Abstract
This article examines the formation, performance and management of contracts involving foreign businesses in Türkiye. It considers governing law, mandatory rules, authority, formalities, language, standard terms, payment arrangements, liability, termination and dispute resolution. Judicial authorities and the legal sources cited in the manuscript are considered in the context of the particular contractual issue. The analysis treats contract management as a continuing evidentiary and organisational task. A coherent agreement requires both careful drafting and a reliable method for recording performance, giving notices, approving changes and identifying rights that may be lost through inaction.
Keywords contract law, Türkiye, contract management, governing law, contractual authority, commercial disputes
Introduction
A signature does not resolve every question about a contract. The signatory may lack authority, a clause may conflict with mandatory law, or a remedy may depend on a notice that nobody sends. For a foreign business, the task is to connect the commercial agreement with the rules governing its formation, performance and enforcement in Türkiye.
This guide follows that sequence. It addresses the principal private-law rules, selected Court of Cassation decisions and the practical questions to settle with Turkish counsel before signing, during performance and when a relationship ends. Sector-specific transactions require an additional review.
1. The legal framework and the authority to sign
The Turkish Code of Obligations, Law No. 6098, supplies the general contract framework. The Commercial Code, Law No. 6102, adds rules for commercial relationships, including the prudent-merchant standard. The Civil Code, Law No. 4721, governs capacity and good faith. Identifying whether a party acts as a merchant, consumer, employee or representative is therefore part of the analysis, not a matter of terminology.1
Before negotiating the liability cap, confirm who will owe the underlying obligation. Obtain the counterparty’s correct registered name, registration details and evidence of the signatory’s authority. Review any joint-signature requirement, approval or power of attorney. A familiar brand, corporate email address or company stamp should not replace that inquiry. Unauthorised representation has its own rules, including the possible significance of subsequent ratification.2
2. Formation, writing and formal validity
Agreement generally requires corresponding expressions of intention on the essential terms. Turkish law ordinarily permits contracts without a prescribed form, but statutory or agreed formalities can change the result. An oral agreement may be valid while difficult to prove. Emails, orders and performance records should therefore be preserved even where a signed instrument is not a condition of validity.3
Real estate: distinguish the promise from the completed sale
Real estate sales require official form. It is no longer accurate to say that the sale contract can only be made at the Land Registry: Article 61/A of the Notary Law also authorises notarial sales, with registration carried out through the land-registry system. A promise of sale is a different instrument, ordinarily executed in the required official notarial form; it does not itself transfer ownership.4
A privately signed promise should not be assumed to satisfy that formality. Equally, defective form does not mean that payments already made can never be recovered. Contractual validity, restitution and any exceptional argument concerning the exercise of rights must be examined separately. Resolve the required instrument and refund protection before paying a substantial deposit.5
Electronic signing and bilingual documents
A secure electronic signature under Law No. 5070 has a different legal status from a scanned signature or an image inserted into a PDF. Confirm the method, certificate, signatory authority and any special form requirement before arranging remote execution. Electronic convenience does not dispense with an official- form transaction.6
For bilingual contracts, instruct counsel to compare the operative clauses, not merely certify the translation. Define which version is intended to prevail, subject to mandatory requirements, and check whether Turkish- language or translation formalities apply to this transaction. Price, liability, termination and dispute clauses should not express different bargains in the two languages.
3. Freedom of contract and control of standard terms
Freedom of contract operates within legal limits. Article 27 addresses invalidity arising from mandatory rules, public order, morality, personality rights or an impossible subject matter. Its treatment of partial invalidity also matters: a defective provision does not invariably invalidate every remaining obligation. A severability clause is useful drafting, but cannot legalise a prohibited bargain.7
Standard terms require a separate review under Articles 20 to 25. Incorporation, unexpected provisions, interpretation, unilateral amendment and substantive fairness are distinct issues. A signature does not necessarily answer all of them. Nor does a recital that every clause was individually negotiated establish that this actually happened.8
Preserve the negotiation record and identify material departures from the commercial deal. Particular attention should be given to unilateral price changes, automatic renewal, liability exclusions and terms incorporated through external documents. The objective is not simply to make a clause conspicuous. It is to establish an intelligible and legally defensible allocation of risk.
4. Good faith during negotiations
Pre-contractual good faith does not oblige parties to conclude every transaction they discuss. Liability associated with negotiations, often described as culpa in contrahendo, requires an identified breach of a pre- contractual duty and the relevant loss and causal connection. Misleading assurances or the creation of unjustified reliance may matter. Disappointment alone does not establish liability, and expected profits should not be confused with reliance expenditure.9
A letter of intent should distinguish binding obligations from the proposed transaction. Specify the status of confidentiality, exclusivity, costs, approvals and any conditions to signing. When circumstances change, communicate accurately rather than continuing to encourage expenditure on an assumption that is no longer justified. A “non-binding” heading is not a substitute for consistent conduct.
5. The contract type changes the legal review
The general Code of Obligations remains relevant to employment, but special labour legislation may govern the relationship and supply mandatory protections. Residential and roofed workplace leases have a protective regime within the Code itself. Work contracts concern an agreed result, which affects completion and defect analysis. A generic international template should not be used without classifying the relationship first.10
International sales and the CISG
For cross-border sales of goods, assess the United Nations Convention on Contracts for the International Sale of Goods, or CISG. Türkiye is a contracting State. A choice of Turkish law does not, by itself, necessarily exclude the Convention. Counsel should determine whether it applies and whether exclusion or modification is appropriate. Its sales rules do not settle every question of validity or title.11
Agency and distribution
Article 122 of the Commercial Code makes agency goodwill compensation conditional, rather than automatic. The statutory assessment concerns matters including continuing customer benefits, lost remuneration and equity; it also contains exclusions, a ceiling and a one-year assertion period. Extension to specified continuing distribution relationships requires its own analysis. Terminating a long-standing distributorship does not invariably trigger an identical compensation formula.12
At the drafting stage, define territory, exclusivity, customer ownership, performance requirements, stock treatment and the records to be exchanged on exit. These details should remain available when the relationship ends, rather than being reconstructed from sales emails during a dispute.
6. Breach, notices and contractual penalties
The response to breach should begin with the obligation, due date and evidence of non-performance. Performance, damages, rescission and termination are not interchangeable requests. Under the general regime, default and any required additional period for performance must be assessed before electing the remedy. Damages also require examination of loss, causation and the applicable fault rules.13
Do not assume that a commercial reminder is the required legal notice. Article 18(3) of the Commercial Code identifies particular channels for specified default, rescission and termination notices between merchants, including notarial notice and qualifying registered electronic mail. The contract’s notice clause, the statutory rule and proof of delivery should be addressed together.14
A merchant’s penalty exposure requires particular care
Article 182 permits judicial reduction of an excessive contractual penalty under the general rule. Article 22 of the Commercial Code, however, restricts a merchant debtor’s reliance on that reduction. It is therefore misleading to tell every commercial signatory that a judge will simply reduce the figure later. The penalty may also be payable without proof of damage under Article 180, and accepting delayed performance without the necessary reservation can affect a delay-penalty claim under Article 179.15
Distinguish an ordinary reduction argument from a separate challenge to validity under mandatory law. Draft the trigger, calculation period, cap and relationship with performance and damages expressly. The parties should understand the exposure when signing, rather than depend on an assumed judicial discount.
7. Impossibility, hardship and a Court of Cassation ruling
An obligation that becomes impossible without the debtor’s responsibility is not the same as an obligation that has become more expensive. Articles 136 and 137 address impossibility and partial impossibility; Article 138 addresses exceptional hardship under defined conditions. Adaptation is not an automatic response to inflation or exchange-rate movement. The event, allocation of risk, foreseeability, effect on performance and any reservation of rights require evidence.16
Sixth Civil Chamber: a restriction on the permitted building height
In its decision of 16 October 2024, E. 2023/1917, K. 2024/3484, the Sixth Civil Chamber considered a construction-for-land-share contract where the relevant conservation authority permitted fewer floors than the parties had contemplated. On the facts, it found partial impossibility not attributable to the contractor. The reasoning addressed the corresponding release from obligations and the actual allocation of the completed units, and the challenged judgment was reversed.17
The decision is not a general defence to every permit refusal. For project contracts, the practical questions are who undertakes the approval risk, what investigations precede signing, how a reduced lawful scope is handled, and what notice and accounting follow. A force-majeure clause should address those consequences, not merely list events.
8. Currency, interest and the price mechanism
Foreign ownership does not answer every foreign-currency question. Counsel should examine the parties’ residency, the transaction category and any exemption. Communiqué No. 2025-32/72 relaxed payment requirements for sales of movable property other than vehicles in March 2025. It did not remove restrictions across all real estate, employment, service or other contract categories. Distinguish the currency in which an obligation may be denominated from the currency in which payment is permitted.18
The statutory interest framework changed on 31 July 2026. Article 1 of Law No. 3095, as amended by Law No. 7589, links the applicable rate, where interest is payable but no contractual rate is set, to 80 percent of the specified Central Bank rediscount rate, with a conditional mid-year adjustment. Commercial default interest and foreign-currency debts have separate rules. A calculation must identify the applicable statutory regime, any contractual interest provision, the relevant benchmark date and each period for which interest accrues. Checking only the latest Central Bank announcement at the transaction date is insufficient.19
The payment clause should separate principal, tax, expenses and any adjustment mechanism. State the invoice requirements, acceptance conditions, due date and consequences of a genuine dispute over part of the invoice. Agree how changes in scope or price will be authorised and recorded before the work is performed.
9. Foreign law, dispute resolution and enforcement
For a contract with a foreign element, Article 24 of Law No. 5718 generally recognises a qualifying choice of law. That choice remains subject to the relevant conflict rules, overriding mandatory provisions and public policy. Special treatment of matters such as immovables, employment or consumer protection may affect the analysis. Choosing foreign law is not a blanket exemption from Turkish regulation.20
Choice of law is also different from choice of court or arbitration. Before selecting a forum, identify the likely dispute, location of evidence and assets, and prospects for enforcing the eventual decision. An arbitration clause should settle the intended seat, rules, language and appointment mechanism without contradicting the court-jurisdiction provisions elsewhere in the agreement.21
Recognition is not the same as enforcement
A foreign court judgment is not automatically executable in Türkiye. Under Law No. 5718, enforcement is subject to the applicable conditions, including the relevant reciprocity test. Recognition alone is different: Article 58 excludes the reciprocity requirement in Article 54(1)(a). Counsel should identify the relief actually needed and any applicable treaty, rather than use the two procedures interchangeably.22
A qualifying foreign arbitral award can benefit from the New York Convention, subject to Türkiye’s commercial and reciprocity reservations. That is a treaty framework, not a promise of automatic or invariably quicker recovery. The arbitration agreement, procedure, award and applicable grounds for refusal still require scrutiny.23
Before commencing court proceedings, check whether pre-action mediation is a condition for the particular claim. Article 5/A of the Commercial Code and separate statutory regimes make the classification of the dispute important. A demand letter, contractual negotiation period and statutory mediation process should not be treated as the same step.24
10. Contract management after signing and after termination
The executed contract should become a working record. Assign responsibility for deliverables, inspection, acceptance, invoices, price adjustments, renewal, notices, security and the retention of evidence. Record deadlines against their actual trigger, such as delivery or receipt of notice, not simply against the date of signature. Defect notifications and limitation periods may follow different rules.25
Maintain a single authoritative set of the agreement, schedules, amendments and approvals. Record departures from the agreed performance and obtain legal advice before accepting a substitute, waiving a condition or releasing security. A useful management calendar identifies both the person responsible and the evidence needed to show that the step was completed.
General Assembly of Civil Chambers: equipment left after termination
In its decision of 24 November 2020, E. 2017/493, K. 2020/932, the General Assembly considered equipment left at a site after a contract ended. The owner had requested collection and sought permission to sell because of the storage burden. The Court required examination of the statutory conditions under Article 108, rather than dismissal for lack of legal interest. It did not authorise unilateral disposal.26
The lesson is that exit obligations need their own process. Prepare an inventory, record possession and condition, send appropriate notices and assess any required court permission. Termination should also address outstanding accounts, documents, confidential information and security. Ending future performance does not necessarily conclude every obligation between the parties.
11. Choosing and instructing a contract lawyer in Türkiye
A foreign client should identify the lawyer personally responsible for the advice, verify professional registration and request a conflict check. An introduction by a broker, seller or local partner does not settle whose interests counsel represents. The engagement should name the client and define the work, not merely promise “full legal support”.
Distinguish drafting from negotiation, execution assistance, continuing contract management and dispute representation. Agree whether the mandate covers corporate authority, mandatory-law review, bilingual consistency, payment protections and enforcement planning. Establish who is responsible for foreign-law advice, technical investigations and tax treatment where those matters fall outside the engagement.
Request a written fee arrangement separating professional fees from official charges, translation, experts and litigation expenses. Confirm reporting in the agreed language, secure document exchange and any power of attorney needed for representation. Remote advice and authority to sign or conduct proceedings are different services.
For the first review, provide the commercial objective, full draft and annexes, existing agreements, counterparties’ details, proposed signatories, relevant correspondence, payment history and any approaching deadline. Ask for a prioritised issues report that explains which changes are essential, which risks can be priced or insured, and which points require a commercial decision.
Frequently asked questions
Does every Turkish-law contract need to be written?
No. Many contracts are form-free, but statutory or agreed formalities can determine validity. Evidence is a separate issue. Property-related instruments and other specially regulated transactions require particular care. See section 2.
Can an agreement be signed electronically from abroad?
Potentially, but the signing method, certificate, authority and transaction must be checked. A scanned signature is not automatically a secure electronic signature under Turkish law, and electronic signing does not remove an official-form requirement. See section 2.
Can walking away from negotiations create liability?
It can where the requirements for pre-contractual liability are established. A failed negotiation alone is not enough. Review the assurances, binding preliminary obligations, reliance and resulting loss. See section 4.
Will a court reduce a penalty because it is high?
Not necessarily. The general reduction rule must be read with the merchant-debtor restriction in Article 22 of the Commercial Code. Do not sign on the assumption that litigation will automatically produce a lower figure. See section 6.
Does inflation or a currency movement automatically excuse performance?
No. Hardship and impossibility are different legal tests. The contract’s risk allocation, evidence and the statutory conditions determine the available argument and remedy. See section 7.
Can the price always be agreed and paid in foreign currency?
No universal answer applies. Residency, contract category and exemptions must be checked. The 2025 relaxation for specified movable sales should not be extended to unrelated categories. See section 8.
Can foreign parties choose foreign law and arbitration?
Often they can make appropriate choices, but law, forum, arbitrability and enforcement require separate analysis. Mandatory provisions and protected contract categories may limit the effect of the drafting. See section 9.
Is a foreign judgment or arbitral award automatically enforceable?
No. Determine the applicable recognition or enforcement route and its conditions. Recognition alone has a different reciprocity position from judgment enforcement, and the New York Convention does not guarantee recovery. See section 9.
What should happen immediately after the contract is signed?
Keep the authoritative executed version and complete schedules, assign responsibility for obligations, record deadlines and evidence, and agree an escalation process. Repeat the exercise when the contract is amended or terminated. See section 10.
What should a foreign client ask the lawyer to deliver?
A defined scope, written risk assessment, proposed amendments, execution plan and an explanation of exclusions and costs. Ongoing monitoring and litigation should be agreed separately where required. See section 11.
Conclusion
A well-managed contract connects the bargain to the way the business will perform it and the way a court or tribunal may later examine it. The strongest protection is not the most severe clause on the page. It is a coherent agreement, signed with proper authority, supported by usable evidence and administered without losing rights through avoidable omissions.
Footnotes
1. Turkish Code of Obligations No. 6098 (TBK); Turkish Commercial Code No. 6102 (TTK), Article 18(2); Turkish Civil Code No. 4721 (TMK), Articles 2 and 9 to 16. The parliamentary links are enactment texts; specific later changes are separately cited. Official-source review: 10 September 2026. TBK; TTK; TMK.
2. TBK, Articles 40 to 48, on representation and unauthorised representation. Corporate authority also requires examination of the applicable company rules and current registry documents. TBK.
3. TBK, Articles 1, 2, 12 to 17 and 19, on agreement, form, agreed form and interpretation. Validity and proof require separate analysis. TBK.
4. TBK, Article 237; Notary Law No. 1512, Articles 60(3) and 61/A, as amended or inserted by Law No. 7413, Articles 11 and 12. Notarial sales and land-registry registration are distinct statutory steps. TBK; Law No. 7413.
5. TBK, Articles 27 and 77 to 82, on invalidity and unjust enrichment. Restitution and any exceptional abuse-of-right argument require individual assessment. TBK.
6. Electronic Signature Law No. 5070; BTK, “Electronic Signature General Information”, updated 16 January 2026. Secure-signature status does not remove transaction-specific official-form requirements. BTK official guidance.
7. TBK, Articles 26 and 27, including the rule on partial invalidity and its exception. TBK.
8. TBK, Articles 20 to 25, on standard terms. Article 20 addresses recitals asserting that each provision was individually discussed. TBK.
9. TMK, Article 2. The discussion of culpa in contrahendo is doctrinal analysis of pre-contractual good faith, not a claim that unsuccessful negotiations alone establish liability. TMK.
10. TBK, Articles 299 and following, 339 and following, 393 and following, and 470 and following. Special labour, consumer and sectoral legislation requires separate assessment. TBK.
11. United Nations, Audiovisual Library of International Law, “United Nations Convention on Contracts for the International Sale of Goods”, discussion of Articles 1, 4 and 6; UNCITRAL, official treaty-status record for Türkiye. UN legal analysis; Treaty status.
12. TTK, Article 122(1) to (5), including conditions, ceiling, exclusions, the one-year assertion period and the qualified extension to specified continuing relationships. TTK.
13. TBK, Articles 112, 117 and 123 to 125. Contract-specific remedies and special statutory regimes may supplement the general rules. TBK.
14. TTK, Article 18(3), on specified notices between merchants; TBK, Article 117, on default. TTK; TBK.
15. TBK, Articles 179 to 182; TTK, Article 22. The merchant-debtor restriction, the absence of a damage prerequisite and the consequences of unreserved acceptance are separate issues. TBK; TTK.
16. TBK, Articles 136 to 138. Judicial adaptation for hardship requires the statutory extraordinary-change and performance or reservation conditions. TBK.
17. Court of Cassation, Sixth Civil Chamber, 16 October 2024, E. 2023/1917, K. 2024/3484, official full judgment, particularly its application of the rules to the building-height restriction. Official full judgment.
18. Ministry of Treasury and Finance, Directorate General of Financial Markets and Foreign Exchange, announcement of 7 March 2025 concerning Communiqué No. 2025-32/72, published on 6 March 2025. The announcement distinguishes non-vehicle movable sales from other restricted contract categories. Source rechecked 11 September 2026. Ministry announcement.
19. Law No. 3095, Articles 1, 2 and 4/a; Law No. 7589, Articles 10 and 26(1)(c), effective 31 July 2026. Article 1 uses the previous 31 December rediscount benchmark, with a conditional 30 June adjustment. Article 2 addresses commercial default interest; Article 4/a uses a separate foreign-currency deposit benchmark. Sources rechecked 11 September 2026. Current Law No. 3095; Amending law.
20. International Private and Procedural Law No. 5718 (MÖHUK), Articles 1, 5, 6, 24 to 27 and 31. Specific protected contracts and current amendments require separate examination. MÖHUK.
21. MÖHUK, Articles 40 to 47. The choice of substantive law must be distinguished from jurisdiction, exclusive jurisdiction and the arbitration agreement. MÖHUK.
22. MÖHUK, Articles 50 to 59, particularly Articles 54 and 58. For recognition alone, Article 58 excludes the reciprocity requirement in Article 54(1)(a). MÖHUK.
23. 1958 New York Convention; UN Treaty Collection, official status and Türkiye’s commercial and reciprocity reservations. See also MÖHUK, Articles 1 and 60 to 63. UN treaty record; MÖHUK.
24. TTK, Article 5/A, as amended by Law No. 7445, Article 31; Ministry of Justice, Department of Mediation, official frequently asked questions. Law No. 7445; Official mediation guidance.
25. TBK, Articles 13, 146, 147, 179 and 223; TTK, Article 23. Amendment formalities, prescription, penalty rights and defect notification require distinct checks. TBK; TTK.
26. Court of Cassation, General Assembly of Civil Chambers, 24 November 2020, E. 2017/493, K. 2020/932, paragraphs 23 to 27, on examination of the TBK Article 108 sale-permission conditions. Official full judgment.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
