed to make regular purchases, while the agreement imposed a penalty equal to the machines’ value if the claimant failed to perform its obligations fully and on time or unilaterally terminated the contract.
The agreement specified that it would expire on March 1, 2019, and contained no renewal provision. Shortly before expiration, the claimant notified the defendant that the contractual relationship would end and that the machines would be returned. The defendant nevertheless asserted that the claimant had failed to purchase the quantities and particular products listed in the agreement, initiated non-judgment enforcement proceedings for €48,000 plus accrued interest, and collected TRY 405,000 after the claimant failed to object in time.
The claimant filed a restitution action within the one-year period under Article 72 of the Enforcement and Bankruptcy Law. The Bakırköy 1st Commercial Court accepted the claim and ordered the defendant to repay TRY 405,000 with commercial advance interest from the filing date. The defendant appealed.
The Court’s Holding
The Istanbul Regional Court of Appeal rejected the defendant’s appeal on the merits under Article 353(1)(b)(1) of the Code of Civil Procedure. It held that the claimant had performed the supply agreement and that the contractual penalty never became due. The financial evidence showed purchases totaling TRY 7,238,566.51, far exceeding both the annual minimum of TRY 113,879.45 and the approximately TRY 569,397.25 required over the contractual period.
The court construed the agreement’s commercial purpose as guaranteeing purchases of a minimum value in exchange for use of the machines, not requiring the claimant to buy every listed product in precisely the stated quantities. Because the agreement did not expressly require item-for-item purchases, the defendant could not rely on shortfalls in a few listed products after accepting substantially greater overall sales throughout the relationship. The court considered that position inconsistent with the duty of good faith.
The court also held that the fixed-term agreement expired automatically on March 1, 2019, because it contained no extension clause. The claimant’s February 13, 2019 notice properly communicated that the relationship would end at the close of the term and did not constitute a wrongful unilateral termination. The order requiring repayment of TRY 405,000 with advance interest therefore remained in place.
Key Takeaways
- A contractual penalty tied to nonperformance cannot be collected when the evidence shows that the obligated party satisfied the agreement’s minimum-purchase requirement.
- A product schedule will not necessarily require exact item-by-item purchases where the contract’s language and commercial purpose establish an aggregate purchasing commitment.
- A party may violate the good-faith principle by accepting purchases far above the agreed minimum and later invoking shortages in a few scheduled items to demand a penalty.
- Giving notice that a fixed-term contract will end upon its stated expiration is not wrongful unilateral termination when the contract contains no renewal provision.
Why It Matters
The decision emphasizes substance over a selectively literal reading of supply schedules. Businesses seeking to enforce product-specific purchasing commitments should state those obligations expressly rather than relying on an aggregate minimum-purchase clause.
It also confirms that payment made through finalized non-judgment enforcement proceedings does not establish the underlying debt. A debtor that missed the objection deadline may still recover an amount not legally owed by filing a timely restitution action.