Seller’s Liability for Defects in Goods Sales

Seller’s Liability for Defects in Goods Sales. Although sale of goods relations are at the center of economic life, the failure of the sold goods to possess the promised or expected qualities frequently leads to legal disputes between parties. The institution of the seller’s liability for defects comes into play at this point; it provides a special liability regime that secures the seller’s obligation to deliver goods in conformity with the contract and offers the buyer a wide range of optional rights, from the return of the goods to a price reduction. This study aims to comprehensively analyze this liability regime, which is shaped within the framework of the Turkish Code of Obligations No. 6098, the Turkish Commercial Code No. 6102, and the Law on the Protection of the Consumer No. 6502, focusing on material and formal conditions, notification burdens, and current judicial decisions.

1. Executive Summary and Legal Framework

Sales contracts constitute the most fundamental building block of the modern economic order, and a significant portion of disputes arising from these contracts revolves around the goods sold not carrying the expected qualities, i.e., being “defective.” The Turkish legal system has envisaged a tripartite regime that differs according to the status of the parties and the nature of the transaction, rather than regulating the seller’s liability for defects under a single law: The Turkish Code of Obligations (TCO) No. 6098, which serves as the general provision; the Turkish Commercial Code (TCC) No. 6102, which is based on the speed and prudence required by commercial life; and the Law on the Protection of the Consumer (TKHK) No. 6502, which aims to protect the buyer in a weaker position. This report examines the seller’s liability for defects in all its dimensions, observing the distinctions of “consumer,” “merchant,” and “ordinary debtor” in light of the relevant legislation, theoretical discussions in the doctrine, and the established and current precedents of the Court of Cassation (Yargıtay).

The primary objective of the report is to deeply analyze the legal nature of the seller’s liability, the material and formal conditions necessary for the liability to arise, the buyer’s notification burdens, and the principles regarding the use of optional rights. In particular, recent developments such as radical changes made to consumer legislation with Law No. 7392, the extension of the presumption of defect period, and regulations on refurbished products are given extensive coverage in the report as critical elements changing the course of practice.

2. Legal Nature and Types of Defect

Although the seller’s liability for defects is evaluated under the scope of “bad performance” (failure to perform properly), which is one of the cases of failure to deliver the sold goods in accordance with the contract (non-performance), the legislator has envisaged a special “warranty” (tekeffül) liability for this situation, distinct from the general provisions (TCO Art. 112). A defect is an objective or subjective deficiency existing at the time the benefit and risk pass to the buyer, which reduces or eliminates the value of the goods or the benefit expected from them.

2.1. Elements and Classification of Defect

Legal theory and judicial practices treat defect not merely as a physical malfunction but as a broad concept affecting the economic and legal status of the goods. In this context, defect types are grouped into three main categories:

Material Defect: Refers to deficiencies in the physical structure, components, or functioning of the goods. A car engine being faulty, fabric dye running, or an electronic device having a broken screen are considered material defects. In Court of Cassation decisions, even paint thickness on a vehicle exceeding factory standards is accepted as a material defect (latent defect) on the grounds that it causes a loss of value in the second-hand market.

Legal Defect: Is the prevention or limitation of the use of the goods due to public law rules or administrative restrictions, despite there being no problem with the physical existence of the goods. For example, land sold being designated as a green area in the zoning plan, construction not being permitted, or a vehicle being banned from traffic due to chassis number tampering are of the nature of a legal defect. Legal defect is different from the concept of eviction (zapt), which is a claim of right arising from private law by a third party; legal defect usually refers to administrative and public restrictions.

Economic Defect: Is the situation where the goods do not provide the promised efficiency, performance, or economic return. A seller’s guarantee regarding a vehicle’s fuel consumption proving false or an industrial machine falling below the promised production capacity is characterized as an economic defect. Economic defect focuses on the “profitability” function of the goods rather than their physical integrity.

2.2. Distinction Regarding Detectability: Patent and Latent Defect

The operation of the liability regime is vitally important regarding when the defect can be noticed, especially in terms of notification periods and burden of proof.

Defect Type	Definition and Detection Method	Legal Consequence and Notification Obligation
Patent (Open) Defect	Deficiencies that can be noticed by the buyer through an ordinary inspection (simple examination with sensory organs) at the time of delivery. E.g., a tear in furniture, a crack in glass.	The buyer must notify the seller of the situation before accepting the goods or immediately after delivery. Otherwise, the goods are deemed accepted in this condition.
Latent (Hidden) Defect	Defects that cannot be understood through ordinary inspection, which emerge with the use of the goods or over time, or which can only be detected through technical examination (expert). E.g., Foundation insulation of a building, internal engine components.	Must be notified immediately (under TCO and TCC regimes) the moment it appears. In consumer law, however, a notification period condition is not sought; it can be asserted within the statute of limitations.
Concealed Defect (Fraud)	Defects that the seller hides from the buyer through fraudulent behaviors or gross negligence. E.g., A vehicle with lowered mileage, a device with deleted damage records.	The seller cannot assert the statute of limitations defense. The buyer can exercise their rights even if notification periods are not met.

2.3. Distinction Between Delivery of Aliud (Something Else) and Defective Performance

Another concept frequently discussed in Court of Cassation precedents and doctrine, but completely distinct from defective performance in terms of legal consequences, is “Aliud” delivery. Aliud is the delivery of a completely different good than the one agreed upon in the contract. For example, delivering “bulgur” when the buyer ordered “rice,” or giving a “2015 model vehicle” instead of a “2024 model vehicle” constitutes aliud performance.

According to the established precedents of the 19th Civil Chamber of the Court of Cassation, Aliud delivery is not a “defective performance” but a case of “non-performance” (total failure to perform). The practical result of this distinction is: In defective performance, the buyer is subject to short notification periods and a 2-year statute of limitations; whereas in the case of Aliud, the buyer does not have to bear the burden of defect notification and benefits from the 10-year general statute of limitations. Therefore, the nature of the deviation in the delivered goods (lack of quality vs. change of type) can determine the fate of the lawsuit.

3. Conditions Required for Liability to Arise

For the seller to be held liable for defects, in addition to the material conditions envisaged in TCO Art. 219 and following articles, the buyer must also have fulfilled the formal burdens incumbent upon them.

3.1. Material Conditions

Primarily, for the seller’s liability to arise, there must be a valid sales contract between the parties and the goods must have been delivered to the buyer. Before the goods are delivered, provisions regarding debtor’s default apply, not defect provisions. The defect must exist at the moment the benefit and risk pass to the buyer (usually upon delivery). Deteriorations occurring after delivery due to the buyer’s fault or ordinary wear and tear are not the seller’s responsibility.

A critical exception here is the condition that the buyer did not know of the defect when the contract was established (TCO Art. 222). If the buyer knew of the defect on the goods while purchasing them, the seller cannot be held liable. However, if the buyer “was in a position to know the defect with an ordinary review” (i.e., was negligent), the seller is only liable if they specifically guaranteed the absence of the defect. In consumer law, the burden of proof lies with the seller; the seller must prove that the consumer knew of the defect and purchased the goods despite it.

3.2. Formal Conditions: Burden of Inspection and Notification

The most complex area in the seller’s liability for defects, and where loss of rights occurs most frequently, is the buyer’s obligation to inspect and notify. This obligation shows radical differences depending on the party to the transaction (Merchant vs. Consumer).

3.2.1. Notification and Periods in Commercial Sales (TCC Regime)

In sales between merchants, extremely strict and short periods are envisaged pursuant to TCC Art. 23 and TCC Art. 18/3. Since a merchant acts like a “prudent businessman,” they are obliged to inspect the goods they receive with due care.

• Patent Defects: The merchant buyer must inspect the goods for clearly visible defects within 2 days of delivery and notify the seller within 8 days. These periods are of a forfeiture nature (rights are lost if missed).
• Latent Defects: For latent defects that emerge with the use of the goods, notification must be made “immediately” (in judicial practice, 8 days is applied by analogy) from the moment the defect is noticed.

Debate on the Form of Notification: TCC Art. 18/3 envisages that defect notifications between merchants be made via notary, registered letter with return receipt, telegram, or registered electronic mail (KEP) system. In the old TCC period and old Court of Cassation decisions, this form requirement was accepted as a “validity condition.” However, with the precedent decision of the General Assembly of Civil Chambers of the Court of Cassation (HGK) dated 2016 and the dominant view in the doctrine, it is now accepted that this requirement is a “condition of proof.” That is, if a merchant can prove in court that they made the notification via WhatsApp, e-mail, or fax (for example, with the counterparty’s written reply), the notification is deemed valid. Nevertheless, the use of a notary or KEP is recommended for security of proof.

3.2.2. Notification in Ordinary Sales (TCO Regime)

In sales between non-merchants (e.g., a second-hand car sale between two citizens), TCO Art. 223 applies. Instead of exact day counts, criteria of inspecting “as soon as feasible according to the usual course of business” and notifying within a “reasonable time” are introduced. The Court of Cassation determines “reasonable time” according to the characteristics of the event; while this period is very short for perishable foods, it can be interpreted more flexibly for durable goods.

3.2.3. Notification Exemption in Consumer Transactions (CPL Regime)

The Law on the Protection of the Consumer No. 6502 has lifted the burden of inspection and notification on consumers. Unlike the old law, the consumer is not obliged to inspect the goods immediately upon receipt or to notify of a defect within 30 days. The consumer can apply to the seller the moment they notice the defect in the goods within the statute of limitations (2 years). This regulation is one of the most important reforms aimed at protecting the weak position of the consumer.

Revolution in Presumption of Defect (6 Months vs. 1 Year): In consumer law, defects appearing after the delivery of the goods are presumed to have existed at the time of delivery (ordinary presumption). The burden of proof is on the seller; meaning the seller must prove that they delivered the goods defect-free or that the error was user-induced. The period of this presumption, located in Article 10 of Law No. 6502, was increased from 6 months to 1 year with the amendment made by Law No. 7392 (effective 2022). This implies that even for a refrigerator that malfunctions 11 months after delivery, the assumption of “manufacturing defect” will be valid, and the consumer will not have to deal with proof.

4. Buyer’s Optional Rights and Principles of Application

If it is understood that the goods are defective, the buyer may exercise one of four optional rights pursuant to TCO Art. 227 and TKHK Art. 11. These rights are formative (constructive) rights and produce results with a unilateral declaration of will directed at the seller. The seller is obliged to fulfill the right chosen by the consumer; they cannot impose an alternative such as “let me repair this, I won’t take it back.”

4.1. Right to Rescind the Contract (Refund)

The buyer has the right to terminate the contract by returning the goods and demanding the refund of the price paid. For this right to be exercised, the defect must be “substantial.” According to the rule of honesty, exercising the right of rescission for a very simple and remediable defect (e.g., a missing floor mat in a new car) may be considered an abuse of right.

Usage Fee Issue: In case of rescission of the contract, whether the buyer will pay the seller for the benefit obtained (usage fee) during the time they held the goods is controversial. General provisions of the TCO (Art. 229) envisage that the buyer returns the benefits obtained. However, in Consumer Law practice, the established precedents of the General Assembly of Civil Chambers of the Court of Cassation (HGK) have ruled that no usage fee can be claimed from the consumer in cases where the consumer exercises the right of rescission due to defective goods, on the grounds that the contract was breached due to the seller’s defective performance. This ensures that a consumer who returns a vehicle after using it for 1 year can get the full price back without paying for depreciation or rental value.

4.2. Right to Demand Price Reduction

The buyer may retain the goods and demand a reduction in the sales price in proportion to the defect. In calculating the reduction, the “relative method” is applied instead of the “absolute method” (sales price – defective value).

Formula: (Price Paid x Defective Value) / Non-Defective Market Value = Amount to be Paid.

The difference constitutes the amount of reduction to be refunded. This method ensures the preservation of the consequences of the good or bad bargain made by the buyer during the sale.

4.3. Right to Free Repair

The consumer may request the goods be repaired, with expenses borne by the seller. This right is frequently preferred, especially for technological products.

• Excessive Cost Limit: Pursuant to TCO Art. 227/3, if the repair cost imposes an “excessive” burden on the seller (e.g., a repair cost close to or exceeding the value of the goods), the seller may refuse repair. However, in consumer law, the manufacturer and importer are also jointly liable for repair, and the “excessive cost” defense is interpreted more narrowly.
• Repair Duration: The repair duration for industrial goods is a maximum of 20 business days (30 for some goods). If the goods are not repaired within this period, the consumer may forego the repair right and demand a refund or replacement.

4.4. Right to Replacement with a Non-Defective Equivalent

The buyer may demand the replacement of the defective goods with a defect-free equivalent. This right is used for “fungible” (mass-produced, replaceable) goods. Exercising the replacement right may not be possible for second-hand and specific (unique) goods due to impossibility. However, the TCO’s use of the term “similar” (benzeri) is interpreted in favor of the consumer in consumer law, allowing for a defective vehicle to be replaced with a new one of the same trim and model.

Impossibility of Replacement Right: If the seller does not have that good in stock or if production has ceased, the seller cannot fulfill the replacement request. In this case, the consumer is forced to turn to other optional rights (refund). However, the Court of Cassation does not always accept the “out of stock” defense and may mandate giving an equivalent (upper model) product or refunding the current value.

4.5. Changing Optional Rights (Jus Variandi) and Prohibition of Amendment (Islah)

In our law, as a rule, formative rights cannot be revoked once exercised. However, the Court of Cassation allows flexibility so that a consumer who chooses the repair right is not victimized. If the goods malfunction again or cannot be repaired after the consumer exercises the repair right, the consumer can revert to other rights (rescission). However, there are current and strict decisions of the 3rd Civil Chamber of the Court of Cassation regarding changing the request result (via Islah / amendment of claim) during the lawsuit. According to a 2024 decision, if the consumer requested “price reduction” in the lawsuit petition, they cannot change this to “rescission of contract” via amendment while the lawsuit is ongoing; because the optional right was exercised and consumed by filing the lawsuit. This necessitates the correct strategic determination of the demand when filing the lawsuit.

5. Statute of Limitations and Forfeiture Periods

The seller’s liability for defects is not infinite. Pursuant to the principle of legal certainty, the right to sue expires after certain periods.

Legislation and Good Type	Statute of Limitations	Start Date	Exceptions
Movable Goods (TCO/CPL)	2 Years	Date of delivery of goods	Statute of limitations does not apply if the seller has gross negligence or fraud (10 years or unlimited).
Immovable Properties	5 Years	Transfer of title / Delivery	Valid for structural defects in housing sales.
Second-Hand Goods (Consumer)	Min. 1 Year	Date of delivery of goods	Can be reduced to 1 year if parties agree, otherwise 2 years.
Commercial Sales	2 Years	Date of delivery of goods	TCC refers to TCO limitation periods.

An important point is the situation where a hidden defect emerges after the 2-year period has expired. Pursuant to the mandatory provision of TCO Art. 231, no matter how hidden the defect is, a lawsuit cannot be filed after 2 years (5 years for immovables) have passed since delivery. This period is a liability period, not a warranty period. However, if the seller committed fraud to conceal the defect (e.g., lowered the mileage of a vehicle), they cannot assert the statute of limitations defense.

6. Sectoral and Current Special Cases

6.1. Automotive Sector: Paint Thickness and Depreciation

The most frequently encountered dispute in the second-hand and new vehicle market is “paint thickness” differences. The Court of Cassation characterizes the paint thickness on some parts of a vehicle purchased as new being above factory standards as a “latent defect,” even if there is no accident or replaced part on the vehicle. This is because this situation lowers the second-hand value of the vehicle (economic defect). In these cases, the Court of Cassation usually rules for a price reduction in proportion to the defect (amount of depreciation) or replacement of the vehicle with an equivalent, rather than just vehicle exchange.

6.2. Refurbished Products and Law No. 7392

To reduce electronic waste and bring it into the economy, “Refurbished Product” status was introduced with Law No. 7392. Products such as mobile phones and tablets refurbished in accordance with standards at renewal centers authorized by the Ministry of Trade are sold certified and packaged. The Law imposes an obligation on sellers to provide a minimum one-year warranty for these products starting from the delivery date. This regulation aims to eliminate insecurity in the second-hand market and prevent the informal economy.

6.3. Prepaid Housing and Timeshare Sales

Regulations have also been tightened in the construction and timeshare sectors where consumer grievances are intense. The right of withdrawal in timeshare contracts and the provision that the delivery period in prepaid housing cannot exceed 36 months have been enacted. In case the consumer rescinds the contract, the seller is obliged to return the price and promissory notes within a certain period (such as 90 days).

Seller’s liability for defects in the sale of goods is a dynamic and multi-layered structure aimed at ensuring contractual justice. While our legislation prioritizes “prudence” and “speed” principles in relations between merchants, envisaging strict form and time conditions (8 days notification, condition of proof); in consumer transactions, pursuant to the principle of “protectionism,” it has lifted notification burdens, placed the burden of proof on the seller, and extended statutes of limitation/warranty periods (1-year presumption).

The critical point for practitioners is to correctly identify which regime (TCC, TCO, CPL) the dispute is subject to. For it is possible for a merchant to lose all their rights due to not notifying of a defect in time, whereas a consumer in the same situation can receive a refund even years later. The pro-consumer precedents of the Court of Cassation, especially regarding “non-payment of usage fee” and “replacement with equivalent,” demonstrate that sellers must raise their quality standards and attach importance to after-sales services. With the digitalization of trade, the integration of new concepts such as “refurbished products” into the law indicates that this area will maintain its currency.

---

Our Latest Articles