Defective Service
In order to provide a clearer understanding of the service provider’s liability arising from defective services, it is necessary, as a preliminary matter, to examine the concepts of defect and service as regulated under Law No. 6502 on the Protection of Consumers (“the Law”). Accordingly, the concept of service is defined in Article 3(d) of the Law under the heading “Definitions.” The Law defines a service as “the subject matter of any consumer transaction, other than the supply of goods, which is performed or undertaken in return for a fee or benefit.” Accordingly, all consumer transactions other than the sale of goods are deemed to fall within the scope of services under the Law.
In contrast to the concept of service, the concept of defect is not defined separately under the Law. According to the definition provided by the Turkish Language Association, defect is expressed as a malfunction or deficiency. However, under the Law, no separate definition is provided for the concept of defect; instead, the Law sets out what constitutes a defective service. In this respect, Article 13 of the Law defines a defective service as “a service which is contrary to the contract due to its failure to commence within the period specified in the contract or due to the absence of the characteristics agreed by the parties or objectively required.”
Likewise, paragraph 2 of the same Article provides that services shall be deemed defective where they do not possess the characteristics notified by the service provider or stated on its website, internet portal, advertisements or promotional materials, or where they contain material, legal or economic deficiencies that reduce or eliminate their value in terms of the intended use or the benefits reasonably expected by the consumer.
The party providing the service is referred to as the service provider. According to the Law, a service provider is defined as a real or legal person, including public legal entities, who offers services to consumers for commercial or professional purposes, or who acts on behalf of or on account of the service provider. Where the service provider fails to perform the service owed to the consumer in accordance with the conditions set out in the Law, liability for defective service shall arise.
Liability Arising from Defective Services
In legal systems around the world, it is generally accepted that the consumer is in a weaker position compared to the service provider, and legal regulations are shaped accordingly. There are various reasons for acknowledging the consumer’s weaker position vis-à-vis the service provider. These include, inter alia, the existence of an economic power imbalance between the consumer and the service provider, the consumer’s limited knowledge regarding the service provided, and the consumer’s weak position during contractual negotiations.
As in many other legal systems, Law No. 6502 on the Protection of Consumers, as its name expressly indicates, is aimed at protecting consumers. Accordingly, even in the absence of fault on the part of the service provider, liability shall arise if the service is defective. For the purpose of consumer protection, the Law sets out certain conditions under which the service provider may be held liable for defective services.
Conditions for Liability Arising from Defective Services
Liability arising from defective services is regulated under Article 14 of Law No. 6502 on the Protection of Consumers. The Law stipulates that the service provider is obliged to perform the service in accordance with the contract. The same Article also sets forth the conditions under which the service provider may be released from liability. In this respect, Article 14/2 of Law No. 6502 on the Protection of Consumers provides that “Where the service provider proves that it was not aware of statements made through advertising not originating from itself and that it could not reasonably be expected to be aware of such statements, or that the content of such statements had been corrected at the time the service contract was concluded, or that the decision to conclude the service contract does not have a causal link with such statements, the service provider shall not be bound by the content of such statements.”
For the service provider to be held liable for a defect, the fulfillment of material conditions is required. Under Law No. 4077, the service provider was held liable for defects only where both material and formal conditions were satisfied; however, under Law No. 6502, the conditions for the service provider’s liability have been further relaxed in favour of the consumer. The formal condition referred to under Law No. 4077 was the consumer’s duty of inspection and notification. Nevertheless, since no such regulation exists under Law No. 6502, the service provider’s liability for defective services shall arise solely upon the existence of material conditions.
The material conditions addressed herein shall, as a rule, be considered with respect to defects relating to the required characteristics (necessary qualities). With regard to defects stated, undertaken, or declared by the service provider (“mentioned and promised”), the material conditions shall be deemed to have been fulfilled where the service provider’s statements, made in a manner capable of influencing the consumer, as to whether certain characteristics exist or do not exist in the service, prove to be contrary to the actual situation. The conditions giving rise to liability arising from defective services will be examined below under separate headings. These conditions are cumulative, and the service provider’s liability arising from defective services shall arise only where all such conditions are present simultaneously.
Provision of a Defective Service and the Existence of a Defect
As in the Turkish legal system in general, the existence of a legal transaction is a prerequisite for the existence of an unlawful act. Accordingly, in order for the service provider to be held liable for a defective service, the service must first have been provided to the consumer. The existence of a consumer transaction is established through the concurrence of the parties’ mutual intent, whereby the service provider undertakes to provide the service and the consumer agrees to receive such service.
For the service provider to be held liable for a defect, a defective service must have been provided. The contractual non-conformity in the service must constitute a deficiency that qualifies as a defect within the meaning of the Law. On the other hand, as expressly stated in the regulation, late performance, namely default, is included within the scope of a defect; accordingly, in cases of default, the provisions governing liability arising from defects shall also apply. One view in the doctrine emphasizes that the inclusion of late performance within this scope is meaningless, arguing that the regulation has no legal consequence and therefore should not be applied at all. Another view, while criticizing the regulation, accepts late performance within the scope of Article 13 of the Consumer Protection Law due to its explicit wording, and states that the only difference created by characterizing late performance as a “defect” would arise in terms of the determination of the competent court.
Accordingly, as expressly stated in the Law, the service provided must be a service that is contrary to the contract, either due to its failure to commence within the period specified in the contract by the service provider or due to its lack of the characteristics agreed by the parties or objectively required to be possessed.
Uncertainty as to Whether the Defect Is Required to Be Material
While the Turkish Code of Obligations requires that a defect significantly reduce the value or utility of the goods as a condition for liability for defects, no such regulation is provided under the Consumer Protection Law. According to certain scholars, the legislator’s deliberate silence on this matter indicates that the defect is not required to be material under the Law.
It should be noted that, in any event, it is generally not possible to pursue the seller’s liability on the basis of minor defects; alternatively, in accordance with the principle of good faith, rights such as compensation, price reduction, or free repair, which do not unduly burden the entrepreneur, may be exercised.
Although the decisions of the High Court have stated that the defect must be material, we are of the opinion that, despite being expressly regulated under the former law, the legislator has deliberately remained silent on this matter under the law currently in force. Accordingly, the defect is not required to be material. Moreover, considering Directive 1999/44/EC and the general purpose pursued by Law No. 6502, and given that no such distinction has been made in the Law, it would be more appropriate to interpret this situation in favour of the consumer. However, in order to ensure a balance of interests between the consumer and the service provider and to prevent unjust situations arising from exceeding the consumer-protection purpose of the Consumer Protection Law, it would be correct to interpret the absence of a requirement that the defect be material within the framework of Article 2 of the Turkish Civil Code.
The Time at Which the Defect Must Exist
According to the view accepted in the doctrine, a defect in the sold goods must exist at the moment when the risk and benefit of the goods pass to the consumer. Indeed, Article 8/1 of Law No. 6502 also refers to defective goods as those which “do not possess the required characteristics at the time of delivery to the consumer.”
There is no doubt that this rule, which is prescribed for defective goods, shall also apply to defective services. Although this constitutes the general rule, the situation may vary depending on the nature and conditions of the service provided. For instance, in the case of a defect in a kitchen cabinet ordered to be manufactured, the determination of the moment at which the defect arises shall be resolved pursuant to the provisions governing damage under a contract for work, and therefore the relevant rule applicable to that situation should be taken into consideration (Turkish Code of Obligations Art. 483). In contrast, in continuous performance contracts such as agency agreements, the existence of a defect is assessed at each instance the service is provided.
The Consumer’s Use of the Service Without Knowledge of the Defect or in Circumstances Where the Consumer Could Not Reasonably Be Expected to Be Aware of the Defect
Article 222 of the Turkish Code of Obligations provides that the seller shall not be liable for defects known to the buyer at the time the sales contract is concluded. For this provision to apply, the buyer must be aware not only of the defect itself but also of the consequences arising therefrom. Likewise, Article 10/2 of Law No. 6502 on the Protection of Consumers states that “where the consumer was aware of the defect at the time the contract was concluded or could reasonably be expected to have been aware of it, no contractual non-conformity shall be deemed to exist.” A similar regulation is also found in Article 2(3) of Directive 1999/44/EC.
The Law does not contain such a regulation with respect to defective services. Depending on the specific circumstances of the case, we are of the opinion that the provisions governing defective goods may also be applied to defective services by analogy. Since services are generally performed after the conclusion of the contract, it appears unlikely in practice that the consumer would be aware of the defect at the stage of contract formation. Accordingly, this may be the reason why no such regulation has been expressly provided under the Law with respect to defective services.
The Service Provider’s Lack of Requirement to Be Aware of the Defect
Although no explicit provision exists in Law No. 6502 in this respect, this conclusion arises through the analogical application of the provisions of the Turkish Code of Obligations pursuant to Article 83/1 of the Consumer Protection Law. In this regard, Article 219/2 of the Turkish Code of Obligations provides that “the seller shall be liable for defects even if the seller was not aware of their existence.”
Accordingly, for the service provider’s liability to arise under the provisions governing defects, it is not required that the service provider be aware of the existence of the defect or that it be expected to be aware of it. However, where the service provider is aware of the defect, the existence of a fraudulent defect may be accepted. In such case, the service provider’s liability arising from the defect becomes aggravated, and Article 16/2 of the Consumer Protection Law shall apply instead of the short limitation periods prescribed for liability arising from defective services.
Invalidity of the Disclaimer Agreement
According to Article 221 of the Turkish Code of Obligations, clauses excluding or limiting liability shall be valid provided that the seller has not concealed the defect from the consumer through gross fault. However, Law No. 6502 does not contain any provision regulating this matter. At first glance, it may be considered that this rule could also apply to consumer transactions by virtue of the reference set forth in Article 83/1 of Law No. 6502.
In the general justification of Law No. 6502, it is stated that European Union Directives and recommendation decisions were taken into account during the drafting of the Law. Article 8 of the Directive adopted by the Council of the European Union dated 25 July 1985 provides that any terms excluding or limiting liability for damages arising from a defect shall be invalid, even where the defect has arisen from the acts of third parties.
Likewise, Article 10/3 of Law No. 6502 provides that “an explanatory label containing information regarding the defect of the goods shall be affixed by the manufacturer, importer or seller onto the defective goods offered for sale or onto their packaging in a manner that can be easily read by the consumer. It is mandatory that this label be delivered to the consumer or that the explanatory information regarding the defect be clearly indicated on the invoice, receipt or sales document provided to the consumer.” Accordingly, even in the sale of defective goods, a seller who seeks to be exempt from liability is required to provide concrete and explicit warnings; otherwise, the seller cannot be released from liability. In other words, even if a disclaimer agreement is included in the contract, it shall have no legal effect. Therefore, although not expressly stated by the legislator, it is evident from the legislative rationale and the interpretation of the provisions that, under the application of Law No. 6502, clauses excluding or limiting the service provider’s liability are not valid.
Conclusion
For the service provider’s liability arising from defective services to occur, all of the conditions set out above must be fulfilled cumulatively. In the absence of any one of these conditions, the service provider cannot be held liable for defective services. Although Article 83/1 of Law No. 6502 provides that general provisions shall apply in cases where no specific provision exists under the Law, it would be more appropriate to interpret matters not expressly regulated in the Law in favour of the consumer, in accordance with the specific circumstances of the case and the spirit of the Law.
As a result of the service provider’s liability arising from defective services, the consumer shall be entitled to exercise the rights set out under Article 15 of Law No. 6502 on the Protection of Consumers, titled “Optional Rights of the Consumer.”