CONTRACT LAW IN TURKEY: DRAFTING, VALIDITY, TERMINATION AND INTERNATIONAL CONTRACTS

IS IT IMPORTANT TO ENTER INTO A CONTRACT?

Entering into a contract is one of the most important legal transactions that clearly and unambiguously defines the scope of the legal relationship, the rights and obligations of the parties, their liabilities, responsibilities, and the rules applicable in the event of a dispute. A contract prepared in accordance with contract law in Turkey is not merely a document reflecting the parties’ mutual intentions; it also serves as an important legal safeguard and legal evidence protecting the parties’ rights in the event of future disputes. For this reason, a contract that is lawfully, comprehensively, and professionally drafted is of great importance in preventing future legal and financial risks.

Although the Turkish Code of Obligations adopts the principle of freedom of contract, if the parties express their intentions through a contract containing incomplete, ambiguous, or unlawful provisions, this may result in serious loss of legal rights, financial losses, and lengthy legal disputes. In particular, the failure to clearly regulate matters such as the subject matter of the contract, the rights and obligations of the parties, payment terms, delivery and performance procedures, default provisions, penalty clauses, termination conditions, force majeure provisions, confidentiality obligations, the dispute resolution method, and the competent court may give rise to significant legal disputes in the future.

One of the most significant advantages of entering into a contract is that it clearly defines the parties’ mutual expectations, rights, and obligations. Setting out rights and obligations in writing minimizes differences in interpretation, eliminates uncertainties, and strengthens the relationship of trust between the parties. Consequently, the contract becomes one of the most important written pieces of evidence to be evaluated by the courts in the event of a dispute.

In addition, a properly drafted contract encourages the parties to perform their obligations on time, completely, and duly. Since the circumstances under which the parties will be held liable, the situations in which they will be considered in default, the conditions under which the contract will terminate, and the sanctions applicable in the event of a breach are determined in advance, commercial and legal relationships are conducted on a more predictable, secure, and stable basis. This is particularly important in commercial contracts, business relationships between companies, and long-term business collaborations.

Another important purpose of entering into a contract is to ensure the advance management of legal risks. The risks assumed by the parties, limitations of liability, compensation obligations, and the allocation of potential losses may all be determined in advance through the contractual provisions. This makes it possible to prevent unexpected disputes, substantial costs, and loss of legal rights. The management of risks through contractual provisions is particularly important in high-value commercial contracts, international contracts, investment agreements, and long-term business relationships.

Furthermore, a comprehensive contract prepared in compliance with the law significantly reduces the likelihood of disputes arising between the parties. Nevertheless, if a dispute does arise, the contractual provisions are taken into consideration by the courts or arbitral tribunals as one of the primary criteria for resolving the dispute. Therefore, a contract that is clear, comprehensible, free from contradictions, and compliant with the applicable legislation also makes a significant contribution to preventing lengthy and costly litigation.

The importance of contract drafting is not limited to commercial life. A properly drafted contract is also essential for protecting the rights of the parties in numerous legal transactions encountered in daily life, including lease agreements, real estate sale agreements, vehicle sale agreements, service agreements, contracts for work, mandate agreements, employment contracts, and many other legal transactions. Consequently, preparing a contract that is appropriate to the nature of the contract, complies with the applicable legislation, and fairly protects the interests of the parties is one of the most important means of preventing the loss of legal rights and ensuring legal certainty.

WHAT ARE THE TYPES OF CONTRACTS UNDER TURKISH LAW?

In Turkey, contracts are classified according to the nature of the obligations they impose on the parties as unilateral contracts and bilateral contracts. In bilateral contracts, each party is both a creditor and a debtor, whereas in unilateral contracts, only one party assumes an obligation. Under Turkish law, the donation agreement constitutes the best-known example of a unilateral contract.

In addition, contracts in Turkey are classified according to their subject matter, legal nature, and field of application. Contracts governed by the Turkish Code of Obligations, the Turkish Commercial Code, the Labour Law, the Law on the Protection of Consumers, and other special legislation are subject to different legal provisions depending on the nature of the legal relationship between the parties. The most common types of contracts in Turkey encountered in practice are set out below.

• Employment Law Contracts in Turkey

Employment law contracts in Turkey regulate the establishment, continuation, wrongful termination rights and termination of the employment relationship between the employee and the employer. These contracts govern numerous matters, including wages, working conditions, the rights of the employee, the obligations of the employer, and dismissal compensation. The concept of an employment contract in Turkey should not be interpreted narrowly; contracts of a special nature, such as professional athlete contracts, seafarers’ employment contracts, and employment contracts relating to press employees, also fall within the scope of employment contract law.

The most common employment law contracts in Turkey include the following:

1. Indefinite-term employment contract
2. Fixed-term employment contract
3. Part-time employment contract
4. Employment contract with a probationary period
5. Remote working agreement
6. On-call employment contract
7. Collective bargaining agreement
8. Agreement regarding the Social Security Institution (SGK) Employment Termination Code
9. Mutual termination agreement
10. Release letter
11. Settlement and waiver agreements regarding employment receivables
12. Non-compete agreement

• Inheritance Law Contracts in Turkey

Inheritance law contracts in Turkey regulate how a person’s estate will be distributed after death or govern the legal relationships among heirs under Turkish inheritance law. A significant portion of these contracts is subject to special formal requirements under the Turkish Civil Code, and they must be executed in accordance with the procedures prescribed by law in order to be valid. In such cases, it is important to obtain the assistance of an inheritance lawyer in Turkey in addition to a contract lawyer.

The principal contracts in Turkey within this category are as follows:

1. Will
2. Inheritance renunciation agreement
3. Agreement for the dissolution of co-ownership
4. Inheritance distribution (partition) agreement
5. Agreements concerning the transfer of an inheritance share
6. Agreements concerning the distribution of family property

• Family Law Contracts in Turkey

Family law contracts in Turkey regulate the personal and property-related legal relationships between family members. Many family law contracts, particularly those executed during the divorce process, are subject to special formal requirements under the Turkish Civil Code and must be prepared in accordance with the procedures prescribed by law in order to be legally valid.

The family law contracts in Turkey within this category are as follows:

1. Matrimonial property regime agreement (marriage contract)
2. Mutual divorce protocol
3. Prenuptial agreements
4. Property division and liquidation agreements
5. Agreements regarding alimony and financial obligations
6. Agreements concerning the use and disposition of the family residence
7. Settlement agreements regarding participation claims and contribution claims

When drafting family law contracts in Turkey, consideration must be given not only to the intentions of the parties, but also to mandatory provisions of law, public order, the best interests of the child, and the fundamental rights of the spouses.

• Commercial and Corporate Law Contracts in Turkey

Commercial contracts in Turkey are agreements entered into between merchants, companies, or natural persons engaged in commercial activities, regulating their commercial relationships. These contracts ensure that commercial activities are conducted in a secure and sustainable manner. Obtaining the assistance of a commercial law attorney in Turkey in the drafting and implementation of commercial contracts is of significant importance.

The principal commercial contracts in Turkey are as follows:

1. Commercial sale of goods agreement
2. Supply agreement
3. Distribution agreement
4. Dealership agreement
5. Franchise agreement
6. Agency agreement
7. Commission agreement
8. Joint Venture agreement
9. Shareholders’ agreement
10. Partnership agreement
11. Service agreements
12. Consultancy agreement
13. Maintenance and support services agreement
14. Manufacturing and contract manufacturing agreement
15. Non-Disclosure Agreement (NDA)

• Real Estate Law Contracts in Turkey

Real estate law contracts in Turkey regulate legal transactions relating to the transfer, use, and lease of immovable property, as well as the establishment of rights in rem.

The most common reeal estate contracts in Turkey encountered in practice are as follows:

1. Sale of immovable property agreement
2. Preliminary immovable property sale agreement
3. Residential lease agreement
4. Commercial lease agreement
5. Revenue lease agreement
6. Evacuation agreement
7. Construction agreement in return for land share
8. Flat-for-land construction agreement
9. Agreements concerning the establishment of a usufruct right
10. Superficies right agreements
11. Agreements concerning the right of habitation (right of residence)
12. Use and Occupancy Agreement

• Contracts Governed by the Law of Obligations in Turkey

Numerous contracts regulated under the Turkish Code of Obligations are widely used in both daily life and commercial practice. These contracts, which govern the obligation relationships between the parties, constitute the foundation of contractual practice.

Some of these contracts are as follows:

1. Sale agreement
2. Donation agreement
3. Contract for work
4. Service agreement
5. Mandate agreement
6. Suretyship agreement
7. Loan agreement
8. Commission agreement
9. Safekeeping agreement
10. Brokerage agreement
11. Settlement agreement

• Intellectual and Industrial Property Law Contracts in Turkey

Intellectual property contracts in Turkey regulate the use or transfer of trademarks, patents, designs, copyrights, and other intellectual property rights.

Some of the contracts within this category are as follows:

1. Licence agreement
2. Trademark assignment agreement
3. Patent licence agreement
4. Copyright assignment agreement
5. Software licence agreement
6. Technology transfer agreement
7. Know-how agreement

• Consumer Law Contracts in Turkey

Consumer contracts in Turkey govern the legal relationships established between the consumer and the seller or service provider.

The principal consumer contracts in Turkey are as follows:

1. Distance sales agreement
2. Prepaid residential property sale agreement
3. Subscription agreements
4. Instalment sale agreement
5. Timeshare agreement
6. Package tour agreement
7. Financing agreements

• Banking and Finance Law Contracts in Turkey

Contracts governing the rights and obligations of the parties in the financial sector also constitute an important part of contract law in Turkey.

The most common examples are as follows:

1. Loan agreement
2. General loan agreement
3. Security agreements
4. Pledge agreement
5. Mortgage agreement
6. Financial leasing (leasing) agreement
7. Factoring agreement

• International Commercial Contracts in Turkey

International contracts in Turkey are of significant importance in legal relationships established between foreign natural persons or foreign legal entities. These contracts specifically regulate matters such as the applicable law, the competent court, or the arbitration clause.

In this context, the following are among the most common types of contracts encountered in practice:

1. International sale of goods agreements
2. International distribution agreements
3. International franchise agreements
4. Export and import agreements
5. International service agreements
6. International logistics and transportation agreements
7. International consultancy agreements
8. Investment agreements

As can be seen, contract law in Turkey is not limited to only a few types of contracts; rather, it is directly related to numerous branches of law, including employment law, commercial law, real estate law, banking and finance law, intellectual property law, consumer law, and international commercial law. For this reason, it is of great importance that the legislation applicable to the nature of the contract is taken into consideration and that the contract is professionally drafted in accordance with the needs of the parties, in order to prevent potential legal disputes that may arise in the future.

HOW IS A CONTRACT FORMED UNDER CONTRACT LAW IN TURKEY?

Pursuant to Article 1 of the Turkish Code of Obligations, for a contract to be formed in Turkey, there must be mutual and corresponding declarations of intent by the parties. In other words, for a contract to be legally formed under Turkish law, at least two parties must act with the intention of producing a specific legal consequence, and their declarations of intent must coincide on the same subject matter. As a general rule, the formation of a contract in Turkey occurs when an offer (proposal) made by one party is accepted by the other party.

1. Offer (Proposal)

An offer (proposal) is a declaration of intent addressed to another party that clearly demonstrates the intention to conclude a contract in Turkey. The person making the offer determines the essential terms of the contract, thereby giving the other party the opportunity to conclude the contract. Once the other party accepts the offer, the contract is formed in Turkey.

For a declaration of intent to qualify as an offer (proposal), it must:

• Contain the essential terms of the contract;
• Be addressed to the other party;
• Clearly demonstrate the intention to conclude a contract.

On the other hand, price lists, catalogues, advertisements, or general promotional statements do not always constitute an offer in the legal sense under Turkish contract law. Depending on the circumstances of the particular case, they may instead be regarded as an invitation to treat (invitatio ad offerendum).

2. Acceptance

Acceptance is a definite and unconditional declaration of intent indicating that an offer addressed to a party is accepted on the proposed terms. A declaration of acceptance may only be made by the person to whom the offer has been addressed.

The acceptance must correspond entirely with the offer. If the acceptance modifies the essential terms of the offer or introduces new conditions, it is no longer considered a legal acceptance but rather constitutes a new offer (counter-offer).

Unless otherwise provided by law or by the contract, the contract is deemed to be formed once the declaration of acceptance reaches the offeror. Accordingly, acceptance constitutes a legal transaction creating a new legal situation under Turkish law.

3. Mutual and Corresponding Declarations of Intent

For a contract to be formed under Turkish contract law, the existence of an offer and an acceptance alone is not sufficient; the parties’ declarations of intent must also coincide with respect to the same legal consequence. In legal doctrine, this is referred to as the meeting of the minds.

Where the parties share the same intention regarding the subject matter of the contract, the price, the method of performance, and the other essential terms, no dispute arises as to whether the contract has been formed. However, if one of the parties claims that they understood the agreement differently or expressed a different intention, the question of whether the contract has been formed and the scope of its provisions are determined through the interpretation of the contract.

Under Turkish law, both legal doctrine and the established practice of the Court of Cassation predominantly adopt the theory of reliance (principle of reliance) when interpreting declarations of intent. Accordingly, what matters is not only the parties’ actual intention, but also the objective meaning that the other party, acting in accordance with the principle of good faith, could reasonably attribute to the declaration of intent. In other words, a declaration of intent is interpreted according to the meaning that a reasonable and honest person would attribute to it under the same circumstances.

In conclusion, for a contract to be validly formed in Turkey under the Turkish Code of Obligations, there must be a valid offer, a proper acceptance of that offer, and the parties’ mutual and corresponding declarations of intent must coincide with respect to the same legal consequence. In the absence of any of these elements, there is, as a general rule, no legally formed and binding contract under Turkish law.

WHAT ARE THE VALIDITY REQUIREMENTS OF A CONTRACT IN TURKEY?

For a contract to produce legally binding effects between the parties in Turkey, it is not sufficient for the contract merely to have been formed. It must also satisfy the validity requirements prescribed by the Turkish Code of Obligations and the applicable legislation. If any of these requirements is absent, the contract may, depending on the circumstances of the particular case, be deemed null and void (absolute nullity), voidable, or incapable of producing the legal consequences expected by the parties.

Under Turkish law, the principal requirements for a contract to be valid are as follows:

1. The Parties Must Have the Legal Capacity to Enter into a Contract in Turkey

For a contract to be valid under Turkish law, the parties must first have legal capacity to perform legal transactions. In other words, the persons signing the contract must have the legal authority to acquire rights and assume obligations.

With respect to natural persons, legal capacity to perform legal transactions depends on having capacity of discernment, having attained the age of majority, and not being subject to legal restriction. As a general rule, legal transactions performed by persons who lack capacity of discernment are invalid, except for the exceptions prescribed by law.

With respect to legal entities, the capacity to enter into contracts is exercised through the authorised corporate bodies or authorised representatives of the relevant legal entity. In contracts executed on behalf of companies, associations, and foundations, it is of particular importance that the person signing the contract has the authority to represent and bind the legal entity.

2. The Subject Matter of the Contract Must Be Lawful and Consistent with Morality

Pursuant to the principle of freedom of contract, the parties are free to determine the contents and terms of their contract. However, this freedom is not unlimited.

Pursuant to Article 27 of the Turkish Code of Obligations, the subject matter of a contract must not be contrary to:

• Mandatory provisions of law;
• Public order;
• Public morality;
• Personality rights.

Contracts concluded in violation of these limitations are null and void (absolute nullity) and produce no legal effect under Turkish contract law. For example, contracts concerning an activity prohibited by law or contracts that seriously violate personality rights are considered invalid.

3. The Subject Matter of the Contract Must Not Be Impossible

The subject matter of a contract must not be objectively impossible at the time the contract is formed in Turkey. If, at the time of formation, performance of the obligation is impossible for everyone, the contract is invalid from the outset under Turkish law.

Such impossibility may arise in the form of:

• Factual impossibility (for example, undertaking to deliver property that no longer exists); or
• Legal impossibility (for example, agreeing to transfer a right that cannot legally be transferred).

By contrast, cases of impossibility arising after the formation of the contract give rise to different legal consequences, and each case must be evaluated according to its own specific circumstances.

4. The Declarations of Intent Must Be Genuine and Free from Defects

For a contract to be valid in Turkey, the parties’ declarations of intent must be made freely and without legal defects. Where one party’s declaration of intent does not reflect its true intention or is legally defective, the validity of the contract may be affected.

The principal defects of consent are as follows:

• Mistake
• Fraud
• Duress
• Declarations of intent made in jest (within the limits recognised by law and judicial practice)

In such cases, if the conditions prescribed by law are satisfied, the avoidance of the contract may become possible under Turkish contract law.

5. Absence of Sham Transactions (Simulation)

A sham transaction (simulation) is an agreement between the parties to create an apparent contract that does not reflect their true intention, for the purpose of deceiving third parties. In other words, although the parties create the appearance that a contract has been concluded, they either do not intend to produce any legal consequences at all or intend to establish a legal relationship different from the one appearing in the apparent contract.

Under Turkish law, sham contracts generally produce no legal effect, as they do not reflect the parties’ true intention. In practice, the most common examples of sham transactions include fraudulent transfers of immovable property, action for annulment of a fraudulent transfer by the deceased (sham transactions by a deceased person intended to deprive other heirs of their inheritance rights), and transactions carried out to conceal assets from creditors.

6. Compliance with the Form Requirements Prescribed by Turkish Law

As a general rule, the Turkish Code of Obligations adopts the principle of freedom of form. Accordingly, unless otherwise provided by law, contracts in Turkey may be concluded without being subject to any particular form.

However, certain contracts in Turkey are subject to special form requirements, such as a written form, an official form, or notarial execution, in order to be valid. For example:

• Agreements for the sale of immovable property in Turkey must be executed in official form before the Land Registry Office.
• Preliminary immovable property sale agreements in Turkey must be executed before a notary public in the form prescribed for notarial deeds.
• Suretyship agreements in Turkey must comply with the written form requirements expressly prescribed by law.

Failure to comply with the form requirements prescribed by law will, as a general rule, render the contract invalid under Turkish contract law.

In conclusion, for a contract to be legally valid in Turkey, the parties must have legal capacity, the subject matter of the contract must be lawful and possible, the parties’ declarations of intent must be free from defects, the contract must not constitute a sham transaction (simulation), and it must comply with the form requirements prescribed by contract law in Turkey where applicable. Particularly when drafting contracts involving high economic value or giving rise to long-term legal relationships, it is important that the contract be prepared or reviewed by a contract law attorney in order to prevent potential loss of legal rights in the future.

WHEN IS A CONTRACT LEGALLY INVALID IN TURKEY?

Even if a contract has been formed through the mutual agreement of the parties’ declarations of intent, it may not be regarded as legally valid under Turkish law. Under the Turkish Code of Obligations, certain deficiencies or legal defects may result in a contract producing no legal effect, being subsequently avoided, or certain provisions becoming unenforceable.

In general, the invalidity of a contract refers to the contract’s inability to produce legal consequences or to achieve its intended legal effects. Under contract law in Turkey, the grounds of invalidity are examined under the categories of non-existence, absolute nullity, voidability, incomplete validity (suspended invalidity), and partial invalidity.

1. Non-Existence

Non-existence arises where the essential elements required for the formation of a contract have never come into existence. In other words, if the fundamental elements required for the legal existence of a contract are absent, no contract recognized by Turkish law exists.

The most fundamental constituent element of a contract is the existence of mutual and corresponding declarations of intent by the parties. If there is no meeting of the parties’ intentions, the contract is deemed non-existent from the outset.

In cases of non-existence:

• The contract is deemed never to have been formed.
• It may be asserted by anyone at any time.
• It may be taken into consideration ex officio by the court.
• It is not subject to any statute of limitations or limitation period.

2. Absolute Nullity

Absolute nullity arises where a contract has been formed but fails to satisfy one of the validity requirements prescribed by contract law in Turkey, with the result that it produces no legal effect from the outset.

Pursuant to Article 27 of the Turkish Code of Obligations, a contract is absolutely null and void particularly where:

• The subject matter of the contract is unlawful;
• It is contrary to mandatory provisions of law;
• It is contrary to public order;
• It is contrary to public morality;
• It is contrary to personality rights; or
• There is initial objective impossibility.

In addition, under Turkish law, the following situations also generally result in absolute nullity:

• Failure to comply with the form requirements prescribed by law;
• Contracts concluded by persons who completely lack legal capacity;
• Sham transactions (simulation).

A contract that is absolutely null and void produces no legal effect from the moment of its formation, and this defect cannot subsequently be cured by the parties’ consent. Furthermore, absolute nullity may be invoked by anyone and must also be taken into consideration ex officio by the courts in Turkey.

3. Voidability

In certain circumstances, a contract is not invalid from the outset; however, the party protected by law is granted the right to avoid the contract. This is referred to as voidability.

In the case of voidable contracts, the legal transaction remains valid and effective until the right of avoidance is exercised. If the protected party exercises the right of avoidance within the period prescribed by law, the contract becomes invalid with retroactive effect. If the right is not exercised within the applicable period, the contract becomes finally and definitively valid under contract law in Turkey.

Examples of voidability include:

• Mistake – For example, signing the wrong document.
• Fraud – For example, being induced to enter into a contract through fraudulent misrepresentation.
• Duress – For example, signing a contract as a result of insult, threats, coercion, or violence.
• Certain legal transactions entered into by persons with limited legal capacity without the required consent of their legal representative.

4. Incomplete Validity (Suspended Invalidity)

Some contracts are validly formed but require an additional approval or supplementary legal act prescribed by contract law in Turkey before they can produce legal effects. In such cases, the contract is not entirely invalid; rather, its legal effects are suspended until the required condition is fulfilled. In Turkish legal doctrine, this is referred to as incomplete validity or suspended invalidity.

For example, where a legal transaction is subject to the approval of a legal representative, the contract remains ineffective until the required approval is granted. If the deficiency is subsequently remedied, the contract becomes valid. However, if the deficiency cannot be remedied, the contract becomes invalid under Turkish law.

5. Partial Invalidity

Not every violation of the law renders the entire contract invalid in Turkey. Pursuant to Article 27 of the Turkish Code of Obligations, where the ground of invalidity affects only certain provisions of the contract, only those provisions are, as a general rule, deemed invalid. This is referred to as partial invalidity.

For partial invalidity to apply in Turkey:

• The ground of invalidity must affect only specific provisions of the contract;
• The remainder of the contract must be capable of remaining in force after the invalid provision is removed; and
• It must be possible to conclude that the parties would have entered into the contract even without the invalid provision.

On the other hand, if the invalid provision constitutes the foundation of the contract, and it is clear that the parties would not have concluded the contract without that provision, the consequence under Turkish law is not partial invalidity, but rather the absolute nullity of the entire contract.

The invalidity of a contract gives rise to significant legal consequences for the parties under contract law in Turkey. Performance cannot be demanded on the basis of an invalid contract, penalty clauses cannot be enforced, contractual rights cannot be asserted, and, in many cases, the parties are required to return the performances they have received in accordance with the rules governing unjust enrichment.

For this reason, particularly when preparing high-value commercial contracts, real estate contracts, employment contracts, international contracts, and corporate law contracts, it is of great importance that both the formation and the validity requirements of the contract are reviewed by an experienced contract law attorney in Turkey in order to prevent serious losses of legal rights that may arise in the future.

HOW IS A CONTRACT DRAFTED IN TURKEY?

The contract drafting process in Turkey is not merely a matter of the parties agreeing on the wording of a document. In order to prepare a contract that is legally valid, enforceable, and protects the interests of the parties under Turkish law, certain stages must be carefully followed. Particularly in commercial relationships, employment law, real estate transactions, and international contracts, incomplete or improperly drafted provisions may result in significant losses of legal rights.

Although every contract has its own characteristics, a professional contract drafting process in Turkey generally consists of the following stages.

1. Preliminary Preparation and Information Gathering

When drafting a contract in Turkey, the needs, expectations, and the purpose of the contract should first be identified. Since this stage forms the foundation of the contract, it is of considerable importance.

During the preliminary preparation stage, particular attention should be given to the following:

• Identification of the parties to the contract
• Review of the parties’ authority to represent and sign
• Determination of the subject matter of the contract
• Identification of the parties’ expectations and commercial objectives
• Assessment of potential legal and commercial risks
• Determination of the legislation applicable to the contract under Turkish law
• Examination of any special form requirements prescribed by law

Any deficiencies at this stage may give rise to significant problems during the subsequent stages of the contract.

2. Preparation of the Draft Contract

Once the parties’ needs have been identified, the draft contract is prepared. At this stage, the essential provisions of the contract should be drafted in a clear, comprehensible, and unambiguous manner.

A draft contract generally includes the following matters:

• Parties’ Information

The parties to the contract should be identified completely and accurately. For natural persons, identification details should be included, while for legal entities, the company name, tax identification number, trade registry information, and authorised representatives should be clearly specified.

• Subject Matter of the Contract

The legal relationship governed by the contract should be explained in detail. An uncertain or ambiguous subject matter may give rise to disputes regarding the interpretation of the contract in the future.

• Rights and Obligations of the Parties

The most important part of the contract consists of the obligations assumed by the parties. The contract should clearly specify the performances each party is required to render, the circumstances under which they will be liable, and the rights to which they are entitled.

• Price and Payment Terms

The contract should expressly specify the contract price, payment dates, method of payment, currency, and the provisions applicable in the event of late payment.

• Performance Terms and Place of Performance

The contract should specify how and where the parties are required to perform their obligations. In particular, commercial contracts generally regulate the method of delivery and delivery periods in detail.

• Term of the Contract

The contract should clearly state whether it is concluded for a fixed term or an indefinite term. If there are any renewal or extension provisions, these should also be expressly regulated.

3. Inclusion of Protective Provisions and Risk Management Clauses

One of the most important characteristics of a professionally drafted contract is that it anticipates not only the current legal relationship but also potential future disputes.

For this reason, the following protective provisions are commonly included in contracts under Turkish law:

• Penalty clause provisions
• Default interest provisions
• Compensation provisions
• Force majeure provisions
• Non-Disclosure Agreement (NDA) provisions
• Personal data protection provisions
• Non-compete provisions
• Exclusivity provisions
• Non-assignment provisions
• Disclaimer and limitation of liability provisions
• Warranty and undertaking provisions
• Intellectual property rights provisions

By incorporating these provisions, the legal and commercial risks that the parties may face can be significantly reduced.

4. Negotiation and Revision Stage

Once the draft contract has been prepared, the parties proceed to negotiate its provisions. Particularly in high-value commercial contracts, numerous revisions may be made by the parties’ attorneys and legal advisors.

At this stage, the following matters are typically evaluated:

• Whether the rights and obligations are fairly balanced;
• Which party bears the contractual risks;
• Whether the penalty clauses are reasonable;
• Whether the limitations of liability are adequate; and
• Whether the dispute resolution mechanisms are appropriate.

The purpose of the negotiation process is to produce a practical, enforceable, and well-balanced contract that protects the interests of all parties under contract law in Turkey.

5. Determining Dispute Resolution Provisions

When drafting contracts in Turkey, it is important to regulate not only how the contractual relationship will be performed, but also how potential disputes will be resolved.

For this purpose, the contract may include provisions concerning:

• Competent court clauses
• Arbitration clauses
• Mediation provisions
• Evidence agreements
• Applicable law provisions

Particularly in international contracts, provisions governing the applicable law and the competent court or arbitral tribunal are of critical importance.

6. Execution and Entry into Force

Once the parties have reached agreement on the final version of the contract, it is executed and enters into force.

At this stage, the following matters should be verified:

• Whether the signatories are duly authorised;
• Whether the persons signing on behalf of companies have the authority to represent and bind the company;
• Whether notarial certification is required;
• Whether the form requirements prescribed by Turkish law have been complied with; and
• The effective date of the contract.

While some contracts enter into force upon execution, others become effective only upon the occurrence of a specified condition or on a specified date.

7. Contract Administration and Management

The drafting and execution of a contract do not mark the end of the contractual process. Many disputes arise because the parties fail to properly monitor and manage their contractual obligations after the contract has been signed.

Accordingly, it is important to:

• Monitor payment due dates;
• Supervise delivery and performance obligations;
• Track contractual terms and expiry dates;
• Review renewal and termination rights;
• Record all contractual amendments in writing.

In conclusion, the contract drafting process in Turkey is not merely the preparation of a document consisting of a few contractual clauses. In order to protect the rights of the parties, reduce legal risks, and prevent future disputes, contracts should be professionally drafted, carefully negotiated, and properly administered under Turkish contract law. Particularly in transactions involving significant economic value, having a contract prepared or reviewed by a contract law attorney provides substantial advantages in safeguarding the interests of the parties.

WHAT SHOULD YOU CONSIDER WHEN ENTERING INTO A CONTRACT IN TURKEY?

The fact that a contract is legally valid in Turkey does not necessarily mean that it adequately protects the interests of the parties. In practice, many disputes arise not because no contract was concluded, but because the contract was incompletely drafted, contained ambiguous provisions, or failed to anticipate potential legal and commercial risks. Therefore, when drafting a contract in Turkey, attention should be paid not only to the legal validity requirements, but also to provisions designed to prevent future disputes.

• Contract Provisions Should Be Clear and Unambiguous

The language used in a contract should be clear, comprehensible, and free from ambiguity or contradiction. Vague or ambiguous provisions may lead to differing interpretations by the parties in the future. In particular, the subject matter of the contract, delivery terms, payment obligations, and the responsibilities of the parties should be regulated as specifically as possible.

• Standard Contract Templates Should Not Be Used Blindly

Standard contract templates downloaded from the internet, pre-printed forms, or templates generated or modified by artificial intelligence are often unsuitable for the specific transaction. Since every legal relationship has its own unique characteristics, provisions copied from another contract may fail to meet the parties’ needs and may give rise to unexpected legal consequences under Turkish law.

• Risk Allocation Should Be Balanced

Contracts regulate not only the rights of the parties but also the allocation of risks. The allocation of potential losses, the scope of liability, and the obligations assumed by each party should be determined in a fair and balanced manner. Contracts that impose excessive obligations on only one party frequently lead to serious disputes in practice.

• Avoid Indefinite Timeframes and Ambiguous Expressions

Expressions such as “within a reasonable period,” “where necessary,” “to a reasonable extent,” or “when deemed necessary” are open to different interpretations in practice. Instead, the contract should specify dates, time periods, amounts, percentages, and other objective criteria whenever possible.

• Mandatory Legal Provisions Should Not Be Overlooked

Although parties may believe that they are free to agree on any contractual terms, mandatory provisions of Turkish law establish the limits of freedom of contract. Since contractual provisions that violate mandatory legal rules are generally invalid, the applicable legislation should always be taken into account when drafting a contract in Turkey.

• Potential Future Scenarios Should Be Anticipated

Many contracts are drafted based solely on the assumption that the contractual relationship will proceed normally, while potential problems are overlooked. However, circumstances such as non-performance by a party, changes in economic conditions, unexpected delays, or other developments that make the continuation of the contract difficult should also be considered. A well-drafted contract is one that anticipates not only the present circumstances but also future disputes and unforeseen events.

• The Contract Should Comply with Current Legislation

Legal regulations may change over time. Consequently, a contract template prepared many years ago may contain provisions that are no longer consistent with the current legislation in Turkey. For this reason, commercial contracts, in particular, should be reviewed periodically and updated to ensure compliance with the applicable legislation.

• Pay Attention to Translation Errors in Foreign Language Contracts

In international commercial transactions, bilingual contracts are frequently used. However, inaccurate or incomplete translations may result in the parties assuming different obligations than intended. Accordingly, bilingual contracts should clearly specify which language version prevails, and legal terminology should be used accurately and consistently.

• Obtain Professional Legal Assistance

Obtaining professional legal advice is particularly important in relation to commercial contracts, corporate agreements, real estate transactions, international contracts, investment agreements, and other legal transactions involving significant economic value. Legal assistance obtained during the contract drafting stage can help prevent lengthy and costly litigation in the future.

In conclusion, when preparing a contract under Turkish law, it is not sufficient that the parties have merely reached an agreement. Drafting a contract that contains clear provisions, complies with the current legislation in Turkey, anticipates potential risks, and fairly protects the interests of the parties is one of the most effective ways to prevent future legal disputes.

DRAFTING INTERNATIONAL COMMERCIAL CONTRACTS IN TURKEY

As the number of companies established in Turkey, as well as foreign branches, liaison offices, and other commercial presences of foreign companies operating in Turkey, continues to increase, commercial relationships have become increasingly international in nature. With the growth of global trade, many cross-border commercial transactions—including exports, imports, international service agreements, foreign investments, franchise arrangements, distributorships, licensing, technology transfer agreements, and joint ventures—are now conducted through international commercial contracts.

Unlike domestic contracts governed solely by the Turkish Code of Obligations, international contracts may be connected to the legal systems of multiple jurisdictions and therefore require a far more comprehensive legal assessment. Because the parties may be subject to different legal systems, operate under different commercial practices, and communicate in different languages, every provision of an international commercial contract must be drafted with particular care to ensure legal certainty, protect the parties’ interests, and minimize the risk of future disputes.

HOW TO DRAFT AN INTERNATIONAL CONTRACT?

International contracts are agreements governing legal relationships involving a foreign element, concluded between natural persons or legal entities established in different countries. These contracts not only document the commercial agreement between the parties but also seek to minimize risks arising from different legal systems, protect the rights and obligations of the parties, and determine the mechanisms for resolving potential disputes.

Unlike domestic contracts, the drafting of international contracts in Turkey requires consideration not only of Turkish law, but also of the rules of private international law, international commercial practices, international conventions, the laws of the relevant foreign jurisdictions, and the commercial customs and practices of the relevant industry. Accordingly, the preparation of international commercial contracts requires a comprehensive approach from both a legal and commercial perspective.

1. Determining the Commercial Relationship and the Purpose of the Contract

When drafting an international contract, the scope of the commercial relationship between the parties should first be clearly defined. The purpose for which the parties are entering into the contract, the subject matter of the contract, their commercial expectations, and the obligations they will undertake should be clearly established.

At this stage, particular consideration should be given to the following:

• The purpose of the contract
• The scope of the commercial relationship
• The goods or services to be provided
• The commercial expectations of the parties
• Potential legal and commercial risks

2. Proper Identification of the Parties and Their Authority

In international contracts, it is essential that the details of the parties are stated completely and accurately.

Accordingly, the following information should be correctly specified:

• Company names
• Trade registry information
• Tax identification numbers
• Registered addresses
• Persons authorised to represent and bind the company

Particularly where a contract is executed on behalf of a foreign company, verifying the authority of the signatory in advance helps prevent future disputes regarding the validity of the contract.

3. Determining the Contract Language and Preparing the Definitions Section

International commercial contracts are frequently drafted in two or more languages. Accordingly, the legal and commercial terms used throughout the contract should be clearly defined.

The contract should also expressly specify:

• The governing language of the contract
• The official language for interpretation
• How discrepancies between different language versions will be resolved

Ambiguous wording and terms capable of multiple interpretations are among the most common causes of international contractual disputes.

4. Regulating the Rights and Obligations of the Parties

The rights and obligations assumed by the parties form the foundation of an international contract.

Accordingly, the contract should regulate the following matters in detail:

• Delivery terms
• Method of performance
• Delivery schedules
• Method of payment
• Currency of payment
• Invoicing procedures
• Warranty provisions
• Audit rights
• Tax obligations (including VAT, domestic and foreign income tax, stamp duty, etc.)
• Quality standards
• Intellectual property rights

Clearly defining the responsibilities of the parties significantly reduces the likelihood of future disputes.

5. Determining the Applicable Law

One of the most critical aspects of an international contract is the choice of applicable law. In most cases, the parties are free to determine which country’s laws will govern the contract. This eliminates uncertainty regarding the legal rules that will apply in the event of a dispute.

Where no choice of law has been made, the applicable law is determined in accordance with Private International Law and Procedural Law Act No. 5718 (MÖHUK) and the relevant private international law rules.

6. Determining the Dispute Resolution Method

In international commercial contracts, it is important to determine not only the applicable law, but also where and how disputes will be resolved.

Accordingly, the contract should clearly regulate matters such as:

• The competent court
• The arbitration clause
• The mediation procedure
• The arbitral institution
• The language of arbitration
• The seat of arbitration

7. Execution and Entry into Force

At the final stage, the parties agree on the final version of the contract and execute it.

At this stage, the following matters should be addressed:

• Verification of the signatories’ authority
• Obtaining the necessary corporate resolutions
• Completion of notarial or apostille procedures, where required
• Determination of the effective date of the contract

Some international contracts may also be concluded by means of an electronic signature. However, the validity of electronic signatures should be assessed in accordance with the laws of the relevant jurisdictions.

WHAT SHOULD BE CONSIDERED WHEN DRAFTING INTERNATIONAL CONTRACTS?

International contracts involve significantly greater legal risks than domestic contracts because they are concluded between parties operating under different legal systems, different commercial practices, and different cultural backgrounds. For this reason, particular attention should be paid to the following matters when drafting an international contract.

• The Contract Should Be Clear and Unambiguous

Every expression used in an international contract may be interpreted differently under different legal systems. Accordingly, the contract should be drafted in a clear, precise, consistent, and unambiguous manner to minimize the possibility of conflicting interpretations.

• Legal Terminology Should Be Used Correctly

Each legal system employs its own legal concepts and terminology. Therefore, particularly in English-language contracts, it is essential that legal terminology is used accurately and that technical legal terms are translated correctly.

• Cultural and Commercial Differences Should Be Taken into Account

In international commerce, not only the applicable law but also the commercial culture of the parties may directly affect the performance of the contract. Business practices, negotiation styles, delivery procedures, and commercial expectations may vary significantly from one country to another. Accordingly, when preparing an international contract, consideration should also be given to the commercial practices of the jurisdictions in which the parties operate.

• A Risk Assessment Should Be Conducted

When drafting international contracts, all potential legal and commercial risks that the parties may encounter should be assessed in advance.

In particular, the contract should, as far as possible, address and allocate risks relating to:

1. Exchange rate risk
2. Payment risk
3. Tax liabilities
4. Export and import restrictions
5. Trade embargoes and sanctions
6. Tax obligations
7. Political risks
8. Force majeure events
9. Supply chain disruptions

• Termination and Exit Mechanisms Should Be Regulated

One of the most common sources of disputes in international contracts concerns the termination of the contractual relationship.

Accordingly, the contract should clearly regulate:

1. Grounds for termination for cause
2. Termination procedures for fixed-term or notice-based termination
3. Notice periods
4. Liquidation and winding-up provisions
5. Post-termination obligations

• International Commercial Rules Should Be Taken into Consideration

Depending on the nature of the contract, consideration should be given not only to the laws of the relevant jurisdictions, but also to whether internationally recognized commercial rules and instruments—such as Incoterms, the United Nations Convention on Contracts for the International Sale of Goods (CISG), the ICC Rules, and other international commercial regulations—should apply.

In conclusion, a well-drafted international commercial contract is not merely a document recording the parties’ commercial agreement. It also serves as a comprehensive legal safeguard that manages legal risks, ensures compliance with international commercial rules, balances the interests of the parties, and anticipates potential disputes before they arise.

HOW CAN A CONTRACT BE TERMINATED IN TURKEY?

A contract in Turkey is subject to specific legal rules not only with respect to its formation and performance, but also regarding its termination. The circumstances under which a contract may be terminated and the procedures to be followed are determined by the intentions of the parties, the provisions of the contract, and the applicable legislation, particularly the Turkish Code of Obligations.

Not all contracts terminate in the same manner. Depending on the nature of the contract, termination may occur through performance, mutual termination (rescission by agreement), termination, withdrawal (rescission), avoidance, expiration of the contractual term, or other grounds for termination provided by law. Accordingly, before determining the appropriate method of terminating a contract in Turkey, the type and legal nature of the contract should first be evaluated.

1. Termination by Mutual Agreement (Mutual Rescission Agreement)

One of the safest methods of terminating a contract in Turkey is for the parties to mutually agree to bring the contractual relationship to an end. In practice, this method is commonly referred to as a mutual rescission agreement or a termination agreement.

Through a mutual rescission agreement in Turkey, the parties terminate the existing contract by their mutual declarations of intent and are free to determine the terms of settlement following termination. This method is frequently used in employment contracts, commercial contracts, and long-term business relationships in Turkey.

2. Withdrawal from the Contract (Rescission)

Withdrawal from a contract in Turkey generally applies to contracts involving instantaneous performance and allows one party to terminate the contract retroactively (ex tunc) upon the occurrence of circumstances provided either by law or by the contract.

The parties may expressly provide for a contractual right of withdrawal, or this right may arise under circumstances expressly recognized by contract law in Turkey.

Under the Turkish Code of Obligations, the right of withdrawal may arise, in particular, where:

• The debtor is in default;
• Performance has become impossible;
• The other party has breached the contract; or
• Other specific grounds provided by law exist,

provided that the statutory requirements are satisfied.

Where a contract is rescinded, the parties are generally required to restore the performances they have received, returning them to one another.

3. Termination of the Contract

Termination is the method of bringing a contract to an end that is primarily used for continuous performance contracts. Service agreements, lease agreements, mandate agreements, agency agreements, distribution agreements, and similar continuing obligations are generally terminated by way of termination under Turkish contract law.

Termination brings the contract to an end with prospective effect (ex nunc). In other words, the rights and obligations that accrued up to the date of termination remain valid, whereas the contract ceases to produce legal effects for the period following the effective date of termination.

4. Ordinary and Extraordinary Termination

Under Turkish contract law, the right to terminate a contract may generally be exercised either through ordinary termination or extraordinary termination.

Ordinary termination is exercised in compliance with the notice periods prescribed by the contract or by law. In such cases, the contract does not terminate upon receipt of the notice by the other party but rather upon the expiry of the applicable notice period.

Extraordinary termination, on the other hand, allows the contract to be terminated with immediate effect, without observing any notice period, where just cause exists. Circumstances such as the breakdown of the relationship of trust, material breaches of contract, or situations in which the continuation of the contractual relationship has become intolerable under the principle of good faith may constitute grounds for extraordinary termination in Turkey.

5. Right of Withdrawal in Consumer Contracts

For certain types of contracts, Turkish law provides special protection for consumers.

In particular, consumers are granted the right to withdraw from distance contracts, doorstep sales, and other consumer transactions specified by law within the statutory period, without providing any reason.

The right of withdrawal is a consumer protection mechanism specifically regulated under consumer protection legislation and differs from the general concept of rescission (withdrawal from a contract) under contract law in Turkey.

6. Termination for Cause

In certain circumstances, the continuation of a contract may become unreasonable for one of the parties under the principle of good faith.

For example, termination for cause in Turkey may arise in situations involving:

• Material breaches of contract
• A complete breakdown of the relationship of trust
• Persistent default
• Serious misconduct by one of the parties
• Frustration of the purpose of the contract

Whether the right to terminate for cause may be exercised should be assessed by considering both the contractual provisions and the applicable provisions of Turkish contract law.

7. How Should a Notice of Termination Be Given in Turkey?

The right of termination is a right that creates legal consequences upon unilateral exercise. Accordingly, it is essential that the notice of termination is properly communicated to the other party in Turkey.

Although Turkish law does not require written notice for many types of contracts, it is generally recommended, for evidentiary purposes, that a notice of termination be served through:

• A Turkish notary public
• Registered mail with return receipt
• The Registered Electronic Mail (KEP) system

8. What Are the Parties’ Rights and Obligations Following Termination in Turkey?

The termination of a contract in Turkey does not automatically extinguish every legal relationship between the parties.

Depending on the nature of the contract, the following rights and obligations may continue after termination in Turkey:

• Collection of accrued receivables
• Return of delivered goods
• Release of security interests or guarantees
• Continuing confidentiality obligations
• Non-compete obligations
• Liquidated damages (penalty clause) provisions
• Claims for damages

Accordingly, when drafting a contract under contract law in Turkey, it is important to regulate not only the grounds for termination, but also the post-termination settlement provisions governing the parties’ respective rights and obligations after the contractual relationship has ended.

9. What Should Be Considered When Terminating a Contract?

The termination of a contract in Turkey is a legal process that requires at least as much care and attention as the drafting of the contract itself. An improper or procedurally defective termination may not effectively bring the contract to an end and may instead give rise to claims for damages, liquidated damages (contractual penalty clauses), wrongful termination, or breach of contract.

Accordingly, when terminating a contract under Turkish law, the following matters should be carefully considered:

• The termination procedures specified in the contract should be strictly followed;
• Any statutory notice periods should be observed;
• It should be determined whether the legal requirements for termination for cause have been satisfied;
• The notice of termination should be served in accordance with the applicable legal and contractual requirements; and
• The parties’ post-termination settlement and winding-up obligations should be properly planned.

In conclusion, the termination of a contract in Turkey is not merely a matter of making a unilateral declaration of intent. The type of contract, the grounds for termination, the applicable legal procedure, the post-termination settlement process, and the potential legal consequences should all be evaluated together. Particularly where contracts involve significant economic value or complex legal relationships, obtaining professional legal assistance is essential to protect the parties against potential loss of legal rights under Turkish law.

WHAT IS THE IMPORTANCE OF A CONTRACT LAWYER IN DRAFTING A CONTRACT IN TURKEY?

Contracts form the legal foundation of the relationship between the parties and often govern transactions involving significant economic value. For this reason, drafting a contract in Turkey is not merely a matter of compiling standard contractual provisions. Obtaining professional legal assistance is essential to protect the parties’ rights, identify legal risks in advance, prevent future disputes, and ensure that the contract is legally enforceable under contract law in Turkey.

In practice, many disputes arise not because no contract was concluded, but because the contract was incompletely drafted, contained ambiguous provisions, included clauses contrary to mandatory legal rules, or failed to adequately address the parties’ potential risks. Accordingly, obtaining legal assistance from an experienced contract lawyer in Turkey during the drafting process can make a significant contribution to preventing future litigation and claims for damages.

• Identifying Legal Risks in Advance

A contract lawyer in Turkey analyses the legal and commercial risks that the parties may encounter before the contract is executed and incorporates the necessary protective provisions into the agreement.

In particular, matters such as:

1. Defining limitations of liability
2. Drafting liquidated damages (penalty clause) provisions
3. Establishing security mechanisms
4. Preparing force majeure clauses
5. Drafting confidentiality and non-compete provisions

require professional legal assessment.

• Preparing a Contract Tailored to the Parties’ Needs

Standard contract templates are often unsuitable for the specific transaction. Since every commercial relationship, investment, or legal transaction involves its own unique risks, the contract should be drafted to address the particular needs of the parties.

A contract lawyer in Turkey analyses the parties’ business activities, commercial expectations, and legal requirements, and prepares transaction-specific contracts rather than relying on generic templates.

• Ensuring Compliance with Legislation and Legal Validity

The mere fact that a contract has been signed by the parties does not mean that it is legally valid. The contract must be prepared in compliance with:

1. The Turkish Code of Obligations
2. The Turkish Commercial Code
3. Consumer protection legislation
4. Labour legislation
5. Personal data protection legislation
6. Other mandatory provisions of Turkish law

A contract lawyer in Turkey reviews the contractual provisions to ensure their compliance with the applicable legislation in Turkey and helps prevent the inclusion of provisions that may be invalid or unenforceable.

• Preventing Disputes

The primary purpose of a well-drafted contract is not to make litigation easier, but to prevent legal disputes from arising in the first place.

Accordingly, professionally drafted contracts typically:

1. Avoid ambiguous language;
2. Clearly define the rights and obligations of the parties;
3. Specify the procedures to be followed in the event of a dispute; and
4. Expressly designate the competent court or include an arbitration clause.

As a result, the likelihood of conflicting interpretations between the parties is significantly reduced.

• Providing Legal Support During Contract Negotiations

Particularly in commercial transactions, the parties often engage in lengthy contract negotiations. A contract lawyer not only drafts the agreement but also protects the client’s legal interests throughout the negotiation process by identifying and revising provisions that may create unnecessary legal or commercial risks.

This ensures that the contract is not only legally valid in Turkey but also effectively protects the commercial interests of the client.

• Professional Assistance for International Contracts

Contracts involving a foreign element present considerably more complex legal risks. Determining the applicable law, drafting jurisdiction or arbitration clauses, addressing international commercial rules, and assessing issues involving foreign legal systems require specialized legal expertise.

Accordingly, obtaining legal assistance from an experienced English-speaking lawyer in Turkey is of particular importance when preparing international sale contracts, franchise agreements, distribution agreements, licence agreements, investment agreements, and other international commercial contracts.

• Updating and Revising Contracts

Contracts should remain up to date not only at the time they are executed but also throughout their duration. Legislative amendments, changes in economic conditions, or developments affecting the parties’ commercial activities may require the existing contract to be revised.

A contract lawyer in Turkey reviews the agreement to ensure its continued compliance with the current legislation and ensures that any necessary amendments are implemented in a timely manner.

• Advantages of Working with a Contract Lawyer in Turkey

Working with an experienced contract lawyer in Turkey provides an important legal safeguard by helping to:

1. Prevent the loss of legal rights;
2. Reduce legal and commercial risks;
3. Ensure that the contract complies with the current legislation in Turkey;
4. Protect the interests of the parties in a fair and balanced manner;
5. Significantly reduce the likelihood of disputes; and
6. Minimize the risk of future litigation.

In conclusion, contract drafting requires not only legal knowledge, but also practical experience, risk assessment, and strategic legal analysis. Particularly with respect to commercial contracts, corporate agreements, real estate contracts relating to properties acquired by foreign nationals in Turkey, and international commercial contracts, obtaining legal assistance from an experienced contract lawyer in Turkey provides significant advantages in protecting the parties’ rights and preventing future legal disputes.

HOW MUCH DOES CONTRACT DRAFTING COST IN TURKEY?

The cost of drafting a contract in Turkey varies depending on the type of contract, its scope, the level of legal and commercial risk involved, whether it contains a foreign element, and the scope of the legal services to be provided by the lawyer. Accordingly, it is not possible to determine a single fee that applies to all types of contracts.

In Turkey, the minimum fees that lawyers may charge for legal advisory services and contract drafting services are determined each year under the Attorneyship Minimum Fee Tariff (AAÜT) published by the Union of Turkish Bar Associations. However, this tariff establishes only the minimum fees that may be charged. Depending on the nature of the contract, the parties are free to agree on a higher legal fee.

The following factors are generally taken into consideration when determining the contract drafting fee in Turkey:

• The type and legal nature of the contract;
• The scope and length of the contract;
• The economic value of the transaction and the level of legal risk involved;
• Whether the contract contains an international or foreign element;
• Whether legal assistance will also be provided during the negotiation process;
• Whether an existing contract will be revised or a new contract will be drafted from scratch;
• Whether the contract must be prepared in two languages or in a foreign language.

In particular, commercial contracts, corporate agreements, international commercial contracts, investment agreements, franchise agreements, distribution agreements, and licence agreements generally require more comprehensive legal analysis and negotiations than standard contracts. Consequently, the legal fees applicable to such contracts in Turkey are typically higher.

In practice, contract drafting services may also include not only the preparation of a new contract, but also the legal review of existing contracts, risk assessments, contract revisions, review of contracts prepared by the other party, and the provision of legal advice during contract negotiations.

In conclusion, price should not be the sole consideration when determining the value of a contract drafting service in Turkey. A professionally drafted contract that safeguards the legal interests of the parties, helps prevent potential disputes, and is tailored to the specific nature of the transaction represents an important investment in avoiding costly litigation and claims for damages in the future. Accordingly, before engaging a lawyer to prepare a contract in Turkey, it is advisable to obtain a legal assessment of the proposed transaction and discuss the applicable legal fees based on the scope of the services required.