According to the duration of performance, obligations are classified as instantaneous, continuous, and periodic. This classification is significant because it affects how the contractual relationship is terminated and the related legal consequences.
For an obligation with instantaneous performance, the general rule is rescission. Rescission has a retroactive effect, meaning it nullifies the contract as if it never existed. In contrast, for continuous obligations, termination applies and produces effects going forward.
The classification of a construction contract in return for land share based on performance duration is controversial. Therefore, the decision of the Grand General Assembly of the Court of Cassation for the Unification of Judgments, 1983/3 CN., 1984/1 DN., and 25.01.1984 D., is highly significant. The decision states that a construction contract in return for land share has a mixed nature, combining elements of both instantaneous and continuous obligations. It also notes that, as a rule, if the employer terminates the contract due to default, the termination has a retroactive effect. However, if the nature of the case and specific circumstances justify it, the termination may only have a prospective effect. The phrase in the full text, “if the portion of the construction completed by the defaulting contractor reaches a certain extent,” is crucial to determining whether the termination will be retroactive or prospective.
In its decision, 2017/866 CN., 2021/724 DN., and 08.06.2021 D., the Civil General Assembly of the Court of Cassation stated: “… for the contractor to benefit from the prospective effects of termination, the construction must be at least 90% completed. The consistent practice of the Court of Cassation is also in this direction.” In this context, for the termination of a construction contract in return for land share to be valid, the construction must be more than 90% complete.
A court decision is necessary to terminate a construction contract in return for land. In this regard, the Civil General Assembly of the Court of Cassation, in its decision, 2017/2273 CN, 2021/1301 DN., and 02.11.2021 D., stated: “Since a construction contract in return for land share involves the transfer of ownership or ownership share of a registered immovable property, it cannot be unilaterally terminated without the other party’s consent; such termination requires a judicial decision.”
Although it is theoretically possible to terminate a construction contract in exchange for land, in practice, based on the consistent case law of the Grand General Assembly of the Court of Cassation for the Unification of Judgments, the Civil General Assembly, and the Civil Chambers, it is quite difficult to find grounds for termination.
