Contracts for Work: Proof of the Contractual Relationship, Delivery of the Work, and Proof of Delivery by Any Evidence, Including Witnesses

In general terms, a contract for work can be defined as a contract in which the contractor undertakes to produce a work and the commissioning party undertakes to pay a price in return (Art. 470 of the Turkish Code of Obligations, TBK). The construction-for-flats agreement (a mixed contract, but in essence a contract for work), facade or floor cladding works, and the production of a certain quantity of any goods can be given as examples of contracts for work.

In this article, without addressing matters such as the liability of the contractor and of the commissioning party, the elective rights of the commissioning party or the limitation period, we will briefly explain only certain points concerning the proof of the contractual relationship and the delivery of the work in contracts for work, in the light of recent decisions of the Court of Cassation (Yargıtay).

In practice, issues concerning the delivery of the work arise where the commissioning party, although the work produced has been delivered to it, refuses to pay the price of the product, claiming that the work has not been delivered (or in the exact opposite situation), or in actions for the collection of the balance of the work price brought against the commissioning party by a contractor who has undertaken under a contract for work to construct a building, on the ground that the provisional acceptance and/or the final progress payment of the work has not been made.

Proof of the Contractual Relationship in a Contract for Work

As a rule, a contract for work is not subject to any mandatory formal requirement. However, if one of the parties denies the contractual relationship, the other party must prove the relationship in accordance with the rules on proof by written evidence (HMK Art. 200). At this point, proof by witnesses may be possible where the opposing party gives its express consent (HMK Art. 200/2) or in respect of relationships that fall below the monetary threshold for proof by written instrument.

Even if there is no written contract between the parties, it is also possible to prove the contractual relationship by admission and oath, which constitute conclusive evidence.

For the purpose of proving the contractual relationship, documents that qualify as prima facie written evidence, e-mail correspondence, and SMS and WhatsApp messages may be used as prima facie written evidence. However, it should not be forgotten that prima facie written evidence must be supported by witness evidence in order to have evidentiary value (HMK Art. 202).

"As a rule, a contract for work is not subject to any mandatory formal requirement. Although no written form is required for the conclusion of the contract, if the contractual relationship is denied by the defendant, the rules on proof by written evidence must be observed, taking into account the amount claimed as well. Under Article 200 of HMK No. 6100, legal transactions made for the purpose of creating, extinguishing, transferring, modifying, renewing, postponing, acknowledging or discharging a right must be proved by a written instrument if their amount or value at the time they were made exceeds two thousand five hundred Turkish lira. Even if the amount or value of these legal transactions falls below two thousand five hundred Turkish lira for a reason such as payment or release from the debt, they cannot be proved without a written instrument. Even in the absence of a written contract, the contractual relationship can also be proved by the evidence of admission and oath, which reveal the existence of the contract and which, although not written evidence, constitute conclusive evidence. If the contractual relationship has not been proved by all of this evidence either, witnesses may be heard with the express consent of the opposing party, after reminding it of the provision in Article 200 of the HMK. Without express consent, the contractual relationship cannot be proved by witnesses. As an exception to this, under Article 202 of the HMK, in cases where proof by written instrument is mandatory, witnesses may be heard if there is prima facie written evidence. In the present case, the defendant has claimed, through consistent statements in the file, that no contractual relationship was established between the parties, and since it also did not consent to the hearing of witnesses, the plaintiff must prove by conclusive evidence that a contractual relationship was established. The plaintiff relied on the evidence of oath in its list of evidence, and the court is obliged to remind the requesting party that it has the right to tender the oath; no decision can be given without allowing the right to tender the oath to be exercised. What the court should have done was, since the plaintiff expressly relied on the evidence of oath, to remind the plaintiff of its right to tender the oath to the defendant on the matters that could not be proved and to give a decision in accordance with the outcome; instead, it was not correct to decide to accept the action on the basis of an invoice and a witness statement not accepted by the defendant, and it has been found appropriate to reverse the judgment. CONCLUSION: For the reasons explained above, it is decided that the defendant’s appeals be accepted and that the judgment be REVERSED in favor of the appealing defendant.." (Court of Cassation, 15th Civil Chamber, Docket No. 2019/3906, Decision No. 2020/1771, 23.6.2020)

"In its action, the plaintiff stated that it had carried out the complete interior decoration work of the defendant’s residence, that the invoice receivable of 53,100.00 TL in total arising from this work had not been paid by the defendant, and that the enforcement proceedings it had initiated had also been objected to, and requested that the objection be set aside; in its defense, the defendant stated that it owed no debt whatsoever to the plaintiff and that there was no contractual relationship between them, and requested that the action be dismissed. On the ground that it was accepted, on the basis of the witness statements heard by the court and the demonstration made in person at the site, that the works had been carried out by the plaintiff, the court decided that the defendant’s objection be set aside in the amount of 52,022.00 TL and the enforcement proceedings continue, that statutory interest be applied to the principal claim of 51,571.00 TL from the date of the enforcement proceedings, that the claim for the excess be dismissed, and that the request for compensation for denial of debt be dismissed since its conditions were not met. Although the plaintiff claimed in its statement of claim that there was a contractual relationship between it and the defendant, the defendant denied the contractual relationship, and the plaintiff could not submit any written document in this respect. The basic legal relationship alleged to have been established is the contract for work defined in Article 470 of the TBK. As a rule, a contract for work is not subject to any mandatory formal requirement. However, if an orally concluded contract is denied, and its amount or value at the time the contract was made exceeds the amount set out in Article 200 of the HMK, the plaintiff must prove the contractual relationship by written evidence pursuant to that statutory provision. For the contractual relationship to be proved by witness evidence, either the plaintiff must have relied on "prima facie written evidence" or the defendant must have expressly agreed to the hearing of witnesses. In the present case, considering the value of the action, there are no other legal grounds that would allow witnesses to be heard, and since the defendant did not expressly consent, witnesses cannot be heard; moreover, even if a witness had been heard, it would not be possible to rely on the statement. The plaintiff could not prove its claim and the denied contractual relationship by legal evidence. However, in the evidence section of the statement of claim, it expressly relied on the evidence of oath. In this case, the plaintiff must be reminded that it has the right to tender the oath to the defendant concerning the existence of the contractual relationship, and a decision must be given according to the outcome. It was not correct for the court to partially accept the action in the amount stated without considering this matter, and the judgment had to be reversed. CONCLUSION: For the reasons explained in subparagraph 1 above, it is decided that all of the plaintiff’s appeals be rejected and, pursuant to subparagraph 2, that the appeals be accepted and the judgment be REVERSED in favor of the defendant.." (Court of Cassation, 15th Civil Chamber, Docket No. 2016/6206, Decision No. 2018/1483, 11.4.2018)

Delivery of the Work in Contracts for Work

First of all, it should be noted that establishing the fact of delivery is very important for determining when the contractor’s claim to the price in return for the work becomes due and for establishing when the limitation period for liability for defects begins to run.

The acceptance of the work by the commissioning party may be express (explicit) or implied (tacit). TBK Art. 47/1 regulates this matter as follows: “After the express or implied acceptance of the work, the contractor is released from all liability; however, its liability continues for defects that it intentionally concealed and that could not be noticed during a proper inspection.”

Acceptance can be defined as the commissioning party’s declaration of intent that the work has been produced in accordance with the contract. In this respect, the fact that the work has been delivered will not mean that the work has been accepted. If delivery took place without acceptance, the extent to which the contractor produced the work in conformity with the contract will be examined during the proceedings by a court-appointed expert. In that case, the contractor will be entitled to remuneration to the extent that it produced the work in accordance with the contract.

In decisions of the Court of Cassation, delivery has been defined as the contractor placing the completed work under the actual control of the commissioning party with the intention of performing the contract. As can be seen, the definition is made up of two basic elements: the work must have been completed, and the work must have been placed under the actual control of the commissioning party. Where the work has not been completed, or where, even if completed, it has not been brought within the commissioning party’s sphere of actual control, there can be no question of delivery. At this point, where the work has been largely completed by the contractor, the commissioning party’s assertion that the work has not been delivered on the ground that it has not been completed may amount to acting contrary to the rule of good faith under Art. 2 of the Turkish Civil Code (TMK). In such a case, this assertion of the commissioning party will not be protected by the legal order.

As regards proving whether or not the work has been delivered, the contractor and the commissioning party may include in the contract they conclude a provision on the evidence by which proof is to be made (an evidence agreement). If the contract between the parties contains no such provision on the proof of delivery, the fact that the contractor delivered the work can, as a rule, be proved by any kind of evidence (including witnesses). The reason why the fact of delivery can be proved by any kind of evidence is that delivery is not a legal transaction but a legal act.

In legal doctrine, some authors have stated that the fact that the work has actually begun to be used is also a criterion for the proof of delivery. The fact that the work is actually being used may constitute evidence that delivery has taken place, particularly where it is not possible to rely on written evidence or witness evidence.

“(...) In contracts for work, delivery is defined as the contractor placing the completed work under the actual control of the commissioning party with the intention of performing the contract. Since, according to the defense in the present case, the burden of proving delivery lies with the subcontractors, how this delivery is to be proved constitutes the crux of the case. Since delivery is not a legal transaction but a legal act, the subcontractor (contractor) may, as a rule, prove the fact that it delivered the work it produced by any kind of evidence, including even witnesses. In the light of these explanations, since in the present case the level of the works carried out was not determined by the parties through the preservation of evidence after the work was abandoned or stopped by the parties, according to the settled case law and practice of this Chamber, where a contract for work exists, the works carried out and delivered by the subcontractors (contractor) can be proved by any kind of evidence, including witness statements (...) (Court of Cassation, 15th Civil Chamber, Docket No. 2020/1047, Decision No. 2020/2622, 30.9.2020)

“The contractual relationship established orally between the parties is in the nature of a contract for work regulated in Articles 470 et seq. of the Turkish Code of Obligations No. 6098, and it is clear that the dispute must be resolved in accordance with these provisions. In general, in contracts for work, the contractor is under an obligation to deliver the work it has produced in accordance with the contract. In proving whether or not the work has been delivered, the parties may include a provision in the contract on the evidence by which proof is to be made and may conclude an evidence agreement regarding delivery. If there is no such evidence agreement, since delivery is not a legal transaction but a legal act, the contractor may, as a rule, prove the fact that it delivered the work it produced by any kind of evidence, including even witnesses.

In the present case, the plaintiff also relied on invoices and delivery notes among its evidence, and although the court accepted that the goods in the delivery note bearing the signature of the defendant company’s authorized representative had been delivered, it did not investigate whether the persons who took delivery under the other delivery notes were employees of the defendant company, and although the fact that the work was performed and delivered under a contract for work can be proved by witness statements, since it is a material fact, the persons whose names are written on the delivery notes were not heard as witnesses either. What should have been done was to examine whether the persons who took delivery on behalf of the commissioning party at the bottom of the delivery notes other than those accepted by the defendant were employees of the defendant company, and, if the signatures were denied, to investigate this matter through Social Security Institution (SGK) records and other evidence, and, after hearing as witnesses the persons whose signatures appear in the delivered-by and received-by sections of the accepted delivery notes, to accept, if it is understood that they are persons authorized to represent the defendant company, that delivery has been proved, and then to carry out an on-site inspection and expert examination with a qualified technical court-appointed expert to examine whether the installation was carried out, and, if it is understood that the work was performed, to obtain a reasoned report open to review in order to determine its price according to the local market prices on the date it was performed, and to give a decision in accordance with the outcome by adding to the plaintiff’s claim also invoice No. 3347, whose delivery note bears the signature of the defendant’s authorized representative; instead, it was not correct to decide on the basis of an incomplete examination, nor was it correct, although the plaintiff had also requested compensation for denial of debt, not to give a judgment, positive or negative, on this matter with a statement of its reasons, and therefore the decision had to be reversed in favor of the plaintiff.” (Court of Cassation, 15th Civil Chamber, Docket No. 2018/4925, Decision No. 2019/2949, 24.6.2019)

“The action consists of a request to set aside the objection to the enforcement proceedings initiated with a request for the collection of the claim for the balance of the work price arising from a contract for work. The plaintiff is the contractor and the defendant is the commissioning party. Counsel for the plaintiff contractor stated that their client company had a commercial relationship with the defendant company, that within this framework goods/services had been supplied to the defendant company by their client, but that it had not paid the balance of its debt, and that for the collection of the receivable (....) In general, in contracts for work, the mere fact that the contractor produces the work does not mean that it has performed its principal obligation. The contractor is under an obligation to deliver the work it has produced in accordance with the contract. The contractor will produce the work it has undertaken and will deliver the work it has produced to the commissioning party in accordance with procedure and law and with the provisions of the contract. Since the obligation to deliver the work lies with the contractor, the burden of proving that the work has been delivered also falls on the contractor. In other words, the contractor must prove that it delivered the work to the commissioning party in accordance with the contract. In order to become entitled to the price, the plaintiff contractor is obliged to prove that it delivered the work to the commissioning party within the time limit at the commissioning party’s place of business.

In contracts for work, delivery is defined as the contractor placing the completed work under the actual control of the commissioning party with the intention of performing the contract. Since the burden of proving delivery lies with the plaintiff contractor, how this delivery is to be proved constitutes the crux of the case. In proving whether or not the work has been delivered, the parties may include a provision in the contract on the evidence by which proof is to be made and may conclude an evidence agreement regarding delivery. If there is no such evidence agreement, since delivery is not a legal transaction but a legal act, the contractor may, as a rule, prove the fact that it delivered the work it produced by any kind of evidence, including even witnesses.

Turning to the present case in the light of these explanations: since the contractual relationship established between the parties involves neither a written contract nor a provision in such a contract on the proof of the fact of delivery in the nature of an evidence agreement concerning delivery, the plaintiff contractor will be able to prove the fact of delivery by any kind of evidence. Since counsel for the plaintiff relied on the delivery note as evidence in the statement of claim and in the reply petition, and counsel for both parties requested at the hearing of February 9, 2016 that Sedat Avcı be heard as a witness, this witness must be heard in due form on the fact of delivery, and, taking the other evidence into account as well, whether or not delivery took place must be determined in a manner leaving no room for hesitation, and the dispute must be decided accordingly. Giving a judgment on the merits without collecting the parties’ evidence and by rejecting the requests of the parties’ counsel on this matter has been considered a violation of the right to be heard, which is the most important element of the right to a fair trial regulated in Article 36 of the Constitution, Article 6 of the European Convention on Human Rights and Article 27 of HMK No. 6100, and consequently of the right of defense, and the judgment, being contrary to procedure and law, had to be reversed.

CONCLUSION: For the reasons explained above, it is decided that the plaintiff’s request for rectification of the decision be accepted, that this Chamber’s judgment dated 15.12.2016, Docket No. 2016/6210, Decision No. 2016/481, be set aside and that the decision be REVERSED…” (Court of Cassation, 15th Civil Chamber, Docket No. 2017/526, Decision No. 2017/1199, 20.3.2017)

We believe that it is always advisable to obtain legal support from a lawyer in order to avoid any loss of rights.

This article is a general assessment prepared in accordance with the legislation in force on its date of publication; it does not constitute a legal opinion. This English text is a translation of the Turkish original; in case of any discrepancy, the Turkish version prevails.