Background
A company later dissolved and transferred to the Treasury under Emergency Decree No. 670 entered into a 2015 advertising-services agreement with the defendants. In exchange for advertising services, the defendants undertook to transfer two units in an Istanbul development. The agreement provided for a penalty of TRY 1,000 per month if the transfer was not completed within the contractual period.
The units were registered to the Treasury and physically delivered on August 19, 2020. The plaintiff sought TRY 61,000 for 61 months of alleged delay. The defendants argued, among other things, that the delayed performance had been accepted without reservation, precluding recovery under Article 179(2) of the Turkish Code of Obligations.
The Istanbul Anatolian 1st Commercial Court dismissed the action. It found that the Treasury had accepted both registration and physical delivery without reserving its penalty claim and had also executed a delivery document releasing the seller concerning one unit. The plaintiff appealed.
The Court’s Holding
The 45th Civil Chamber rejected the appeal on the merits and affirmed the dismissal. It characterized the monthly payment as a penalty cumulative with performance under Article 179(2): ordinarily, a creditor may demand both performance and the agreed penalty when an obligation is not performed at the specified time or place.
That right is lost, however, when the creditor accepts delayed performance without reservation, unless the creditor expressly waived the need for a reservation, preserved the claim before performance, or otherwise acted before acceptance in a manner clearly reserving the right. The record contained no reservation made upon acceptance and no prior notice or conduct preserving the penalty claim.
The court therefore held that the plaintiff could not recover the contractual delay penalty. Finding the first-instance judgment lawful in both procedure and substance and identifying no public-order defect, it unanimously dismissed the appeal under Article 353(1)(b)(1) of the Code of Civil Procedure. The decision was final under Article 362(1)(a).
Key Takeaways
- A penalty imposed for failure to perform at an agreed time or place is generally cumulative with performance under Article 179(2) of the Turkish Code of Obligations.
- A creditor ordinarily forfeits a delay-penalty claim by accepting late performance without expressly reserving that claim.
- A reservation may be preserved through a notation in an acceptance record, written notice before acceptance, or other conduct clearly demonstrating that the creditor retains the penalty claim.
Why It Matters
The decision underscores that an otherwise valid contractual delay penalty may become unenforceable through the creditor’s conduct at delivery. A creditor expecting to pursue such a penalty should reserve the right expressly when accepting late performance or make an unequivocal reservation beforehand.
The ruling also confirms that proof of actual loss is generally unnecessary for an agreed penalty. Here, the claim failed not because the plaintiff lacked damages, but because it accepted delayed performance without preserving its rights.