NEWSLETTER-2020-metin

115 LAW OF OBLIGATIONS parties, then that provision shall be applied primarily in accordance with the principle of freedom of contract. In the lease agreements within this framework, the provisions stipulated in the contract, and the opportunities provided by the parties, shall be primarily applied, in the event that there is a clause regarding force majeure and “pan- demic” is among the cases considered to be force majeure. In the event that the pandemic and measures taken do not con- stitute force majeure, the contract may be adapted in accordance with “Hardship provision” under Article 138 of the TCO. Article 138 is a general provision regulates the adaptation of contracts and more im- portantly, it concerns lease contracts. The “Hardship” Clause has an importance for the adaptation of lease agreements in foreign currency, and it is applied to lease agreements in Turkish currency, as well. Lease Contracts and the Conditions of Hardship For a contract to be adapted by the judge, the following condi- tions must be satisfied under Article 138 of the TCO : • An extraordinary and unpredictable change in the conditions of the contract takes place; • The change is not caused by the debtor; • The change affects the facts existing at the time of conclu- sion of the contract against the debtor in such a way that contradicts with good faith; and • The debtor does not perform, or performs the contract, by reserving its rights arising from the excessive change of ba- lance between the parties. The Court suggests that the basis of the adaptation regarding “Hardship,” which is different from the concept of impossibility, is “Good Faith” under Article 2 of the Turkish Civil Code. However, the four conditions set out under Article 138 of the TCO must be satisfied in order to adapt the contract to the changing conditions, or to revoke the contract. If all of the conditions for the adaptation are met, the judge adapts the contract to the new conditions upon the request by the debtor. Below, the conditions under which Hardship, as described