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 (TBK), 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 (TTK) applies as the special law and modifies certain rules. The two codes are read together. This page stays with the contract itself; the wider framework of the Turkish Commercial Code (merchant status, company formation, governance and commercial disputes) is set out on our commercial law page.
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The foundation of the system is freedom of contract under TBK Art. 26: the parties are free to determine the content of their agreement within the limits set by law. That freedom is broad, but under TBK Art. 27 a contract contrary to mandatory rules, morality, public order (Kamu Düzeni) or personal rights is void. 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:
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| 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. The agency rules can still reach them: TCC Art. 122(5) extends the agency goodwill indemnity to exclusive dealership and similar continuing relationships, unless that would be inequitable, 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.
Contracts in the healthcare sector meet statutory insurance duties the parties cannot reallocate between themselves; the two compulsory insurances in Turkish healthcare sets out which obligation falls on the facility and which on the physician. The same is true of the agreement between a clinic and the agency that refers patients to it, examined in the legal position of health tourism intermediaries.
The clauses that decide disputes
Most contract disputes turn on a handful of clauses. These are the ones we give the closest attention.
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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; the parties are free to set the amount (Art. 182/1). They are a powerful tool, but the judge reduces of its own motion a penalty it finds excessive (TCO Art. 182/3). A debtor who is a merchant cannot ask the court for that reduction (TCC Art. 22), so a merchant debtor should not count on the court reducing it; 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 the debtor to ask the court to adapt the contract, or failing that to withdraw (in contracts of continuing performance, as a rule, to terminate), where an extraordinary change, unforeseen and not caused by the debtor, makes demanding performance contrary to good faith, provided the debtor has not yet performed or has performed while reserving these rights. The article also applies to foreign-currency debts.
Limitation of liability. Liability may be allocated and capped, but TCO Art. 115 makes void any advance agreement excluding liability for gross fault, and in licensed professions requiring expertise even for slight fault. Exclusion and cap clauses must be drafted within that limit.
Standard terms. Where one side presents a template prepared in advance for use in many similar contracts, TCO Arts. 20-25 on general terms and conditions apply. A term against the other party’s interest becomes part of the contract only if that party was expressly informed of it, given the chance to learn its content and accepted it (Art. 21); an unclear term is read against the drafter (Art. 23); a clause giving the drafter a unilateral right to amend the terms to the other party’s detriment is deemed unwritten (Art. 24); and a term contrary to good faith that works against the other party cannot be included (Art. 25).
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 choose the law governing their contractual obligations under Art. 24 of the Act on Private International and Procedural Law No. 5718 (PILA), expressly or in a way clearly evident from the contract, for all or part of it, and may change that choice at any time; absent a choice, the law most closely connected applies, generally that of the characteristic performer’s place of business. They may also agree to resolve disputes by arbitration. That choice is real, but it is not unlimited: Turkish rules of direct application continue to apply regardless of the law the parties select (PILA Art. 6), a foreign provision manifestly contrary to Turkish public order is not applied (PILA Art. 5), 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 is a risk to the party that agrees to it: TCO Art. 182/3 lets the judge reduce an excessive penalty, but under TCC Art. 22 a debtor who is a merchant cannot ask the court for that reduction, so a merchant debtor should not count on the court cutting it. And the limitation period matters: the general period is ten years under TCO Art. 146, but claims listed in TCO Art. 147, including those under agency and commission contracts, run out in five, so a delay in acting can be decisive. A far shorter clock runs first in a sale between merchants: under TCC Art. 23(1)(c) the buyer must notify an apparent defect within two days and, for a defect not apparent, inspect and notify within eight days of delivery, and where the CISG governs the sale the standard changes again; the two regimes are compared in notice of defect in commercial sales. One further trap catches foreign-owned groups in particular: the price cannot always be agreed in a foreign currency, because Decree No. 32 looks to legal domicile rather than to who owns the company; the test, and the narrow carve-outs, are set out in is a foreign-owned Turkish company a resident under Decree No. 32.
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There is also the question of what happens when a distribution or agency relationship ends. On termination of an agency, the TCC Art. 122 goodwill (equalisation) indemnity may entitle the agent to a payment for the customer base it built up, capped at the average annual commission of the last five years; it cannot be waived in advance, must be claimed within one year of termination, and under Art. 122(5) also applies to exclusive dealership and similar relationships unless inequitable. This is a significant exposure that should be considered at the drafting stage; we address it in detail in a separate article.
Payment timing is a mandatory-law question as much as a commercial one. TCC Art. 1530(5) limits the contractual payment term in supply of goods and services between commercial enterprises to sixty days; a longer term may be expressly agreed only if it is not grossly unfair to the creditor, and never where the creditor is an SME or agricultural producer or the debtor is a large enterprise; the fifth to seventh paragraphs of that article, and the point at which default and interest begin without any notice, are read together in when a 120-day payment term is void.
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.
Related Practice Areas & Strategic Legal Guides
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- Corporate Shareholder Disputes & Joint Ventures: Minority protections (TCC 411), General Assembly annulment (TCC 445), and board liability (TCC 553).
- Company & Business Formation: Setting up Turkish Joint Stock (A.Ş.) and Limited (Ltd. Şti.) companies for foreign investors.
- Mergers & Acquisitions (M&A): Cross-border due diligence, SPA drafting, and Competition Authority merger filings.
- Legal Matters in Istanbul for Foreign Clients and Companies: Bilingual corporate governance, MERSİS compliance, and commercial court representation.
