In Turkish contract law, it is essential to distinguish between two legal mechanisms often confused with one another: "sözleşmeden dönme" (withdrawal from the contract) and "sözleşmeyi fesih" (termination of the contract). Though both may lead to the end of a contractual relationship, they stem from different legal grounds and produce distinct legal consequences.
In this blog, Bayraktar Attorneys examines the core differences between these two concepts under the Turkish Code of Obligations (Türk Borçlar Kanunu), including examples, case law interpretations, and practical implications for individuals and businesses.
“Dönme” refers to a retroactive annulment of the contract. When a party exercises the right to withdraw from a contract, it is as if the contract never existed in the first place. All contractual obligations cease, and any performances already rendered must be returned or refunded.
Key Characteristics:
Legal Effect: Retroactive cancellation (ex tunc)
Restitution: Parties must restore what they received
Grounds: Usually arises due to breach of contract, impossibility, or legal right of withdrawal
Common in: Sales contracts, consumer contracts, or cases involving hidden defects
Example:
If a buyer withdraws from a property purchase agreement due to the seller’s failure to deliver the title deed, the contract is considered never to have existed. The buyer can demand the return of the purchase price and interest.
What Is “Sözleşmeyi Fesih” – Termination of the Contract?
“Fesih” refers to the prospective ending of a contract. Unlike withdrawal (dönme), termination does not erase the past; instead, it ends the legal relationship from the moment of termination forward. This means that the obligations already performed remain valid, while future obligations are extinguished.
Key Characteristics:
Legal Effect: Forward-looking cancellation (ex nunc)
Restitution: No obligation to return past performance unless contract or law provides otherwise
Grounds: Can arise from breach, impossibility, or be exercised contractually (e.g., notice in indefinite contracts)
Common in: Employment contracts, lease agreements, service contracts
Example:
In a commercial lease agreement, if one party terminates the contract due to non-payment of rent, the lease ends from the date of termination. Rent already paid is not refunded, but no new rent becomes due from that point onward.
Key Distinctions Between Withdrawal (Sözleşmeden Dönme) and Termination (Sözleşmeyi Fesih) Under Turkish Law
The most fundamental difference between withdrawal and termination lies in their legal effect. Withdrawal (sözleşmeden dönme) has retroactive consequences—meaning it erases the contract as if it never existed. In such cases, each party must return whatever they received under the contract. This is typically seen in sales or consumer contracts, particularly when one party fails to fulfill their obligations or a hidden defect is discovered.
Termination (sözleşmeyi fesih), on the other hand, ends the contract prospectively. It does not undo past performances; instead, it prevents future obligations from arising. This type of cancellation is more common in long-term or recurring agreements such as employment, rental, or service contracts. For example, if a lease is terminated due to unpaid rent, the tenant is not refunded past payments but is no longer liable for rent going forward.
Another distinction is the legal basis: withdrawal is primarily governed by Turkish Code of Obligations (TBK) Articles 108, 123, and 125, whereas termination is addressed under TBK Articles 437, 438, and 432.
Case Law and Practical Implications in Turkish Courts
Turkish courts carefully distinguish between termination and withdrawal due to the different legal consequences each creates. The distinction affects how damages are calculated, whether restitution is required, and whether interest or compensation claims can arise.
For instance, in withdrawal (dönme) cases—especially in defective goods or real estate sales—the courts may order both mutual restitution and compensation for damages suffered due to the breach. If the buyer has paid the full amount but never received the promised goods or services, the court may order a refund plus default interest, treating the contract as if it had never existed.
In contrast, when a party terminates a contract (fesih), the courts evaluate whether that termination was based on just cause or notice rights, particularly in long-term obligations. If the termination is lawful, no further obligations accrue. However, if the termination is unjustified, the terminating party may be liable for damages caused to the other side for prematurely ending the contract.
Example from Yargıtay Case Law:
In one Court of Cassation (Yargıtay) decision involving a service contract, the court emphasized that withdrawal requires a breach so severe that it defeats the purpose of the contract entirely. Otherwise, the appropriate legal action is termination, not withdrawal. Similarly, in lease disputes, Yargıtay has held that unless there is a legal basis for retroactive cancellation (such as fraud or impossibility), parties should pursue termination with notice rather than withdrawal.
These distinctions are not just technicalities—they determine who owes what to whom, whether compensation or restitution is due, and what legal strategy should be followed in case of breach.
Conclusion: Choosing the Right Legal Path
Understanding the difference between termination (fesih) and withdrawal (dönme) is critical when managing a contractual dispute under Turkish law. While both are tools to end a legal relationship, they operate under different legal assumptions and lead to different outcomes.
Withdrawal nullifies the contract retroactively, while termination stops obligations from continuing into the future. Misapplying one instead of the other can result in lost compensation rights or procedural errors before court.
Whether you are a business terminating a long-term supply agreement or a consumer seeking to withdraw from a defective property sale, your legal strategy must reflect the correct legal mechanism. Legal representation is highly recommended to analyze your contract, assess the breach or dispute, and determine whether withdrawal or termination is appropriate under the Turkish Code of Obligations.
