Before addressing latent defects, it is necessary to examine the concept of defect in our legal system.
According to Article 8(1) of the Consumer Protection Law, a defective product is defined as a product that is noncompliant with the contract due to not conforming to the agreed-upon sample or model at the time of delivery to the consumer, or due to lacking the characteristics it objectively ought to possess.
Our legal system evaluates the concept of defect under three main categories: material, economic, and legal.
- Material defect refers to flaws that are visibly noticeable on the product and affect its usability.
- Economic defect means the product turns out to be more costly than promised. For example, an energy-saving A+ refrigerator that fails to save energy or consumes more electricity than expected.
- Legal defect occurs when the product cannot be legally used. For instance, selling a house without a proper zoning or building permit.
In order for a consumer to file a claim against the seller due to a defective product, the product must have been delivered to the consumer, and the defect must be substantial. Furthermore, the defect must have existed before delivery and must be proven. A person who purchases a product with knowledge of the defect is deemed to have accepted it and therefore cannot exercise any optional rights.
Consumer’s Optional Rights in Case of Defect
ARTICLE 11 – (1) In the event that the goods are found to be defective, the consumer may:
a) Withdraw from the contract by declaring that they are ready to return the goods,
b) Retain the goods and request a reduction in the purchase price in proportion to the defect,
c) Request free repair of the goods, provided it does not require an excessive expense, with all costs borne by the seller,
ç) If possible, request replacement of the goods with a non-defective equivalent.
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a) The consumer may return the goods completely and in the same condition, and receive a full refund of the amount paid.
b) The consumer may choose not to return the goods but instead request a partial refund from the seller in proportion to the defect.
c) The consumer may request the repair of the defective goods at the seller’s expense; however, if the repair costs are close to or exceed the value of the goods, the court may restrict the use of this right and allow the consumer to exercise other optional rights.
d) The consumer may return the goods and request a non-defective equivalent from the seller.
These optional rights can also be exercised in the case of hidden defects. The exercise of these rights does not affect the consumer’s right to claim compensation. A consumer who exercises one of these optional rights may also additionally request compensation.
What Is the Difference Between an Apparent Defect and a Hidden Defect?
If a defect is clearly visible at the time of delivery or can be noticed through a simple inspection, it is referred to as an apparent defect.
ARTICLE 10 – (1) Defects that become apparent within six months from the delivery date are presumed to have existed at the time of delivery. In this case, the burden of proof that the product is not defective lies with the seller.
As understood from this article, it is possible to notify the seller about a simple defect within six months. If the seller cannot prove that the defect is due to the consumer’s fault and not inherent in the product, the consumer gains the right to exercise their optional remedies.
A hidden defect, on the other hand, refers to defects that become apparent after the delivery of the product or during its use. Upon noticing a hidden defect, the consumer must immediately notify the seller.
Warranty Period
Consumer Law ARTICLE 12 – (1) Unless a longer period is specified in the laws or in the contract between the parties, liability for defective goods is subject to a statute of limitations of two years from the date the goods are delivered to the consumer, even if the defect appears later. This period is five years for immovable property used as a residence or for vacation purposes, starting from the delivery date of the immovable property.
As a result of the principle of freedom of contract, the parties may determine this period; however, the Consumer Law sets the minimum limit of this period as two years. There is no statute of limitations for transactions concealed by fraud or gross negligence.
15th Civil Chamber, Case No. 2015/2137, Decision No. 2016/228
Regarding the specific case in question, in the file numbered 2012/150 D. of the … Civil Court of First Instance, it was determined, and based on the on-site inspection conducted during the trial process, the technical expert report by the mechanical engineer concluded that the defect in the work is of a hidden nature and that damage amounting to 5,989.00 TL has occurred. Both reports are consistent with the case file in terms of content and calculation method and are subject to review by the Court of Cassation. The work was delivered on 17.10.2012, and the existence of the hidden defect was established by the report dated 03.12.2012. Therefore, the discovery of the hidden defect falls within the two-year warranty period. There is no procedural or legal violation in claiming damages based on market values within a reasonable period after the discovery of the hidden defect.
Competent Court
In cases of defects, the consumer court is assigned to handle the exercise of the consumer’s alternative rights. However, before applying to the consumer court, it is mandatory to use alternative dispute resolution methods as a condition precedent to the lawsuit. It is required to apply to the consumer arbitration committee, arbitration, or mediation. If these are not applied to beforehand, the lawsuit will be dismissed on procedural grounds.
Relevant Supreme Court Decisions
13th Civil Chamber, Case No. 2013/26934, Decision No. 2013/33340
The issue of whether a defect is a hidden defect or an apparent defect shall be determined by the court’s decision. Generally, the expert report is accepted as the standard, and the experiences of everyday life can also reveal the nature of the defect. For example, if it is understood that the mileage of a vehicle has been tampered with, this should be accepted as a hidden defect, not an apparent defect. Here, the expert can provide an opinion as a specialist on whether the act actually occurred and whether an average user would notice it or not. Otherwise, it is more legally appropriate for the court to make the distinction between apparent and hidden defects—in other words, for the court to have the final say.
Indeed, it is understood that the court accepted the defect as a hidden defect and decided for the return of the vehicle and the collection of the price from the defendant. The defendant appealed this decision, and our chamber overturned it. The annulment decision states as follows:
“The plaintiff requested a refund on the grounds that the vehicle received from the defendant had a hidden defect. However, upon examining the case file, it was found that one of the plaintiff’s witnesses stated that the vehicle took in water one month after the purchase. Despite this, the plaintiff did not immediately notify the defect, and it was understood that the first complaint was made to the service on 12.05.2011. Given this, since the defect was not reported in time, the case should have been dismissed, but the written decision accepting the claim is contrary to procedure and law and requires annulment.”
In our annulment decision, it was also determined that the defect was a hidden defect and that the case should be dismissed due to the failure to notify within the prescribed time. There is no finding anywhere in our decision that the defect was an “apparent defect.”
Since the defendant did not file a motion for reconsideration against this decision, in other words, there is no request for correction stating “the defect is an apparent defect, not a hidden one,” the nature of the defect has been finalized due to the acquisition of procedural rights.
The defect in the vehicle subject to the case is a “hidden defect” and cannot be described as an apparent defect. As explained above, the period in Article 4 of Law No. 4077 does not apply to hidden defects, so the idea that the case should be dismissed because of the notification period that cannot be considered ex officio has no basis.
Therefore, I believe the decision given by the court should be upheld, and I do not agree with the honorable majority’s decision to reject the cancellation of the annulment.
13th Civil Chamber, Case No: 2015/24044, Decision No: 2015/34589
The burden of proof that the plaintiff made the defect notification within the time period specified by law lies with the plaintiff. After the court collects the plaintiff’s evidence regarding whether the defect notification was made within the deadline, an expert opinion suitable for party and judicial review should be obtained to determine the dates when the defects appeared. Additionally, the plaintiff’s application dated 16.09.2008, which reports certain defects and deficiencies in the immovable property and common areas following the notification by the final acceptance committee, should also be evaluated. A decision should then be made based on these findings. Issuing a judgment with an incomplete examination as stated is against procedural rules and the law and requires annulment.
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