Sale of Movable Property

Sale of Movable Property 

The sale of movable property is a fundamental type of contract regulated under the Turkish Code of Obligations, enabling the transfer of ownership of a transferable good to the buyer in exchange for a specified price. This legal transaction aims to establish a mutually obligatory relationship between the parties, ensuring the seller's obligation to deliver the goods and the buyer's obligation to pay the price in full. This contract, frequently used in commercial life, brings with it critical legal consequences such as the transfer of ownership and the transfer of risk.

1. Subject of the Contract for the Sale of Movable Property 

Article 209 of the Turkish Code of Obligations did not limit the sale of movable property solely to physically movable goods, but broadened its scope by establishing a legal framework. This article can be examined on two main levels:

A. Negative Definition of the Concept of Movable Property

The legislator, in defining movable property, has left a broad scope by using the phrase "everything other than that which is considered immovable." Accordingly:

• According to the Turkish Civil Code, all items not registered as immovable property,
• Natural forces (energies that can be stored and transmitted, such as electricity and natural gas),
• Rights that are legally considered movable property (intellectual property rights, shares) are subject to the provisions regarding the sale of movable property.

B. Classification of the Sale of Integral Parts of Immovable Property as Movable Property

The second paragraph of the article addresses practical needs in economic life. Elements that are normally part of immovable property are subject to the provisions of movable property sales when sold for the purpose of separation :

• Natural products: Fruits on the tree or crops in the field.
• Building Debris: The rubble and building materials that will be left behind after a building is demolished.
• Underground Resources: Stones or ores to be extracted from quarries.

Important Note: In this type of sale, the transfer of ownership only occurs when these parts are originally separated from the immovable property (and acquire the status of independent property upon separation).

2. Seller's Obligations and Delivery Regime

In the sale of movable property, the seller's obligations are not limited to physically delivering the goods; they also encompass a transfer of possession aimed at transferring ownership.

A. Transfer of Possession and Transfer of Ownership 

The seller's most fundamental obligation is to transfer ownership of the goods to the buyer. In the case of movable goods, the transfer of ownership generally occurs through the transfer of possession (transfer of possession).

• Purpose of Performance: The transfer must be for the purpose of fulfilling the obligation to transfer ownership, and not a random delivery.
• Types of Possession: This transfer can occur through the direct delivery of the property, delivery to a representative, or the transfer of actual control over the property.

B. Sharing of Costs: Transfer, Transportation and Customs Expenses 

The law provides for a sharing of expenses in line with the principle that "debts are debts that must be sought" unless the parties agree otherwise

• Seller's Responsibility: The seller is responsible for all costs associated with measuring, weighing, and counting the goods necessary to prepare them for delivery .
• Buyer's Responsibility: The buyer is responsible for the costs of taking delivery of the goods and, if transportation is required, the costs of moving the goods to another location .
• Special Conditions: If a "transfer without expenses" agreement has been made, transportation costs will also pass to the seller. In international trade, the clause "without port and customs expenses" means that export and transit taxes will remain with the seller.

3. Seller's Default 

If the seller fails to deliver the goods on time or at all, the provisions of "Debtor's Default" come into play. However, the law has established a special presumption for commercial sales :

A. Special Presumption in Commercial Sales (Definite Term Transactions)

In commercial sales where a specific time limit is set, if the seller defaults, the buyer to have "waived the right to specific performance and demanded damages ." If the buyer still wants delivery of the goods, they must notify the seller immediately upon the expiration of the deadline.

B. Calculation of Damages (Positive Damages)

When the seller fails to fulfill their obligation, the buyer can have their losses calculated in two ways:

• Concrete Method (Substitution Purchase): If the buyer purchases a substitute item from another source in accordance with the principle of good faith, they can claim the difference between the higher price they paid and the original purchase price from the seller.
• Abstract Method (Market Price Difference): If the good is listed on the stock exchange or has a market price, the buyer can claim the difference between the contract price and the market price on the performance date as damages, even if they do not purchase a new good

4. Seller's Liability for Seizure

Liability for seizure arises when a third party takes possession of the goods sold to the buyer due to a right existing at the time the sales contract was concluded (for example, ownership or a lien right belonging to another party).

A. Origin and Conditions of Liability 

For the seller to be held liable, all of the following conditions must be met:

• Third Party's Superior Right: There must be an existing right (ownership, usufruct, etc.) at the time of sale.
• Seizure or Threat of Seizure: All or part of the goods must be taken from the buyer.
• Buyer's Lack of Knowledge: If the buyer was aware of this risk at the time the contract was concluded, the seller is only liable if the buyer specifically undertook to assume this risk.
• Limitations of Exemption Agreements: Agreements exempting a third party from liability are legally invalid if the seller has concealed the third party's rights despite knowing them.

B. Trial Procedure and Obligation to Report 

When a lawsuit is filed against the buyer by a third party, the buyer has an obligation to "notify" the lawsuit

1. Notification of Lawsuit: When the buyer notifies the seller of the lawsuit, the seller must join the lawsuit on the buyer's side or take over the defense.
2. Consequences of Notification: Even if the buyer loses the case after timely notification, the seller remains responsible for the outcome (unless gross negligence is proven).
3. Seizure Without a Court Order: Exceptionally, if the buyer has recognized the rights of a third party in accordance with the rules of good faith, or if the buyer has warned the seller but has not received a satisfactory outcome and has resorted to arbitration, the provisions regarding liability for seizure may apply even without a court order.

5. Consequences of Seizure and the Receiver's Optional Rights

A. Complete Seizure (Confiscation of All Property)

The contract automatically terminates if all the goods have been received. The buyer may request the following:

• Refund of the amount paid, plus interest.
• Expenses that cannot be claimed from a third party.
• Court costs.
• Direct Damages: Compensated regardless of the seller's fault.
• Other Damages (Indirect): If the seller cannot prove faultless, they will also be liable for these damages.

B. Partial Seizure (Taking A Portion of Property)

If part of the goods have been taken, the contract generally remains valid; the buyer only requests compensation for the damage suffered.

• Exception (Termination of Contract): If the buyer would not have entered into the contract if they had known that part of the goods would be taken from them (for example, if the most important part of a set has been seized), they may request the court to terminate the contract.

6. Seller's Liability for Defects

A defect is the lack of qualities in a sold good that are stipulated in the contract or that, according to the principle of good faith, should be present for its intended use.

A. Scope and Conditions of Liability 

The seller any material, legal, and economic defects in the goods.

• Strict Liability: The seller is liable even if they were unaware of the defect.
• Buyer's Information: If the buyer is aware of the defect at the time of the contract or could have discovered it through a normal inspection, the seller is generally not liable (unless the seller has specifically guaranteed that the defect is absent).
• Exemption from Liability Agreement: If the seller is "grossly negligent" (intentionally concealing a defect, etc.), contractual provisions that waive liability are invalid.

B. Buyer's Responsibilities: Review and Notification 

The exercise of rights arising from defects is contingent upon the buyer fulfilling certain obligations:

1. Inspection and Notification: The buyer should inspect the goods as soon as possible and, if they find any defect, report it within a "reasonable period" (generally interpreted more narrowly in commercial sales).
2. Hidden Defect: Defects that cannot be detected through a normal inspection must be reported immediately if they become apparent later. Otherwise, the goods will be deemed accepted in their defective state.
3. Protection in Distance Selling: If goods shipped from another location are defective, the buyer cannot immediately return them; they must first take protective measures and have the situation determined through a court/official authority.

7. Buyer's Optional Rights 

In the event of a defect, the buyer is granted four main rights by law:

• Termination of Contract: Returning the goods and receiving a refund.
• Price Reduction: Requesting a discount on the sale price proportional to the defect.
• Free Repair: Request repairs at the seller's expense.
• Replacement with a Defective and Similar Item: Requesting a new item.

Judicial Intervention: If the buyer has exercised their right of "return" but the circumstances do not justify it (e.g., the defect is minor), the judge may instead order repair or a price reduction.

D. Consequences of Termination of the Contract 

When the right of withdrawal is exercised, the contract is terminated retroactively.

• Compensation for Damages: The seller is liable for direct damages arising from the defect (even if there is no fault on their part) and, if proven, indirect damages
• Loss of Goods: Even if the defective goods are lost due to the defect or force majeure, the buyer may exercise the right of restitution (by returning the remaining parts).

E. Statute of Limitations

Unless the seller has committed to a longer period, claims arising from defects two years . However;

• the seller is grossly at fault, they cannot benefit from this 2-year period.
• For residential or holiday properties, this period is generally 5 years (excluding cases not considered as movable property sales).

8. Buyer's Obligations

A sales contract obligates the seller to deliver the goods, while the buyer is obligated to pay the price for that delivery and to accept the delivered goods.

A. Payment of the Sale Price

The buyer's primary obligation is to pay the agreed purchase price to the seller in the manner stipulated in the contract (cash, installments, bank transfer, etc.).

• Time and Method of Performance: If no specific time is determined in the contract, payment must be made at the time of delivery, in accordance with the principle of simultaneous performance of obligations.
• Unconditional Obligation: The purchase price is a fundamental element of the contract, and failure to fulfill this obligation constitutes default by the buyer.

B. Acquisition of the Sold Property

The buyer is obligated not only to pay the money but also to physically take delivery of the goods that the seller has duly offered .

• Immediate Takeover Rule: According to Article 232, unless there is a local custom to the contrary or a specific agreement between the parties, the goods sold must be taken over by the buyer at the time they are presented.
• Consequences of Non-Taking Over: If the buyer refuses to take over the goods without a justifiable reason (e.g., a defect), it puts them "creditor default ." In this case, the costs of protecting the goods and any damage may pass to the buyer.

9. Determining the Sale Price and Calculation Procedure

The fundamental rule in a sales contract is that the price must be specified. However, in scenarios where the parties do not explicitly agree on the price, the legislator has introduced the criterion of "determinability" to prevent the contract from being deemed invalid.

A. Cases Where the Price Has Not Been Determined

If the buyer has clearly stated their intention to purchase the goods without specifying a price (for example, "Send it whatever the price is, I'll take it"), a contract is considered to be concluded. In this case, the price is determined according to the following criteria:

• Average Market Price: The average prevailing market value at the place and time of performance is taken as the basis.
• Presumption of Determinability: This statement by the buyer creates a legal presumption that they agree to the market price.

B. Sales Based on Weight and "Tare" Calculation

Especially when the price is determined by weight for the sale of bulk goods or packaged products, the following rules apply:

• Net Weight Basis: By law, unless otherwise stipulated, the weight of the container/packaging (tare) is deducted from the gross weight. The buyer only pays for the net weight of the goods.
• Priority of Commercial Customs: The last paragraph of the article refers to established rules of commercial life. If, in certain sectors (e.g., textiles or food wholesaling), there is an established custom to calculate the price based on gross weight or to apply a fixed tare weight deduction, this custom shall be applied instead of the net weight rule in the law.

10. Due Date of Sale and Accrual of Interest

Since a sales contract is a bilateral agreement imposing obligations on both parties, there is an unbreakable link between the seller's performance (transfer of possession) and the buyer's counter-performance (payment of the price). Article 234 of the Turkish Code of Obligations defines the temporal limits of this link and the financial consequences of any delay.

A. Payment Due Date (Maturity Date)

Unless otherwise agreed between the parties (such as an installment sale or a sale on credit), the law specifies when a payment obligation becomes "demandable":

• Payment Due Upon Transfer of Possession: The sale price becomes due from the moment the sold item comes into the buyer's possession.
• Simultaneous Performance Principle: This provision is a reflection of the "goods in hand, money in hand" principle in contract law. The seller acquires the right to demand payment the moment they transfer possession of the goods.

B. Interest Accrual on the Amount (Situations of Interest Without Notice)

Normally, interest can only be charged on a debt if the debtor is put in default (a notice is issued). However, Article 234 protects the creditor by stipulating that interest can be demanded without a notice in three special circumstances:

1. Commercial Custom: If it is an established practice in the sector or region to charge interest on the sale price from the moment of transfer, this custom shall be considered part of the contract.
2. Product and Yield Obtaining: If the buyer takes delivery of the goods and begins to derive benefits from them (product, rental income, offspring, etc.), it is considered unfair for them to benefit "from both the goods and the money" simultaneously. Therefore, the seller may demand interest on the money in return for the income generated from the goods.
3. Fixed Due Date: If a specific calendar date (due date) is specified in the contract for payment, the buyer automatically defaults upon the expiration of that date, and interest accrues.

11. Buyer's Default and Seller's Right of Withdrawal

The buyer's delay in paying the purchase price (default) gives the seller the right to unilaterally terminate the contract under certain conditions. However, this right is subject to two different regimes depending on whether the goods have been delivered or not.

A. Right of Withdrawal in Cash Sales 

In cases where the "payment in advance" or "simultaneous performance" (cash sale) principle applies:

• Automatic Termination: The seller may terminate the contract without any further notice or extension of time if the buyer defaults on payment.
• Notification Obligation: If the seller intends to exercise this right, without delay . Otherwise, it may be deemed that the buyer has consented to the performance.

B. Right of Withdrawal in Installment Sales (After Delivery) 

One of the most critical rules in our legal system comes into play here:

• Rule: If the seller has transferred possession of the goods to the buyer without receiving payment (installment sale), the seller generally cannot reclaim the goods even if the buyer fails to pay; they can only pursue legal action/lawsuits to recover the money.
• Exception (Explicit Clause): For the seller to be able to reclaim the goods after delivery due to default, the contract "if payment is not made, the seller has the right to reclaim/take back the goods .

12. Calculation of Damages in Case of Buyer's Default

When the buyer defaults on payment, the seller can not only terminate the contract but also claim compensation for the damages incurred. The legislator has stipulated two main methods for calculating these damages:

A. Concrete Damage Calculation (Substitution Sale)

If the buyer fails to take delivery of the goods or pay for them, the seller may be forced to sell the goods to someone else.

• Method: If the seller sells the goods to a third party in accordance with the rules of honesty (while considering the market price), the negative difference .
• Key Criterion: The second sale must comply with the "principle of good faith"; that is, the seller cannot intentionally sell the goods at a very low price and pass the difference on to the previous buyer.

B. Abstract Loss Calculation (Market Price Difference)

If the commodity being sold is a publicly traded item or has a general market price (such as gold, foreign currency, certain raw materials, etc.), the seller does not need to physically sell the commodity to someone else.

• Method: price agreed upon in the contract and the market price of the goods on the due date (payment date) can be claimed directly as damages.
• Advantage: This method saves the seller the trouble and risk of reselling the goods to prove their loss.

While the provisions regarding the sale of movable property grant the parties broad freedom of contract, in cases where this freedom is not exercised or is left unchecked, the principle of good faith and equity- based supplementary legal rules come into play. When drafting a contract for the sale of movable property, it should be remembered that each article of the Turkish Code of Obligations (Articles 209-236), from the method of delivery to the transfer of risk, from the periods for reporting defects to the reservation of the right of withdrawal, serves as a "protective shield" in the event of a potential dispute.

13. Where is the Dispute Resolved? (Competent and Authorized Authority)

The key criterion determining where a lawsuit should be filed is whether the dispute is a "commercial" or a "consumer transaction".

A. Consumer Arbitration Boards and Consumer Courts

If the buyer has purchased the goods from a seller for non-commercial or non-professional purposes (personal use), of the Consumer Protection Lawapply.

• Monetary Limit: For disputes below a specific amount (the legal limits set for 2026, updated annually), to the Consumer Arbitration Boards. The decisions of these boards have the force of a court judgment.

• Upper Limit: For disputes exceeding this amount, Consumer Courts have jurisdiction.

B. Primary Commercial Courts

In cases where both parties are merchants and the dispute relates to the commercial businesses of both parties (for example, the sale of raw materials between two companies), the case the Civil Commercial Court.

C. Civil Courts of First Instance

If the parties are not merchants and the transaction is not a consumer transaction (for example, the sale of a used vehicle or goods between two individuals), the Civil Court of First Instance , has competence.

Jurisdiction: As a rule, the lawsuit of the defendant's domicile or the place where the contract is to be performed (delivery is to be made) .

14. How are Disputes Resolved? (Process and Procedure)

The process for resolving disputes involving movable property generally follows these steps:

A. Mandatory Mediation Stage

In commercial disputes and many disputes falling within the jurisdiction of consumer courts, mediation is mandatory before filing a lawsuit. The parties attempt to reach an agreement with the assistance of a mediator; if an agreement cannot be reached, then legal action is taken.

B. Gathering Evidence and Proof

In movable property cases, the most important stage is the burden of proof.

• Notification of Defects: According to Article 223 of the Turkish Code of Obligations, it is examined whether the buyer inspected the goods within the prescribed time limit and notified the seller of any defects upon delivery.

• Written Evidence: Invoices, delivery notes, bank statements, and correspondence between the parties (email, WhatsApp, etc.) are submitted to the court.

C. Expert Examination

In most movable property disputes, the court appoints an expert . The expert;

• whether the goods have the alleged defect,

• Whether this defect is due to user error or a manufacturing defect,

• It technically reports the actual value of the asset on that day (for purposes of severance pay or damage calculation).

D. Enforcement of the Decision and Judgment

Based on the expert report and legal assessment, the court decides which of the buyer's optional rights (refund, repair, discount, etc.) will be applied. Once the decision becomes final, if the debtor fails to comply, the Enforcement Offices .