Can You Terminate a Real Estate Promise-of-Sale Contract Because the Price Has Become Too Low?

In an economy where inflation and exchange rates change rapidly, a sale price determined in the past can quickly come to appear "too low." In such a situation, the first question that comes to the mind of a seller who has promised to sell their real property is: "Can I unilaterally terminate this contract?" In this article, in light of Court of Cassation decisions, we examine the limits of the principle of adherence to the contract (pacta sunt servanda) in real estate promise-of-sale contracts, the institution of excessive difficulty of performance (adaptation) regulated under Article 138 of the Turkish Code of Obligations (TBK), and the compensation risks that may be faced in the event of unlawful termination.

Summary of the Situation

Under a real estate promise-of-sale contract executed before a notary between the parties, the seller has promised to sell the real property for a certain price; the buyer has paid a down payment, and possession (actual use) of the property has been transferred to the buyer. The contract has also been annotated on the title deed. Over time, due to changes in economic conditions, the seller, considering that the agreed price has become far too low relative to current conditions, is weighing whether to withdraw from the contract or to raise the price.

The Legal Issue

In Turkish law, the principle of "adherence to the contract" (pacta sunt servanda) is fundamental: the parties are bound by the contract they have signed and cannot free themselves from this bond through unilateral will. However, the institution of "excessive difficulty of performance" regulated under TBK Article 138 (commonly known as the "adaptation lawsuit") offers a way out where, due to extraordinary and unforeseeable circumstances arising after the contract was formed, performance of the obligation becomes "unbearable" for one party. The issue is whether economic fluctuations always satisfy the "unforeseeability" condition required by this article.

What Does the Court of Cassation Say?

Adherence to the Contract Is the Rule, Termination Is the Exception

The Grand Chamber of the Court of Cassation for Civil Matters (Yargıtay Hukuk Genel Kurulu) (E. 2023/1073, K. 2025/85, T. 2025) has expressly established that real estate promise-of-sale contracts can be terminated by mutual consent of the parties or by a court decision, but cannot be terminated by a unilateral declaration of intent. A party sending a direct notice of termination on the ground that "the price has become too low" carries the risk of being considered an unlawful termination.

Conditions for Adaptation: Four Criteria Required Together

For the right to adaptation or withdrawal to arise under TBK Article 138, as also confirmed by the Court of Cassation, 3rd Civil Chamber (E. 2023/1103, K. 2024/524, T. 2024), the following four conditions must be met together:

1. The emergence of an extraordinary circumstance that was not foreseen by the parties at the time the contract was formed,
2. This circumstance not being attributable to the debtor,
3. The existing facts altering performance to the debtor's detriment to a degree that would be contrary to the principle of good faith,
4. The debtor not yet having performed the obligation, or having performed it while reserving their rights.

A notable point: according to the settled approach of the Court of Cassation, 13th Civil Chamber (E. 2004/4131, K. 2004/14487, T. 2004), inflation and economic fluctuations in our country are generally considered "foreseeable." This is a factor that significantly narrows the likelihood that a request for adaptation or withdrawal will be accepted.

Transfer of Possession Makes the Right of Withdrawal More Difficult

The fact that the property has actually been delivered to the buyer (the keys have been handed over) is a factor that makes the seller's right of withdrawal more difficult within the framework of the principle of good faith (TMK Article 2). The buyer, who has taken over possession, acquires a legitimate reliance that the contract will be performed.

Damages for Which a Party May Be Liable in the Event of Unlawful Termination

If the seller proceeds directly to termination even though the conditions for adaptation have not been met, they may face a heavy compensation burden:

• Positive damages (expectation damages): The difference between the current market value of the property and the price agreed in the contract may be claimed (see Kayseri 2nd Commercial Court of First Instance, E. 2024/990, K. 2025/46, T. 2025).
• Negative damages (reliance damages): Expenses incurred in reliance on the belief that the contract would be performed (notary fees, duties, etc.) and other lost opportunities (Court of Cassation, 3rd Civil Chamber, E. 2020/3829, K. 2020/6537, T. 2020).
• Penalty clause: If the contract provides for a "withdrawal penalty" (TBK Article 179/III), the seller may free themselves from the contract by paying this penalty without paying further compensation; however, if there is no such provision, the buyer may claim the full amount of their loss (Court of Cassation, 15th Civil Chamber, E. 2014/6689, K. 2015/2707, T. 2015).

In addition, the buyer's right to file a direct lawsuit for "cancellation and registration of title deed" (compelling registration) always remains reserved; if the contract was executed in official form and possession was transferred, the likelihood of winning this lawsuit is quite high.

Points to Watch

• Obtain legal advice before sending a direct notice of termination. Unilateral terminations made without filing an adaptation lawsuit carry the risk of being considered unlawful.
• Accept payments "with rights reserved." If outstanding payments continue to be received, these payments must be accepted expressly "subject to the reservation of adaptation and additional price claim rights"; otherwise, this may be interpreted as acceptance of the existing price.
• Do not disregard the effect of possession and the title deed annotation. These factors create a strong legal position in favor of the buyer.
• Do not forget the provisions on unjust enrichment. Even where the contract is invalid, the return of the price paid, adjusted to its current value, may come into question.

Conclusion: What Should You Do?

For a seller who wishes to be freed from a real estate promise-of-sale contract because economic conditions have changed, the safest path is not direct termination, but rather a "price adaptation lawsuit" to be filed under TBK Article 138. Withdrawal from the contract should be considered as an option only if it is proven that adaptation is genuinely impossible; even in that case, the buyer's negative damages will need to be compensated. Reaching a price revision through a mutual protocol can often be a far more effective solution than a long and risky litigation process. Conducting the process with the guidance of a real estate law attorney is important for avoiding both loss of time and major compensation risks.