Commercial contracts are the framework on which a trading relationship stands or falls. A well-drafted agreement records not only what the parties intend when things go well, but how risk is allocated when they do not: late delivery, non-payment, a market that shifts, a partner that wants out. Our work on commercial contracts covers the full cycle of drafting, review and negotiation, whether we are preparing a first draft for a client, marking up a counterparty’s template, or advising on a single clause that carries disproportionate exposure.
The legal framework
General contract law in Türkiye is set out in the Turkish Code of Obligations No. 6098 (TCO), which governs how contracts are formed, performed and enforced, and what remedies follow a breach. Where the transaction is a commercial one, or the parties are merchants, the Turkish Commercial Code No. 6102 (TCC) applies as the special law and modifies certain rules. The two codes are read together.
The foundation of the system is freedom of contract under TCO Art. 26: the parties are free to determine the content of their agreement. That freedom is broad, but it is bounded by mandatory rules, public order, morality and personal-rights protections. Much of the craft of contract drafting lies in knowing where that boundary sits, so that a clause the parties rely on is not struck down when it matters most.
Which contracts we prepare
Commercial practice runs on a familiar set of agreements, some named in legislation and some not:
| Contract type | Legal character | Governing rules |
|---|---|---|
| Distribution / exclusive dealership | Innominate (unregulated) | Freedom of contract; agency rules applied by analogy |
| Agency | Named contract | TCC Arts. 102-123 |
| Franchise | Innominate (unregulated) | Freedom of contract; general TCO principles |
| Supply | Framework / continuing | TCO; TCC for commercial sale |
| Sale | Named contract | TCO Arts. 207 et seq.; commercial sale under the TCC |
| Non-disclosure (NDA) | Innominate | Freedom of contract; general TCO principles |
Agency is the one clearly regulated type in this list, governed by TCC Arts. 102-123. Distribution and franchise agreements, by contrast, are innominate contracts: they have no dedicated statutory chapter, and their content is built from freedom of contract and general principles. Where a distribution arrangement functions much like an agency, courts may reach for the agency provisions by analogy, which makes precise drafting essential. Supply arrangements are often structured as framework contracts governing a stream of individual orders, and sale is governed by TCO Arts. 207 et seq., with the commercial-sale rules of the TCC layered on top where the parties are merchants.
The clauses that decide disputes
Most contract disputes turn on a handful of clauses. These are the ones we give the closest attention.
Termination. Clear grounds and notice mechanics for both ordinary and extraordinary termination, so that ending the relationship does not itself become the dispute.
Penalty clauses. Permitted under TCO Arts. 179-182. They are a powerful tool, but a manifestly excessive penalty may be reduced by the judge under TCO Art. 182/3. Between merchants the scope for reduction is narrower, yet the figure should still reflect a realistic estimate of loss.
Force majeure and hardship. A force majeure clause deals with events that make performance impossible. Distinct from it is excessive difficulty of performance (hardship) under TCO Art. 138, which allows a party to ask the court to adapt the contract, or failing that to withdraw, where an extraordinary and unforeseen change makes performance grossly onerous.
Limitation of liability. Liability may be allocated and capped, but TCO Art. 115 makes void any clause that purports to exclude liability for gross fault or intent. Exclusion and cap clauses must be drafted within that limit.
Retention of title. Reserving ownership until full payment is a practical protection in supply and sale, and needs to be recorded correctly to be effective.
Dispute resolution. The choice of forum, whether the Turkish commercial courts or arbitration, and the governing law, shapes everything that follows.
A penalty clause, an exclusion clause and a hardship clause are not boilerplate. They are precisely where Turkish law imposes its own limits, and precisely where a poorly drafted agreement fails under pressure.
Governing law and jurisdiction
In contracts with a foreign element, the parties may generally choose the governing law and may agree to resolve disputes by arbitration, under the Act on Private International and Procedural Law No. 5718 (PILA). That choice is real, but it is not unlimited: mandatory Turkish rules continue to apply regardless of the law the parties select, and a foreign judgment or award must still meet Turkish recognition and enforcement conditions to have effect here. In purely domestic contracts between Turkish parties, Turkish law governs and its mandatory provisions cannot be displaced.
Pitfalls for foreign parties
Foreign counterparties frequently arrive with a template drafted for another legal system, and the friction shows up in predictable places. A choice-of-law clause selecting a foreign law does not switch off Türkiye’s mandatory rules. A liability waiver that would pass elsewhere may collide with TCO Art. 115. A penalty figure set very high for deterrence may be exposed to judicial reduction under TCO Art. 182/3. And the limitation period matters: the general period is ten years under TCO Art. 146, but certain commercial claims run out in five, so a delay in acting can be decisive.
There is also the question of what happens when a distribution or agency relationship ends. On termination of an agency, and in some cases distribution, the TCC Art. 122 goodwill (equalisation) indemnity may entitle the terminated party to a payment for the customer base it built up. This is a significant exposure that should be considered at the drafting stage; we address it in detail in a separate article.
Our approach
We treat a contract as a working tool, not a formality. That means starting from the commercial purpose of the deal, identifying which mandatory Turkish rules constrain the drafting, and writing clauses that remain enforceable under Turkish law rather than clauses that merely look reassuring. For international clients we translate a foreign template into an agreement that works in Türkiye, and we flag the points, penalty, liability, hardship, governing law and termination indemnity, where the two systems diverge. Whether the mandate is a single review or the negotiation of a long-term supply or distribution framework, the aim is the same: an agreement that is clear, balanced and capable of surviving a dispute.
How a contract mandate proceeds
- 01
Understand the commercial purpose
We start from the deal itself: the parties, the goods or services, volumes, term and the risks each side is truly worried about, so the drafting follows the commercial reality rather than a template.
- 02
Map the applicable rules
We identify whether the contract is a named type such as agency or an innominate one such as distribution or franchise, and which mandatory Turkish provisions cannot be contracted away.
- 03
Draft or mark up the text
We prepare a first draft or review the counterparty's version, flagging clauses on termination, penalty, force majeure, hardship, liability and dispute resolution.
- 04
Negotiate the critical clauses
We support the negotiation with fallback positions on the points that carry the most exposure, keeping the language enforceable under Turkish law.
- 05
Finalise and record execution
We settle the signature formalities, annexes and language versions so that the contract is coherent and, where a foreign party is involved, workable across jurisdictions.
Frequently asked questions
Which law governs commercial contracts in Türkiye?
General contract law is set out in the Turkish Code of Obligations No. 6098 (TCO), which covers formation, performance, breach and remedies. When both parties are merchants or the transaction is a commercial one, the Turkish Commercial Code No. 6102 (TCC) applies alongside the TCO and modifies certain rules, for example on default interest and notices. The two codes are read together, with the TCC as the special law for commercial matters.
Are distribution and franchise agreements regulated by a specific statute?
No. Distribution (exclusive dealership) and franchise agreements are innominate contracts with no dedicated chapter in Turkish legislation. Their content is shaped by freedom of contract and by general TCO principles. Where a distribution relationship resembles agency, courts may apply the agency provisions of the TCC (Arts. 102-123) by analogy, which is why the drafting of these agreements deserves particular care.
Can we agree a penalty clause, and will it be enforced?
Yes. Penalty (liquidated damages) clauses are permitted under TCO Arts. 179-182 and are common in commercial contracts. However, a penalty that is manifestly excessive may be reduced by the judge under TCO Art. 182/3. Between merchants the room for reduction is narrower, but the clause should still be calibrated to a realistic estimate of loss so that it remains defensible.
Can a party exclude its liability in the contract?
Liability may be limited to a degree, but not without limits. Under TCO Art. 115 an agreement purporting to exclude liability for gross fault or intent is void. Clauses that cap or allocate liability for ordinary negligence are generally valid, subject to the specific wording and the nature of the obligation, so exclusion and limitation clauses must be drafted with these boundaries in mind.
May the parties choose a foreign law or arbitration?
In contracts with a foreign element the parties may generally choose the governing law and may agree to arbitration under the Act on Private International and Procedural Law No. 5718 (PILA). That choice does not, however, override mandatory Turkish rules that apply regardless of the chosen law. In purely domestic contracts between Turkish parties, Turkish law and its mandatory provisions govern.
How long do we have to bring a claim?
The general limitation period under TCO Art. 146 is ten years from the date the claim becomes due. Certain claims carry a shorter period; some commercial and periodic claims are subject to a five-year period. Because the applicable period depends on the type of obligation, it is worth confirming the deadline for each specific claim rather than assuming the general rule applies.