THE DUTY TO INSPECT THE WORK AND TO NOTIFY DEFECTS IN THE CONTRACT FOR WORK, ITS LEGAL EFFECTS AND CONSEQUENCES

PART ONE

§ 1 THE CONTRACT AND THE CONTRACT FOR WORK AS CONCEPTS

I. CONTRACT

The dictionary meaning of the word “sözleşme” (contract) is “binding”, “knotting”.¹ A contract is a narrower concept than a legal transaction. A legal transaction encompasses unilateral, bilateral and multilateral transactions. As can be seen, the contract, which legally requires two mutually corresponding declarations of intent, is a concept falling within the legal transaction. The great majority of contracts, which occupy a very important place in our lives, are regulated in the second part of our Code of Obligations (md.207-449). However, some contracts that we encounter in life have not yet been regulated by law. It should be noted that the rules on contracts are found not only in the Code of Obligations but also in other laws.²

II. CONTRACT FOR WORK

A contract for work is a contract whereby the contractor undertakes to produce a work and the employer undertakes to pay a price in return (TBK. m.470) . Example: a painter painting a picture, a mason building a wall.

IV. CONTRACT PRICE

It is the payment undertaken by the employer in return for the contractor's producing a work (TBK. m. 470). By virtue of freedom of contract, it may be a payment in cash or a payment in kind.

V.DEFECT

A defect is the absence, in a manufactured work or goods, of qualities that ought to be present, or the presence of qualities that ought not to be present, according to the contract and its annexes, the purpose expected by the employer and the rules of honesty (dürüstlük kuralları).³ In determining whether a defect is open or hidden, the knowledge of an average (ordinary) consumer must be taken into account.⁴

A. OPEN DEFECT

Defects that are visible at first sight when an average person examines the work as soon as possible in the ordinary course of business after its delivery are open defects. (TBK.m.474).

B. HIDDEN DEFECT

Defects that cannot be seen at first sight when an average person examines the work as soon as possible in the ordinary course of business after its delivery are hidden defects(TBK.m.474).

C. MATERIAL AND LESS MATERIAL DEFECTS

A material defect exists where the work is defective to such a degree that the employer cannot use it, or where, according to the rules of equity, the employer cannot be expected to accept the work, or where the work does not possess the qualities expressly agreed in the contract. If the defect in the work is not of a nature requiring the rejection of the work, that defect is a less material defect.⁵

§ 2 THE PARTIES TO THE CONTRACT

The parties to a contract for work are the employer and the contractor. The employer is the person who asks the contractor to produce a work in return for a price that he will pay. The employer may be a natural person or a legal person. Among legal persons, both private-law and public-law legal persons may be parties to the contract as employer. If the main contractor has given the performance of the work under the contract to a subcontractor, the main contractor may in that case also bear the capacity of employer.⁶

§ 3 DIFFERENCES BETWEEN THE CONTRACT FOR WORK AND CERTAIN SIMILAR CONTRACTS

I. Difference from the service (employment) contract

The contract of istisna (the contract for work) aims at bringing about a predetermined result of labour forming a whole, and the emergence of this result signifies that the contractor has not performed his obligation. In a service contract, by contrast, service performances must be rendered within a definite or indefinite period of time; where the worker has exercised the necessary care in his work, the failure of the desired result to materialise does not necessarily mean that he has not performed his obligation.⁷ Example: if the task given to the worker is to repair a broken-down vehicle, what is expected of the worker is to engage in the activity of repairing the broken-down vehicle while exercising the necessary care. It is not the repair of the vehicle. If the vehicle could not be repaired even though the necessary care was exercised, this does not mean that the worker has not performed his obligation. However, if the worker has undertaken the obligation to repair and deliver a vehicle, since a contract for work is at issue here, the failure to repair the vehicle means that the worker has not performed his obligation.

Whereas the worker is in a position of subordination to the employer (işveren), the contractor is in a more independent position vis-à-vis the employer ordering the work. If, in the choice of the tools of work and in the organisation of the work, action is taken according to the instructions of the employer, and the employer also directs and manages the work owing to his knowledge of that work, the existence of a service contract must be held.⁸ It is emphasised in Article 8 of the Labour Law that the element of subordination is a fundamental distinction between the service contract and the contract for work.

II. Difference from the contract of mandate

In a mandate, although the agent carries out a task on behalf of the principal, it is not necessary for him to create a result at the end of this task, but owing to the nature of the task he may also create a result. In general, the fact that the contractor, as the party performing the work, is responsible for the result distinguishes the contract for work from mandate. Whereas a contract for work must be for remuneration, a contract of mandate may be either remunerated or gratuitous.⁹

Whereas in a mandate the agent is obliged to perform the task himself (personally), in a contract for work the contractor may, unless otherwise agreed, have the work done by another person.¹⁰ Although opinions have been expressed along these lines, in our view such an assumption is not a difference distinguishing the contract for work from the contract of mandate. Within the content of a contract of mandate, the person appointed as agent may also be given the authority to appoint another person as agent. For example: the granting, by the person who appointed a lawyer as agent, of authority of representation to another lawyer. Again, the agent may exceed his authority and have the task performed by another person. In this case, where the agent has the task performed by another person, he is liable for that person's acts as if he had performed them himself (TBK.m.507/1)

The most fundamental feature of the contract of mandate is that the principle of trust operates in a very intensive manner. Since a result to be achieved is aimed at in a contract for work, the element of trust has no importance here. In a contract for work, whether or not the contractor trusts the employer, and likewise whether or not the employer trusts the contractor, does not affect the nature of the contract.

In a contract of mandate, the agent becomes entitled to remuneration if this is provided for by the contract or by custom (TBK. m. 502/3). In a contract for work, on the other hand, an obligation has been imposed on the employer to pay the contractor a price, in return for the work he has produced, at the moment of delivery of the work (TBK.m.479)

III. Difference from the contract of sale

A contract of sale is a contract whereby the seller undertakes to transfer possession and ownership of the thing sold to the buyer, and the buyer undertakes to pay a price in return (TBK.m.207) There is no element of labour in these contracts. The seller transfers an already existing possession and ownership. In a contract for work, by contrast, the contractor delivers to the employer, by expending labour, something that does not yet exist. Example: where the employer requests marble from a person, the mere delivery of the marble shows that there is a contract of sale. However, if that person also carries out the installation of the marble in the building, the existence of a contract for work must then be accepted.

In a contract for work the employer gives instructions to the contractor; whereas in a contract of sale the buyer has no authority to give instructions to the seller.¹¹

IV. Difference from the publishing contract

A publishing contract is a contract whereby the author of an intellectual and artistic work, or his successor, undertakes to leave that work to the publisher for publication, and the publisher undertakes to reproduce and publish it (TBK. m.487)

A work whose preparation and printing is commissioned may form the subject matter of a publishing contract or of a contract for work. If the person preparing and printing the work also has an obligation to distribute it, one may speak of the existence of a publishing contract; otherwise, of a contract for work. In a contract for work the risk and benefit of the published work belong to the person who commissioned it, whereas in a publishing contract they belong to the publisher.¹²

PART TWO

§ 4 THE EMPLOYER'S DUTY TO INSPECT THE WORK AND TO NOTIFY DEFECTS

I.In general

After delivery of the work, the employer must examine the work as soon as possible in the ordinary course of business and, if there are defects, notify the contractor of them within a reasonable period (TBK. m.474/1). After the express or tacit acceptance of the work, the contractor is released from all liability; however, his liability continues for defects intentionally concealed by him and which could not be noticed during a proper examination (TBK.m.477/1) If the employer neglects to examine and to notify, he is deemed to have accepted the work (TBK.m.477/2). If the defect in the work comes to light later, the employer must notify the contractor of the situation without delay; if he does not, he is deemed to have accepted the work (TBK.m.477/3). In this case, the possibility for the employer to exercise his rights under m. 475 of the TBK does not arise.

Despite all this, the employer's obligation to inspect the work and to notify the defects is, rather than being an obligation of a primary nature, a condition laid down by the law for the arising of the contractor's obligation of warranty (tekeffül). On the other hand, attempts to resort to incomplete work in order to escape the duty of inspection and notification are sometimes observed. In short, there can be no question of warranty against defects with respect to a work that has not been completed and delivered.¹³ The Court of Cassation (Yargıtay)¹⁴ has also emphasised that in situations where a contract for work is at issue the provisions of the TBK must be applied, and that incomplete work and defective work are entirely separate concepts. In the doctrine¹⁵ some authors do not share the view of the Court of Cassation, and it is stated that, since this is expressly provided in TKHK .m.3/1, the Consumer Protection Law may now also be applied to contracts for work. In our view, the fact that provisions on contracts for work have also been made in the Consumer Protection Law cannot eliminate the applicability of the TBK. For detailed provisions on contracts for work have been made in the TBK.

A.Duty to inspect the work

The duty to inspect the work must be assessed in terms of the authority to inspect, the inspection period, and the scope and method of inspection.

1.Authority to inspect

The inspection of the work is carried out by the employer (TBK.m.474). The employer may inspect the work personally, or may have it carried out by a workplace representative or by other persons whom he assigns.

2. Inspection period

Pursuant to TBK.m.474//I, “After delivery of the work, the employer must examine the work as soon as possible in the ordinary course of business.” As can be seen, the legislator has not stated in definite terms in TBK.m.474/I when the examination of the work is to begin and how long it is to last. The legislator has merely stated that the employer shall begin examining the work as soon as possible in the ordinary course of business. From this wording, in each case the examination period, its beginning and its end are to be determined on the basis of the usages of business life, local customs, the relations between the parties, and the nature, kind and type of the work.¹⁶

3. Scope and method of inspection

The defect must be concrete and specific, not in the form of an abstract allegation. For the judge will take into account ex officio, of his own motion, whether the conditions for the contractor's liability on account of the defect have been fulfilled. Each of the parties may, bearing the cost thereof, request that the work be examined by an expert.¹⁷

However, the granting of a short period for inspection by the legislator is a shortcoming. Expecting the employer to inspect the work and to identify the defect before the work has been delivered gives rise to difficulties. For the work has not yet been delivered to the employer by the contractor. The employer is faced with the burden of inspecting a work that is not in his hands.

B.Duty to notify defects

Again, as with the scope and method of inspection, in the notification of defects too, the concurrent fulfilment of the conditions relating to the notification period, the scope and method of notification, the form of notification and the proof of notification is important for the validity of the notification.

1. Notification period

As to the employer's notification period, if there are defects he has learned of, he must notify the contractor of those defects within a reasonable period ( TBK.m.474)

The defects referred to here are defects visible to the eye. The employer must notify the contractor of the defects he has identified, or of the defects identified by experts, not immediately but within a reasonable period. ¹⁸ Whether the defects came to light at the end of the inspection or were learned of later is not important in this respect.¹⁹

2. Scope and method of notification

The defect must be concrete and specific, not in the form of an abstract allegation.²⁰Accordingly, the contractor must clearly know and understand, from the notification of defects sent to him by the employer, what defects the work contains and on which points the employer holds him liable. If the work contains more than one defect, the employer must provide sufficient information and explanation about each defect.²¹

The notification of defects consists of two elements. The first element is the notification to the contractor that the work is defective. The notification here is a communication of an opinion, of information. The second element is the declaration of intent to the effect that the work is defective, does not conform to the contract, and that the contractor is therefore liable. The true essence of the notification of defects is this element, which by its nature consists of a declaration of intent.²²

3.Form of notification

This notification, which has the character of a formative right, is not subject to any form. However, for ease of proof, it is advisable that it be made in writing or through a notary.²³

4.Proof of notification

The fact that the notification of defects was made, however, being a “material fact”, may be proved by any kind of evidence, including witnesses.²⁴ Such as the parties' commercial books, expert examination, oath, correspondence.

5. Legal nature of notification

According to TBK.m. 474/I, the employer must notify the defect to the employer. By its legal nature, notification of the defect is a burden (külfet). Accordingly, if the employer does not notify the contractor of the defect he identified at the end of the examination, he is deemed to have accepted the work and loses his rights arising from the defect.²⁵ The judge will take into account ex officio, of his own motion, whether the conditions for the contractor's liability on account of the defect have been fulfilled.²⁶

PART THREE

§ 5 LEGAL EFFECTS AND CONSEQUENCES OF THE PERFORMANCE OF THE DUTY TO INSPECT THE WORK AND TO NOTIFY DEFECTS

In cases where the contractor is liable on account of a defect in the work, the employer may exercise one of the following optional rights (TBK.m.475/I). If the employer does not fully perform the duty to inspect the work and to notify defects, he cannot exercise his optional rights and will have accepted the work in its existing condition.

I. Right to withdraw from the contract

If the work is defective to such an extent that the employer cannot use it or cannot in equity be compelled to accept it, or deviates from the terms of the contract to the same extent, he may withdraw from the contract (TBK.m.475/II). If the work has been built on the employer's immovable property and its dismantling and removal would cause excessive damage, the employer cannot exercise the right to withdraw from the contract (TBK.m.475/III)

A.Legal nature of the right to withdraw from the contract and the consequences of its exercise

The right to refuse acceptance of the work is the counterpart of rescission on account of the warranty against defects in sale. It is a formative right exercised by a unilateral declaration of intent requiring receipt, which extinguishes the contract retroactively (ex tunc); it has the character of withdrawal from the contract (Rücktritt) in the full sense.²⁷

When the contract is extinguished retroactively by withdrawal, on the one hand the parties' claims relating to the performances they mutually undertook come to an end, and on the other hand, if they have already rendered performance, obligations of restitution arise. If the contractor has received his remuneration, he must return it with interest, and the employer must return the work together with the benefits he has derived from it.²⁸

B.Special condition for the exercise of the right to withdraw from the contract:

1.The condition that acceptance cannot generally be expected of the employer

It is expressly stated in TBK.m.475/II that the employer may withdraw from the contract if the work is defective to such an extent that the employer cannot use it or cannot in equity be compelled to accept it, or deviates from the terms of the contract to the same extent.

Whether the employer is faced with a work so defective that he cannot be compelled to accept it according to the rule of equity (billgerweise) (that acceptance cannot be expected of him) is determined by weighing the mutual interests of the parties in accordance with equity, taking into account the circumstances of the concrete case. In carrying out this weighing, it must be examined whether, having regard to all the material circumstances of the case as regards the type and extent of the defect, the extinction of the contract is justified. Among the material circumstances of the case, not only those relating to the defect itself but also all other circumstances that would positively or negatively affect the unreasonableness of acceptance must be taken into account. Gross fault on the part of the contractor in respect of the defect will play a role in favour of not compelling acceptance, whereas a limited degree of fault on the part of the employer himself will play a role in the opposite direction. The fact that a price reduction or a delayed repair would be of no use to the employer indicates the unreasonableness of acceptance; the fact that the defect is easily remediable indicates the unreasonableness of acceptance; the fact that the defect is easily remediable, or unnecessary delay by the employer in exercising the right of withdrawal, indicates that acceptance may be expected. If the defect renders the work entirely worthless, the right of reduction cannot be exercised; only withdrawal from the contract is possible.²⁹

2.Unreasonableness of acceptance where the work is built on the employer's land

An exceptional rule has been introduced by the provision that, if the work has been built on the employer's immovable property and its dismantling and removal would cause excessive damage, the employer cannot exercise the right to withdraw from the contract (TBK.m.475/III).

The noteworthy point in this provision is that, where a work built on the employer's land is concerned, he may exercise not the right of withdrawal but the right of termination (TBK.m.475)³⁰

3.Grounds for extinction specific to the right to withdraw from the contract

In the doctrine,³¹ emphasis has been placed on the point that TBK.m.228 must be applied by analogy.

The destruction of, or serious damage to, the thing sold that was transferred to the buyer in a defective condition, owing to the defect, to an unforeseen event or to force majeure, does not prevent the buyer from exercising the right to withdraw from the contract. In this case, the buyer is obliged to return whatever remains in his hands of the thing sold (TBK.m.228)

II. Right to request a reduction of the price

A.Concept and conditions

The right to request a reduction of the price arises in the case of defects that are not serious. Accordingly, the employer's right to request a price reduction from the contractor is subject to the condition that the work is not seriously defective or seriously defective in relation to the contract. If the defect is serious, the employer has the right to withdraw from the contract. What is meant by the non-serious defect, which constitutes the first condition of price reduction, is a minor defect. The second condition for requesting a price reduction is the condition that the defect reduces the value of the work.³²

B.Calculation of the amount to be reduced

The employer may request a reduction of the price in proportion to the loss of value in the work caused by the defect. The loss of value, in turn, corresponds to the difference between the work delivered in a defective condition and the work as it should be, free of defects.³³ The reduced value is determined not according to the subjective values in the minds of the employer or the contractor, but according to an objective measure of value such as the market sale value. If the work has no value at all, that is, if the work presents no value whatsoever, the employer exercises the right of withdrawal instead of reduction.³⁴If the defective work objectively has no value at all, it is accepted, by analogy with the provisions on the contract of sale, that the employer may only exercise the right to withdraw from the contract.³⁵

In calculating the reduction to be made from the price, the relative method used in the contract of sale is applied.³⁶

C.Legal effects and consequences

By its legal nature, the right to price reduction is a formative right. Since a reduction will be made in the existing amount of the price, this right is a modifying formative right.³⁷

III. Right to request remedy of the defect in the work

A.Concept and conditions

Article 475/I,b.3 of the Turkish Code of Obligations provides that, provided it does not entail excessive cost, the repair of the work may also be requested at the contractor's expense. The requirement in this provision that the repair must not entail excessive cost signifies that the work is defective to a degree that does not allow the right to withdraw from the contract to be exercised.³⁸

B.Legal effects and consequences

Like the rights to withdraw from the contract and to request a price reduction, the right to request repair is by its nature a modifying formative right. The employer exercises the right of repair by a unilateral declaration of intent requiring receipt. The right of repair arises between the employer and the contractor at the moment the declaration of intent reaches the contractor's sphere of control. Once exercised, this right can neither be revoked nor exercised subject to a condition.³⁹

In order for the employer to be able to request the contractor to remedy the defect, the defect in the work must be objectively remediable and the repair must not entail excessive cost.⁴⁰

Where the right of repair has been chosen, if the contractor refuses to carry it out or is unable to do so, the employer may entrust its execution to a third person at the contractor's expense. In that case, the employer may claim the resulting expenses as compensation.⁴¹

IV. Right to claim compensation

A.In general

In cases where the contractor is liable on account of a defect in the work, the employer may exercise one of the optional rights, namely to withdraw from the contract, to retain the work and request a reduction of the price in proportion to the defect, or, provided it does not entail excessive cost, to request the repair of the work free of charge with all expenses borne by the contractor (TBK.m.475/I)

However, the employer's right to claim compensation under the general provisions is reserved. This right is one that may be exercised independently of the aforementioned rights. Its being subject to the general provisions is also, in a sense, proof of its independence. In our opinion, the scope of this right is the losses falling outside the scope of the optional rights.⁴²

B.Conditions of compensation

1.The work must be defective

The first condition for being able to claim compensation is that the work is defective. In order to avoid repetition, we confine ourselves to referring to our explanations.

2.The employer must have suffered damage

According to TBK.m.475/II, only compensation for the damage arising from the defectiveness of the work may be claimed here.⁴³

3.There must be an adequate causal link between the defect and the damage

There must be an adequate causal link between the damage suffered by the employer and the defectiveness of the work. In the absence of a causal link, the contractor's liability will not arise.

4.The contractor must be at fault

For the contractor to be liable for the damage caused by the defect, he must be at fault. Since contractual damage is at issue here, there is a presumption of fault against the contractor. The contractor's release from liability depends on his proving that he is not at fault. Fault may take the form of intent or the form of negligence. Negligence, whether slight or gross, must be objective in nature. No distinction has been made between direct damage and indirect damage.⁴⁴

§ 6 AGREEMENTS EXCLUDING AND LIMITING LIABILITY FOR DEFECTS

The provisions of the Code of Obligations on warranty against defects are in the nature of default rules of law. Accordingly, the parties to a contract of sale may, in accordance with the principle of freedom of contract and within the limits drawn by the law (BK.m.196 and 99-100), limit or exclude by contract the liability arising from the warranty against defects. Although it is not very frequently encountered in practice, it is also not possible to aggravate it.⁴⁵

Clauses concerning the limitation of liability become binding through the mutual and corresponding declarations of intent of the parties.⁴⁶

According to BK.m.196, clauses limiting or excluding liability arising from the warranty against defects are not valid if the seller has fraudulently concealed the defect. The purpose of this provision is to prevent the seller, contrary to his duty of loyalty, from creating a false impression in the buyer's mind as to the qualities of the thing sold and, by taking advantage of the buyer's misconception, inducing him to consent to a non-liability clause. Where the defect is concealed, the non-liability clause is null and void; the other parts of the contract of sale are not affected by this nullity; the partial nullity here occurs without any need to apply BK.m.20//II, that is, independently of it. Otherwise, the purpose of BK.m.196 would not be achieved. For the buyer, thinking that the whole contract would be invalid, might refrain from asserting the invalidity of the non-liability clause.⁴⁷

The limitations concerning non-liability clauses provided for in BK.m.99 and 100/III also apply, together with BK.m.196, in the case of liability under the warranty against defects. For BK.m.196 regulates the limits of an agreement excluding liability arising from the warranty against defects only in respect of the fraudulent concealment of the defect. In the other cases, the provisions of BK.m.99/II and m.100/III may be applied if their conditions are fulfilled. In these provisions the legislator sought to prevent the weakening of the fault principle. On the other hand, the concept of liability in BK.m.99 and 100 also includes liability arising from the breach of obligations arising from contract. The obligation of warranty against defects, in turn, is an obligation arising from a specially regulated case of improper performance.⁴⁸

§ 7 EXTINCTION OF THE RIGHTS ARISING FROM THE WARRANTY AGAINST DEFECTS

I.Attributability of the defectiveness of the work to the employer

If the defectiveness of the work has resulted from instructions given by the employer despite the contractor's express warning, or can be attributed to the employer for any other reason, the employer cannot exercise his rights arising from the defectiveness of the work (TBK.m.476)

A.Defectiveness of the work arising from the employer's instructions

While the contractor produces the work, the employer generally also has an active role. Proceeding from this fact, the Legislator has laid down in Article 476 of the TBK, as a condition for holding the contractor liable, that the defect in the work cannot be attributed to the employer. In other words, if the defect in the work stems from a cause attributable to the employer, the contractor cannot be held liable.

B.Defectiveness of the work arising in particular from the employer's instructions, the materials he supplied or a defect of the land

The employer may play a role in various ways in connection with the production of the work. Although there is no relationship of subordination between them such as exists in a service contract, the employer may give orders and instructions to the contractor. Tools, equipment, materials, plans and projects relating to the work to be produced may also be delivered to the contractor by the employer. In such cases, where the defect in the work stems from the employer, the contractor as a rule cannot be held liable under the provisions on defects. However, in order for the contractor to be held liable, it must be notified by the contractor to the employer that the items delivered are not suitable for the nature of the work and are not fit for achieving the expected result. As an expert, the contractor must warn the employer on this matter and inform him.⁴⁹

C.Certain other cases in which the defect is accepted as attributable to the employer

Sometimes, although the employer supplies the materials himself, he gives binding instructions to the contractor regarding the type of material the contractor is to bring or from whom it is to be purchased. If, despite the contractor warning the employer of the unsuitability of this material or of the poor quality of the goods of the recommended seller or manufacturer, the employer insists on his instructions, the contractor is released from the warranty relating to defects arising from this material; indeed, if the employer is more experienced and knowledgeable in this matter, the contractor no longer bears liability for defects in the material that do not come to light upon normal examination, without any need for the contractor to give a warning.⁵⁰

II. Acceptance of the work by the employer

The employer's having accepted the work is important in terms of liability. If the employer accepts the work, the contractor is released from all liability. Of course, with regard to release from liability here, different assessments must be made depending on whether the defect is an open defect or a hidden defect (TBK.m.477). However, whether the defect is open or hidden, if the employer does not immediately notify the contractor of the defect, he cannot exercise his optional rights arising from the defect. His optional rights lapse.(TBK.m.477/II,III)

The point to be noted here is that incomplete work, aliud (delivery of something other than what was agreed) and defective work must not be confused with one another. These two situations, which differ from defective work, may continue until the end of the limitation period within the framework of the rules on total non-performance of the contract and on conduct in breach of the contract.⁵¹

A.Lapse of the employer's rights by reason of acceptance of the work in the case of open defects

In the case of open defects, the employer must examine the work and, if he identifies a defect in the work, immediately notify the contractor. If the employer neglects to examine and to notify, he is deemed to have accepted the work (TBK.m.477/I,II)

B.Lapse of the employer's rights by reason of acceptance of the work in the case of hidden defects

The contractor's liability continues for defects intentionally concealed by the contractor and which could not be noticed during a proper examination. Again, as in the case of open defects, if the defect in the work comes to light later, the employer must notify the contractor of the situation without delay; if it is not notified, he is deemed to have accepted the work(TBK.m.477/I,III)

§ 8 LIMITATION APPLICABLE TO ACTIONS ARISING FROM DEFECTS

Limitation is regulated in detail between Articles 146 and 161 of the Code of Obligations. By stating in Article 147/6 “claims arising from a contract for work, except where the contractor fails to perform his obligations at all or properly through his gross fault”, the Law has provided that other claims arising from a contract for work and claims arising from certain disputes forming the subject of contention are subject to a five-year limitation period. Despite this provision of a general nature, the Code of Obligations has, in its Article 478, made the following provision in the form of a threefold distinction: “If the contractor has produced a defective work, actions to be brought on that account shall become time-barred, starting from the date of delivery, upon the expiry of two years for works other than immovable structures; of five years for immovable structures; and, if the contractor is guilty of gross fault, of twenty years regardless of the nature of the defective work.⁵²

§ 9 CONCLUSION

The performance of the duty to inspect the work and to notify defects is necessary for the employer to exercise the optional rights conferred upon him by the law. This duty, if not performed in the proper manner, will of course not produce favourable legal effects and consequences for the employer.

Article 2 of the Civil Code regulates the content of legal relationships. These rules are unwritten rules. They are rules formed outside individuals and imposed upon individuals. The judge is obliged to apply the rules of honesty of his own motion. The judge will apply the rules even if there is no request from the parties.⁵³In legal transactions, the principle of honesty comes into play in particular in the formation, interpretation and supplementation of transactions, in their adaptation to new circumstances, and in pre-contractual relations.⁵⁴ Accordingly, the employer must exercise the duty of inspection and notification within the framework of the rules of honesty.

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