Article 764 of the Turkish Civil Code makes the reservation valid only where the sale is drawn up as a notarial deed and entered in the special register at the notary of the buyer's domicile — and where that entry is missing, the sale is treated as an outright sale.
The retention of title clause in a foreign supplier’s standard terms is, in Türkiye, almost always worthless. Article 764 of the Turkish Civil Code No. 4721 provides that a reservation of ownership over goods transferred to another “is valid only where a contract made in official form is entered in the special register at the notary of the transferee’s domicile.” Two conditions, both mandatory, neither of which a printed clause, an order confirmation or a foreign-law framework agreement can satisfy.
That matters because of what follows when the register entry is missing. The reservation is not valid, so the general rule of Article 763 applies: ownership of a movable passes with the transfer of possession. The buyer becomes owner on delivery, and the goods sit in its attachable estate like everything else it owns. The supplier is left with a contractual claim for the price and no claim to the goods.
What Article 764 actually requires of a retention of title
The provision is short, and its second sentence carries an exception worth noting: no reservation of ownership may be agreed in sales of animals. For everything else, the two requirements operate together.
The first is official form. Article 89 of the Notaries Act No. 1512 lists “sale with a reservation of ownership” among the transactions that must be executed as a notarial deed drawn up by the notary (düzenleme şeklinde). This is the heavier of the two notarial procedures. Simple certification of the parties’ signatures on a document they brought with them — the procedure most cross-border supply paperwork goes through, if it goes through a notary at all — is a different thing and does not meet the requirement.
The second is registration in the special register at the notary of the buyer’s domicile. Not the seller’s notary, not any notary, and not a general commercial register. The wording makes the two conditions cumulative: the contract must be made in official form and entered in the special register of the notary of the buyer’s domicile, and only then is the reservation valid. Nothing in Article 764 makes an unregistered clause effective even between the parties.
This is why the clause fails so reliably. A supplier who ships machinery to Türkiye under an English-law framework agreement, with an ownership reservation in clause 14, has satisfied neither condition. Nothing about the sophistication of the drafting changes the outcome; Article 764 is not asking about drafting.
| Instrument | Official notarial deed? | Entry in the Art. 764 special register? | Effect against the buyer's creditors |
|---|---|---|---|
| Retention of title in general terms and conditions | No | No | None; the reservation is invalid and ownership passes on delivery (Art. 763) |
| Signed bilateral supply agreement with a title clause | No | No | None on the goods; contractual price claim only |
| Reservation valid under the exporter's own law | Not in Türkiye | No | Assessed by a Turkish court under Turkish property law |
| Notarial deed of sale with reservation, registered under Art. 764 | Yes | Yes | Valid reservation, but subject to the default and rescission conditions below |
| Registered non-possessory pledge (Law No. 6750) | Notarised signatures or signature before the registry officer | Pledged Movable Registry | Pledge created on registration; ranking by priority |
| Registered financial lease (Law No. 6361) | Written or remote form | Registry kept by the sector association | Third-party rights in rem cannot be raised against the lessor |
Why foreign law does not travel with the goods
Suppliers frequently answer that their reservation was validly created at home. Turkish private international law separates the two questions. Article 24 of the International Private and Procedural Law No. 5718 gives effect to an express choice of law for the contractual obligations, so the supply agreement itself may well be governed by German, Dutch or English law. Article 21 of the same statute deals with property: ownership and other rights in rem are governed by the law of the country where the goods are located at the time of the transaction; goods in transit are governed by the law of the place of arrival; and where goods change location, rights not yet acquired are governed by the law of the country where the goods last come to rest.
The practical consequence is unglamorous. When the buyer’s bank attaches a consignment in a warehouse outside İzmir, the dispute is heard by a Turkish enforcement court, which asks a Turkish property-law question and looks for a Turkish register entry. Choice of law in the supply contract does not change the forum’s approach to the goods, which is why title arrangements have to be built into the transaction structure alongside the customs and import planning covered in our guide to importing goods into Türkiye — not left to the governing-law clause.
What happens when the buyer’s creditors attach the goods
Assume the reservation was properly registered. The supplier now has to assert it, and the route is the third-party claim (istihkak) machinery in the Enforcement and Bankruptcy Law No. 2004.
That machinery is set out in full in our note on the third-party ownership claim over seized goods; the points that bear on a reservation of ownership are these. Article 96 applies where the goods are found in the debtor’s hands: the enforcement office records the claim, gives the creditor and debtor three days to object, and a third party who learns of the attachment has seven days to raise the claim in that proceeding or lose the right to raise it there at all. Article 99 covers the reverse situation, where the goods are held by the third party — there, the enforcement officer gives the creditor seven days to bring the claim, and if it does not, the third party’s assertion is deemed accepted. In bankruptcy, Article 228 puts the first decision in the hands of the bankruptcy administration, which if it rejects the claim gives the third party seven days to sue.
The hard part is Article 97/a: a person holding a movable is presumed to be its owner, and the third-party claimant must show how it acquired the goods and what legal and factual reasons put them in the debtor’s hands. A registered notarial deed identifying the goods is exactly the evidence that discharges that burden. A clause in an invoice is not.
Then comes the trap that surprises even suppliers who did register. The statute links the seller’s right to take the goods back to the instalment-sale rules discussed in the next section: the buyer must be in default, and the seller must have expressly reserved and exercised its right to rescind (TCO Art. 259/2). The reservation, in other words, secures payment; it does not guarantee the return of the machine.
The instalment-sale overlay, and what drops away between traders
Article 765 of the Civil Code allows a seller of goods on instalments to demand the return of the goods on the strength of a reservation of ownership — but only “subject to compliance with the special provisions applicable to such sales.” Those provisions sit in Articles 253 to 263 of the Turkish Code of Obligations No. 6098, and Article 253 expressly contemplates the reservation: where the goods are sold in the course of the seller’s commercial activity, the contract must state, among other things, any agreed terms on reservation of ownership.
For a B2B supply, however, most of that chapter falls away. Article 263/4 provides that where the buyer acts as a merchant, or the goods are bought for the needs of a commercial enterprise or for professional purposes, only Article 259/2, Article 260/1 and Article 261 apply.
| Provision | What it does | Applies to a merchant buyer? |
|---|---|---|
| TCO Art. 253 | Written form and mandatory contract content, including any reservation of ownership | Content list applies where the seller sells commercially; the merchant carve-out in Art. 263/4 limits the rest of the chapter |
| TCO Art. 259/2 | Seller may claim the whole balance or rescind, but only if that right was expressly reserved and the buyer defaulted on a qualifying instalment; and not where the amount claimable on rescission equals or exceeds the instalments already paid | Yes |
| TCO Art. 260/1 | On rescission after delivery each side restores what it received; the seller may claim an equitable use fee and damages for abnormal wear, but never more than performance would have yielded | Yes |
| TCO Art. 261 | The judge may grant the defaulting buyer payment facilities and prohibit the seller from taking the goods back | Yes |
| TCO Art. 262 | A buyer domiciled in Türkiye cannot waive the jurisdiction of its home court in advance, nor conclude an arbitration agreement | No — excluded by Art. 263/4 |
Article 259/2 deserves a second reading because of the sentence that closes it: the seller cannot rescind where the amount it could claim by reason of rescission equals or exceeds the instalments already paid. A supplier that has collected most of the price has, by that fact, lost the right to take the machine back. Article 261 adds the judicial discretion described above. These are the provisions that survive into the commercial setting, and they are the ones that shape a realistic recovery strategy in commercial litigation and arbitration.
When the goods stop being your goods
A reservation attaches to a specific thing, and Turkish property law is unsentimental about what happens when that thing changes. Article 684 of the Civil Code gives the owner of a thing ownership of its integral parts, an integral part being a component that cannot be separated without destroying, damaging or altering the principal thing. A reserved motor bolted into a production line may become an integral part of it. Article 775 gives a new thing created by processing to the processor where the value of the labour exceeds the value of the material — though where the processor is not in good faith the judge may leave the new thing with the owner even then. Article 776 gives co-ownership in proportion to value where movables are mixed or combined inseparably — and where one movable becomes a secondary integral part of another, the whole belongs to the owner of the principal part.
For raw materials, components, consumables and anything that goes into a production process, this is decisive. Even a perfectly registered reservation over a batch of resin does not follow the resin into the moulded parts. Article 763 adds the further exposure that a person who takes possession of a movable in good faith and as owner may acquire it under the possession rules even where the transferor had no authority to transfer, and Article 777 allows acquisitive prescription over a movable after five years of uninterrupted, unchallenged, good-faith possession as owner.
The alternatives to retention of title that do bind third parties
The workable answers are the registered ones, and they belong in the supply documentation from the outset rather than in a boilerplate annex, which is where the commercial contracts analysis has to start for a cross-border supply arrangement.
The non-possessory movable pledge under the Movable Pledge in Commercial Transactions Act No. 6750 was built for this problem. Article 3 allows a pledge agreement between credit institutions and traders, and between traders themselves. Article 4 provides that the pledge is created by registration in the Pledged Movable Registry, requires notarised signatures or signature before a registry officer for a written agreement, and requires the asset to be identified by serial, chassis or model number where it has distinguishing features; Article 4/7 renders void any term restricting the pledgor’s power of disposal. Article 5 covers machinery and equipment, raw materials, consumables, stock, and both existing and future receivables. Article 7 extends the pledge to natural produce and substitute goods, and its third paragraph preserves the good faith of a third party who did not know and could not be expected to know of the pledge. Article 14 gives a first-ranking creditor the right to ask the enforcement office to transfer ownership of the pledged movable under Article 24 of the Enforcement and Bankruptcy Law. Whether a supplier established outside Türkiye can itself register should be confirmed with the registry before the structure is committed to.
The financial lease under the Financial Leasing, Factoring and Financing Companies Act No. 6361 is the other registered route. Article 22 requires registration — in the asset’s own register where it has one, otherwise in the special register kept by the sector association, which is open to the public and which no one may claim not to have known. Its fifth paragraph is the operative sentence: after registration or annotation, rights in rem acquired by third parties over the leased asset cannot be asserted against the lessor. That is the protection retention of title is imagined to give and, unregistered, does not.
Everything else is credit management rather than property law: advance payment, a bank guarantee, a documentary credit, or shorter payment terms priced into the goods. For a supplier selling into Türkiye for the first time, the honest sequence is to decide which of these is being used before the first container leaves, because the reservation clause in the standard terms is not doing the job it appears to be doing. How that decision interacts with distribution structures, agency arrangements and the wider framework is dealt with in our commercial law overview.
