WHAT IS BUSINESS LAW IN TURKEY?

WHAT ARE THE FUNDAMENTAL PRINCIPLES OF BUSINESS LAW IN TURKEY?

Business law in Turkey is based on various fundamental principles that ensure commercial life is conducted in a regular, secure, and predictable manner. While these principles aim to ensure that relationships between merchants and commercial enterprises are maintained in accordance with the law, they also contribute to the continuation of economic activities within a stable framework. The principal fundamental principles adopted in Turkish business law are explained below.

WHAT ARE THE SOURCES OF COMMERCIAL LAW IN TURKEY?

The sources of commercial law in Turkey refer to the fundamental legal authorities upon which the rules governing commercial relationships are based. These sources play a crucial role in ensuring that commercial life is conducted in an orderly, secure, and predictable manner. In the Turkish legal system, the sources of commercial law in Turkey consist of statutes, judicial decisions, commercial customs and practices, legal doctrine, and international treaties.

• Statutes and Legislative Regulations

Statutes constitute the primary and most important source of commercial law in Turkey. The foundation of Turkish business law is established primarily by the Turkish Commercial Code No. 6102, together with various other statutes and legislative regulations. In addition, the Turkish Code of Obligations, the Enforcement and Bankruptcy Code, the Law on the Protection of Competition, the Law on the Protection of Consumers, and other relevant legislation also play a significant role in regulating commercial relationships in Turkey.

These statutes establish the fundamental legal rules governing the incorporation and operation of companies, commercial enterprises, commercial contracts, negotiable instruments, unfair competition, and commercial disputes, as well as many other matters related to commercial activities in Turkey.

• Judicial Decisions

Judicial decisions are among the important sources of commercial law in Turkey, particularly with respect to the interpretation and application of legal provisions. In particular, the decisions of the Court of Cassation serve as important guidance regarding the application of commercial law.

Judgments rendered by the courts contribute to legal certainty by promoting consistency in the resolution of similar disputes and guiding legal practice. Although judicial decisions are not formally binding sources of law under the Turkish legal system, well-established Court of Cassation precedents carry significant persuasive authority and are highly influential in practice.

• Commercial Customs and Practices

Commercial customs and practices are among the important sources of business law in Turkey. Customs that have been consistently followed within a particular sector of commerce and have gained general acceptance among merchants may be taken into consideration where there is no applicable statutory provision.

Due to the rapidly evolving nature of commercial life, certain business practices may, over time, acquire the status of commercial custom. The Turkish Commercial Code also expressly refers to commercial customs and practices in certain circumstances, thereby allowing them to be applied where appropriate.

• Legal Doctrine

Legal doctrine refers to the scholarly opinions and academic writings produced by legal scholars and academics. Although doctrinal opinions are not legally binding, they play an important role in the interpretation, development, and evolution of business law in Turkey.

Turkish courts may rely on doctrinal opinions, particularly when dealing with complex or controversial legal issues, to support the interpretation of commercial legislation.

• International Treaties

International treaties are an important source of trade law in Turkey, particularly in relation to cross-border commercial transactions. With the expansion of global trade, numerous international conventions have been adopted to regulate commercial relationships between companies operating in different countries.

One of the most significant international instruments is the United Nations Convention on Contracts for the International Sale of Goods (CISG), which establishes the legal rules governing international contracts for the sale of goods.

International treaties to which Turkey is a party may be directly applicable in the resolution of commercial disputes when the legal requirements for their application are satisfied. Accordingly, such treaties constitute an important source of business law in Turkey and contribute to the regulation of international commercial relations.

WHAT IS THE SCOPE OF BUSINESS LAW IN TURKEY?

Business law in Turkey is a comprehensive branch of law that regulates the activities of commercial enterprises, the legal relationships between merchants, and the functioning of commercial life. Aiming to ensure that commercial activities are conducted in a secure, orderly, and predictable manner, business law in Turkey encompasses numerous legal fields, including company law, commercial contracts, competition law, international trade law, and commercial enterprise law.

• Company Law

Corporate law in Turkey is one of the most comprehensive and frequently practiced areas of commercial law in Turkey. It governs the incorporation, operation, and dissolution of commercial companies, including joint stock companies, limited liability companies, general partnerships, limited partnerships, and cooperatives.

The principal areas covered by company law include company formation procedures in Turkey, capital structures, the rights and obligations of shareholders, the duties and powers of corporate governing bodies, general assembly procedures, mergers and acquisitions, capital increases and reductions, and liquidation procedures.

• Commercial Contracts

Commercial contracts form the foundation of commercial life. The legal relationships between merchants and companies are established primarily through contractual arrangements. Accordingly, contract law in Turkey constitutes one of the most significant components of business law.

Within this framework, employment contracts used in businesses’ human resources operations and termination processes involving dismissed employees, contracts for the sale of goods, service agreements, distribution agreements, dealership agreements, franchise agreements, agency agreements, licensing agreements, and other types of commercial contracts are all governed by business law in Turkey.

Contracts for the sale of goods, service agreements, distribution agreements, dealership agreements, franchise agreements, agency agreements, licensing agreements, and other commercial contracts also fall within this scope. Commercial law in Turkey regulates the drafting, interpretation, performance, and legal consequences arising from the breach of these contracts.

• Competition Law and Unfair Competition

Competition law in Turkey aims to protect fair competition in the marketplace and ensure that economic activities are conducted under fair market conditions. For a free market economy to function effectively, businesses must comply with the applicable competition rules.

Accordingly, issues such as unfair competition practices, anti-competitive agreements, the abuse of a dominant position, cartels, and the review of mergers and acquisitions fall within the scope of competition law in Turkey. The protection of competition contributes to safeguarding the interests of both businesses and consumers.

• International Trade Law

International trade law encompasses the legal rules governing commercial relationships between natural and legal persons located in different countries. As global trade continues to expand, the importance of this area of commercial law in Turkey has increased significantly.

Export transactions, import transactions, international sales contracts, delivery terms, payment methods, international commercial disputes, foreign investment transactions, and international arbitration are among the principal areas of international trade law in Turkey. This field establishes the rights and obligations of the parties involved in cross-border commercial relationships, thereby providing legal certainty in international business transactions.

• Commercial Enterprise Law

Commercial enterprise law in Turkey regulates the legal relationships that arise throughout the entire lifecycle of a commercial enterprise, from its establishment to its termination. The transfer of a commercial enterprise, the conduct of its business activities, and the legal structure of the commercial organization constitute the core subjects of this field.

Within this scope, matters such as registration with the trade registry, trade names, business names, commercial representatives, commercial agents (commercial attorneys-in-fact), the keeping of commercial books, current account relationships, bankruptcy, concordat (court-approved debt restructuring), and other commercial enterprise transactions fall within the scope of business law in Turkey.

• Negotiable Instruments Law

Negotiable instruments law in Turkey is one of the major sub-branches of commercial law. Negotiable instruments are documents embodying rights that cannot be asserted or transferred independently of the instrument itself. In practice, the most commonly used negotiable instruments are cheques, promissory notes (bills of exchange payable to order), and bills of exchange.

Negotiable instruments law in Turkey regulates the issuance, transfer, collection, endorsement, statutory limitation periods, and disputes arising from negotiable instruments. Negotiable instruments perform a vital function in ensuring that commercial life operates securely and efficiently.

• Transportation and Insurance Law

Transportation law governs the legal relationships arising from the transportation of goods and passengers. The rights and obligations of carriers and consignors in road, maritime, air, and rail transportation are evaluated within the scope of this field.

Insurance law, on the other hand, regulates insurance contracts, the legal relationship between the insurer and the policyholder, and the rights and obligations of the parties when an insured risk materializes. Insurance law in Turkey plays a significant role in protecting businesses against the risks that may arise during commercial activities, making it an important component of business law in Turkey.

WHAT ARE COMMERCIAL LAWSUITS IN TURKEY?

Commercial lawsuits in Turkey are legal proceedings in which disputes arising between commercial enterprises or from the status of being a merchant are resolved before the commercial courts. Under the Turkish legal system, commercial lawsuits are primarily governed by the Turkish Commercial Code No. 6102 and the Code of Civil Procedure No. 6100.

Commercial lawsuits in Turkey cover a broad range of disputes, including breaches of commercial contracts, compensation claims, company disputes, bankruptcy and concordat proceedings, and commercial debt recovery actions. The prompt, predictable, and expert resolution of these disputes is of great importance for maintaining the security of commercial life and economic stability.

In Turkey, commercial lawsuits are generally heard before the commercial courts, which are specialized courts staffed by judges with expertise in commercial law. This specialization aims to ensure that commercial disputes are resolved more efficiently and with a higher level of technical accuracy.

In addition to litigation, alternative dispute resolution (ADR) methods also play an important role in resolving commercial disputes in Turkey. In particular, mediation and arbitration are frequently preferred as effective mechanisms for the resolution of commercial disputes in Turkey.

Some of the most common types of commercial lawsuits in Turkey are outlined below.

• Lawsuits Arising from Breaches of Commercial Contracts in Turkey

Commercial contract disputes in Turkey arise when one or more parties fail to comply with the terms of a contract concluded within a commercial relationship. Matters such as failure to deliver goods, defective or incomplete performance, failure to properly perform services, and other breaches of contractual obligations fall within this category. These lawsuits represent one of the most common types of commercial disputes in Turkey encountered in commercial life.

• Commercial Compensation Lawsuits in Turkey

Compensation lawsuits are filed to recover losses suffered by one party as a result of the unlawful acts of another. Circumstances such as unfair competition, the delivery of defective products, breach of contract, or damage to commercial reputation may give rise to liability for compensation. The primary purpose of these lawsuits is to ensure that the injured party receives financial compensation for the damages suffered.

• Agency, Dealership, and Distributorship Disputes in Turkey

Disputes arising from agency, dealership, and distributorship relationships are among the most common types of commercial lawsuits in Turkey. These disputes generally arise as a result of the termination of long-term commercial relationships, breach of contract, or the wrongful termination of contractual agreements.

In particular, disputes involving commission claims, portfolio compensation (goodwill indemnity), lawful or unlawful termination of contracts, violations of territorial exclusivity, breaches of non-compete obligations, and issues arising from supply relationships constitute the principal subjects of this type of litigation. Such disputes frequently involve high-value compensation claims and commercial receivables.

• Intellectual and Industrial Property Lawsuits in Turkey

Intellectual and industrial property lawsuits in Turkey arise from infringements of rights relating to trademarks, patents, industrial designs, and copyrights. Trademark infringement, patent infringement, unauthorized use of intellectual property, and counterfeit products are among the primary issues addressed in these proceedings. These lawsuits are particularly significant in industries where market competition is intense and intellectual property rights play a crucial role.

• Competition Law Lawsuits in Turkey

Competition law lawsuits in Turkey arise from conduct that violates the principles of fair competition in the marketplace. Matters such as cartels, abuse of a dominant position, anti-competitive agreements, and acts of unfair competition fall within the scope of these proceedings. Such cases may involve both investigations and decisions of the Turkish Competition Authority as well as judicial proceedings before the competent courts.

• Bankruptcy and Concordat Proceedings in Turkey

Bankruptcy proceedings in Turkey concern the liquidation of the assets of merchants who are unable to satisfy their financial obligations. Concordat proceedings, on the other hand, are intended to enable a financially distressed business to restructure its debts through an agreement with its creditors while continuing its commercial activities.

These proceedings are of critical importance to commercial life, particularly during periods of economic uncertainty or financial crisis, as they provide legal mechanisms for the protection of both debtors and creditors under business law in Turkey.

• Company Law Disputes in Turkey

Company law disputes in Turkey involve legal conflicts arising between shareholders, company directors, or other corporate bodies. Matters such as the annulment of general assembly resolutions, shareholder disputes, the liability of board members, and the dissolution of companies fall within this category of commercial lawsuits in Turkey.

• Maritime Commercial Law Disputes 

Maritime commercial law disputes arise from maritime activities, including ship charter agreements, cargo transportation, maritime accidents, and marine insurance. In particular, issues relating to liability and damages arising from international maritime transportation are evaluated within this field.

In the context of maritime transportation, the rights of seafarers also constitute an important subfield, intersecting both transportation law and commercial law in Turkey.

• International Trade Disputes

International commercial disputes arise from commercial relationships between parties located in different countries. In such disputes, international arbitration, ICC arbitration, and other alternative dispute resolution (ADR) mechanisms are frequently preferred.

Disputes relating to export and import contracts, international trade transactions, and cross-border delivery obligations are among the principal matters addressed in this area.

• Tax Disputes in turkey

Tax disputes in Turkey arise from disagreements between commercial enterprises and the tax authorities. Matters such as tax penalties, tax assessments, tax incentives and deductions, the tax liability of shareholders and company directors for corporate tax debts, and tax refund claims constitute the primary subjects of these proceedings in Turkey. Obtaining tax law advice in Turkey is particularly important when managing and resolving tax disputes effectively.

The scope of commercial lawsuits in Turkey is extensive due to the diverse nature of commercial activities. Each category of commercial litigation is governed by its own legal procedures, substantive rules, and judicial assessment criteria. For this reason, successfully managing and resolving commercial disputes requires specialized knowledge and experience in business law in Turkey.

IS MEDIATION MANDATORY IN COMMERCIAL LAWSUITS IN TURKEY?

The mediation process in commercial lawsuits in Turkey was introduced into the Turkish legal system by Law No. 7155 and entered into force on 1 January 2019 as a form of mandatory pre-litigation mediation (a condition of litigation) in certain commercial disputes. With this regulation, parties are required to apply to a mediator before filing a lawsuit in specific types of commercial disputes in Turkey, particularly those involving claims for receivables and compensation.

Under the Turkish Commercial Code and relevant legislation, mediation has become a mandatory prerequisite for filing a lawsuit in cases involving claims for payment of a specific amount of money, such as debt recovery and compensation claims. Accordingly, in order to initiate a lawsuit, the parties must first complete the mediation process and obtain a final mediation report. Otherwise, any lawsuit filed without fulfilling this requirement will be dismissed on procedural grounds due to the absence of a condition of litigation.

During the mediation process, the parties attempt to resolve their dispute with the assistance of an independent mediator before going to court. If an agreement is reached at the end of the process, a legally binding mediation settlement agreement is prepared, and the dispute is terminated. If no agreement is reached, the parties regain the right to file a lawsuit in Turkey.

The mediation period is generally completed within six weeks from the date of application, and may be extended by an additional two weeks in exceptional circumstances. During this period, negotiations are conducted between the parties, and the possibility of settlement is evaluated. In addition, statutes of limitation are suspended and limitation periods do not run during the mediation process, thereby preventing any loss of rights.

In conclusion, mandatory mediation in commercial disputes in Turkey is an important alternative dispute resolution mechanism aimed at resolving commercial conflicts in a faster, more cost-effective, and amicable manner under business law in Turkey.

WHAT IS A COMMERCIAL CONTRACT?

Commercial contracts are legal agreements that regulate the legal relationships established between merchants and commercial enterprises, creating mutual rights, obligations, and liabilities for the parties. Although these contracts are prepared in accordance with the principle of freedom of contract, they must also comply with mandatory provisions of law and the requirements of commercial practice under business law in Turkey.

Commercial contracts ensure that economic relationships between merchants are conducted in a secure, predictable, and legally certain manner. In this context, the proper drafting of contracts, the balanced allocation of risks, and the protection of the parties’ interests constitute the primary objectives of commercial contract law. Today, companies and merchants are connected through an extensive network of commercial agreements at both the national and international levels.

The most common types of commercial contracts include mergers and acquisitions (M&A) agreements, sales contracts, distributorship agreements, dealership agreements, agency agreements, franchise agreements, licensing agreements, logistics and transportation agreements, lease agreements, loan and financing agreements, and service agreements. These contracts are designed to ensure that commercial activities are conducted efficiently while providing legal certainty between the parties.

The content of commercial contracts is of critical importance. Deficiencies, ambiguities, or provisions that disproportionately disadvantage one party may result in significant legal disputes and substantial financial losses in the future. For this reason, obtaining professional legal assistance during both the drafting and implementation of commercial contracts is essential for identifying and minimizing potential legal and commercial risks.

WHAT ARE THE TYPES OF COMMERCIAL CONTRACTS IN TURKEY?

Commercial contracts are agreements that form the legal foundation of commercial relationships and create rights and obligations between the parties. Under business law in Turkey, commercial contracts are drafted in accordance with the principle of freedom of contract, provided that they comply with the mandatory provisions of law. Commercial contracts cover a broad range of matters, from the sale of goods and services to intellectual property rights and strategic business partnerships.

The proper drafting of commercial contracts is of great importance in ensuring that risks are allocated fairly between the parties and that potential disputes are prevented. The most common types of commercial contracts in Turkey are explained below.

• Commercial Sales Agreement: A commercial sales agreement is a contract concluded between a seller and a buyer concerning the transfer of goods or services. Such agreements regulate matters including the purchase price, delivery terms, payment methods, warranties, and the rights and liabilities of the parties.
• Commercial Lease Agreement: A commercial lease agreement governs the transfer of the right to use movable property or real estate for a specified period in exchange for consideration. As part of Turkish real estate law, the tenant acquires the right to use the leased property while assuming the obligation to pay the agreed rent.
• License Agreement: A license agreement is a contract governing the use of intellectual and industrial property rights in Turkey. It regulates the granting of the right to use patents, trademarks, copyrights, or other intellectual property rights to third parties under specified terms and conditions.
• Supply Agreement: A supply agreement is a contract under which one party undertakes to provide specified goods or services on a regular basis. The agreement typically sets out detailed provisions regarding quantity, quality, delivery schedules, and payment terms.
• Franchise Agreement: A franchise agreement governs the right to use a brand’s business model, know-how, and commercial system under specified conditions. The franchisee obtains the right to operate under the franchisor’s brand while assuming the obligation to comply with predetermined operational standards.
• Agency Agreement: An agency agreement establishes the commercial relationship under which an agent represents and markets a company’s products or services within a specified territory. The commercial agent is responsible for identifying customers and facilitating the conclusion of contracts on behalf of the principal.
• Joint Venture Agreement: A joint venture agreement regulates the establishment of a collaborative business structure between two or more companies for a specific project or commercial activity. Such agreements determine the profit-sharing arrangements, management structure, and allocation of responsibilities between the parties.
• Consultancy Agreement: A consultancy agreement governs the provision of professional advisory services by an expert or consultant in a particular field. The agreement typically specifies the scope of services, duration, fees, and responsibilities of the parties.
• Non-Disclosure Agreement (NDA): A Non-Disclosure Agreement (NDA) is intended to protect trade secrets and confidential information exchanged during commercial relationships. Such agreements safeguard confidential information by regulating the parties’ use of information and non-disclosure obligations.
• Corporate Services Agreement: A corporate services agreement is a type of commercial contract under which one company agrees to provide a particular service to another company on a continuous, recurring, or project-specific basis. These agreements are commonly used for consultancy services, software development, information technology (IT) services, accounting, human resources, marketing, and outsourcing services.
• Dealership and Distributorship Agreements: Dealership and distributorship agreements regulate the commercial relationship between a manufacturer or supplier and a dealer or distributor responsible for selling and distributing products within a specified territory. These agreements play a critical role in establishing commercial distribution networks and ensuring that products are effectively introduced to the market. They constitute an important part of commercial law in Turkey and are widely used in both domestic and international commercial transactions.

HOW TO PREPARE A COMMERCIAL CONTRACT IN TURKEY?

Commercial contracts are legally binding documents that define the rights and obligations of the parties in commercial relationships and produce binding legal consequences. Therefore, the process of preparing a contract is not limited to simple text drafting; it also involves a legal, commercial, and strategic assessment process under business law in Turkey.

The first stage of preparing a commercial contract in Turkey is the negotiation process between the parties. At this stage, the parties determine their commercial expectations, risks, and mutual obligations, thereby establishing the basic framework of the contract. The negotiation phase is of great importance in preventing potential future disputes.

Following negotiations, a draft contract is prepared. At this stage, the fundamental elements of the contract are determined, including party information, subject matter, price, payment terms, duration, delivery conditions, and liability provisions. The draft contract serves as a working document that can be revised by the parties before it is finalized.

Once the parties reach mutual agreement, the final contract text is prepared, signed, and enters into force. At this stage, the contract becomes a legally binding document reflecting the true intent of the parties.

One of the most important aspects of preparing commercial contracts in Turkey is the principle of compliance with legislation. Contractual provisions must not be contrary to the Turkish Code of Obligations, the Turkish Commercial Code, or other relevant regulations. Otherwise, certain provisions of the contract may be deemed invalid or may lead to serious legal disputes in the future.

For this reason, during the preparation of commercial contracts in Turkey, obtaining support from a qualified legal professional is of great importance in order to ensure both proper commercial risk management and legal validity.

• What Are The Legal Considerations When Drafting Commercial Contracts in Turkey?

Commercial contracts concluded by companies in the course of their business activities are among the most fundamental instruments ensuring legal and financial security of enterprises. Contracts that are not prepared in accordance with the relevant legislation, primarily the Turkish Commercial Code (TCC) and the Turkish Code of Obligations (TCO), may lead to significant financial losses and long-lasting legal disputes. In this respect, merchants who are subject to the obligation to act as a prudent merchant must pay attention to the following critical issues when preparing and signing commercial contracts under business law in Turkey.

1. Determination of Legal Capacity of the Parties

Clearly identifying the parties to the contract without any ambiguity is the first essential requirement for the validity of the agreement in Turkey.

• Verification of Trade Registry Records: The contract must include not only the trade names of the parties but also their MERSIS numbers, up-to-date records in the Trade Registry Gazette, tax office details, and full addresses.
• Review of Representation Authority: It must be strictly verified whether the persons signing the contract are authorized to represent and bind the company. This should be confirmed through signature circulars and authorization documents. Contracts signed by unauthorized representatives may not bind the company under commercial law in Turkey.

2. Clarification of Contract Subject Matter and Obligations

The essential obligations and commitments forming the core of the contract must be defined in a clear, precise, and unambiguous manner. Any vague wording may be interpreted against the party in the event of a dispute before a court or arbitral tribunal. The expectations of the parties and the scope of the work must be clearly defined.

In long-term commercial relationships such as distributorship, dealership, franchise, or joint venture agreements, special attention must be given to:

• cooperation terms between the parties,
• profit and loss distribution,
• limitations on subcontracting,
• and rules regarding joint and several liability for third-party damages.

3. Detailed Regulation of Contractual Terms

The operational framework of the contract must be comprehensively regulated:

• Financial Provisions: Payment terms, due dates, payment methods, default interest rates, currency fixation, or protection against exchange rate fluctuations must be clearly defined.
• Logistics and Delivery: Delivery timelines, force majeure events, nature of goods or services, acceptance and inspection procedures, and penalty clauses must be clearly regulated.

4. Confidentiality (NDA), Non-Compete, and Non-Solicitation Clauses

Protecting trade secrets, customer portfolios, and know-how is critical for business continuity.

• Non-Disclosure Agreement (NDA): The scope of confidential information, duration of confidentiality obligations during and after termination, and strong penalty clauses for breaches must be clearly defined.
• Non-Compete and Non-Solicitation Clauses: In accordance with mandatory provisions of the Turkish Code of Obligations, such restrictions must be reasonable in terms of duration, geographic scope, and activity field, and must comply with principles of fairness under business law in Turkey.

5. Dispute Resolution Methods and Jurisdiction Clause

A clear dispute resolution clause must be included to ensure efficient handling of potential disputes. Parties may choose:

• state courts,
• arbitration (a faster and specialized mechanism), or
• mandatory/voluntary mediation.

The competent court or arbitration center must be explicitly stated in the contract.

6. Compliance with Mandatory Law and Applicable Legislation

The principle of freedom of contract is not absolute in Turkey. Contractual provisions must comply with the mandatory rules of:

• the Turkish Commercial Code,
• the Turkish Code of Obligations,
• the Personal Data Protection Law (KVKK),
• and competition law regulations.

Provisions contrary to mandatory law, public order, or morality are considered absolutely void (null and void ab initio) in Turkey.

7. Amendment and Revision Procedures

Contracts may require updates due to changing economic conditions, legislative amendments, or developments in commercial relationships. Therefore, it is essential to include a strict clause stating that:

• all amendments and addenda must be made in writing, and
• must be signed by authorized representatives to be valid.

8. Evidentiary Considerations in Contract Formation

For evidentiary purposes in commercial disputes in Turkey:

• contracts should be executed in written form,
• each page should be initialed by the parties,
• and signed with wet signatures or secure electronic signatures.

In addition, matters such as stamp duty obligations, potential fees, the number of original copies, and distribution of copies must be clearly specified.

9. Professional Legal Support in Company and Contract Law

Commercial contracts should not be prepared using standard templates; instead, they must be tailored to the specific dynamics of each company (tailor-made drafting). Preventing high-value litigation depends directly on the legal precision applied during contract drafting in Turkey.

Therefore, obtaining professional legal support from a commercial law attorney in Turkey, and where cross-border elements exist, from an international business law specialist, is essential to safeguard the future of companies and commercial enterprises under business law in Turkey.

• What Are the Common Mistakes in Commercial Contracts in Turkey?

In practice, it is frequently observed that companies and merchants rush the contract drafting stage due to the motivation to quickly commence commercial activities, and as a result, they make several critical mistakes. From the perspective of Turkish commercial contract law, the most common errors that jeopardize commercial relationships and may cause irreparable damages at the litigation stage are as follows:

1. Use of Online Templates or Standard Form Contracts

Each commercial relationship has its own unique dynamics, risks, delivery conditions, and financial structure. The use of pre-prepared contract templates downloaded from the internet, which may belong to another company or sector, fails to protect the specific legal interests of the business.

Such contracts often do not align with the operational realities of the company and therefore become completely ineffective in the event of a dispute under business law in Turkey.

The same risk also applies to contracts drafted using artificial intelligence tools. AI systems may sometimes produce so-called “hallucinations”, including non-existent legal provisions, incorrect statutory references, or legally inaccurate interpretations.

2. Inclusion of Excessively High Liquidated Damages Clauses

Pursuant to Article 22 of the Turkish Commercial Code (TCC), a debtor who has the status of a merchant cannot request a reduction of a liquidated damages clause on the grounds that it is excessive.

While under general contract law (Turkish Code of Obligations – TCO) judges have the authority to reduce excessive penalty clauses, this protective mechanism is significantly limited in commercial contracts where both parties are merchants.

Therefore, disproportionately high penalty clauses included without proper legal assessment may become one of the most serious risks, potentially even leading to financial distress or bankruptcy of a company.

3. Ignoring Language Conflicts in Multilingual Contracts

In international or foreign-element commercial relationships, contracts are often drafted in two parallel languages, most commonly Turkish and English.

One of the most common and critical mistakes is failing to clearly specify which language version will prevail in case of any discrepancy between the two texts (the “prevailing language clause”).

Without such a clause, conflicting interpretations between language versions may lead to serious legal uncertainty and disputes in the enforcement of the contract under commercial law in Turkey.

Legal Notice: In accordance with Law No. 805 on the Compulsory Use of the Turkish Language in Economic Enterprises, it is mandatory for Turkish companies, in transactions between themselves within Türkiye, to use the Turkish language. Therefore, the choice of governing language / language precedence clause must be carefully drafted by a qualified legal professional.

4. Failure to Include a “Severability / Invalidity” Clause

If a single provision in a commercial contract violates mandatory provisions of applicable law or regulations (such as Personal Data Protection Law or Competition Law), and unless otherwise agreed, this may result in the invalidity of the entire contract (absolute nullity).

The absence of a severability clause is a common mistake. When such a clause is included, even if one provision is declared invalid by a court, the remaining provisions of the contract continue to bind the parties, thereby ensuring the continuation of the commercial relationship.

5. Superficial Drafting of Force Majeure Clauses

Events beyond the control of the parties—such as pandemics, economic crises, wars, port blockages, or legislative changes—should not be addressed with generic or superficial wording.

The force majeure clause must clearly define:

• which events are considered force majeure,
• notification obligations and time limits,
• and the duration after which the contract may be terminated without liability for damages.

Failure to properly structure these provisions may lead to serious legal uncertainty under business law in Turkey.

6. Reliance on Unauthorized Signatories

Company managers or employees may not always have unlimited authority to bind the company in Turkey. Therefore, signature authority limits set out in the signature circular must be carefully verified, such as:

• “A is authorized alone,”
• “B and C must sign jointly,”
• or “Board resolution is required for transactions exceeding 500,000 TRY.”

Contracts signed without proper authorization may be deemed invalid or unenforceable, exposing parties to significant legal risks under commercial law in Turkey.

7. Failure to Determine Stamp Duty and Contract Costs Allocation

Commercial contracts in Turkey are subject to stamp duty, either ad valorem or fixed. In practice, failure to determine which party bears this tax, how it will be declared to the tax authority, or whether it will be shared often creates disputes and trust issues at the very beginning of the relationship. Moreover, unpaid stamp duty may result in penalties and additional financial burdens when the contract is submitted as evidence in court proceedings in Turkey.

Similarly, practices such as underreporting the sale price in real estate transactions to reduce costs in Turkey may later lead to tax assessments and VAT penalties, creating significant financial exposure for companies under business law in Turkey.

WHAT ARE THE TERMINATION CONDITIONS OF COMMERCIAL CONTRACTS IN TURKEY?

Commercial contracts concluded freely under the principle of freedom of contract in Turkey may be terminated through mutual agreement of the parties (rescission by mutual consent / settlement termination), expiration of the contractual term, or the exercise of a right of termination with cause or ordinary termination by one of the parties. However, termination of a commercial contract in Turkey does not merely mean the end of a legal relationship; it may also give rise to penalty clauses, compensation obligations, and complex settlement of outstanding performance obligations. For this reason, the proper structuring of termination mechanisms and default rules at the drafting stage is of critical importance under commercial law in Turkey.

1. Termination Mechanisms and Conditions in Commercial Contracts in Turkey

To avoid legal defects in termination processes, the termination conditions must be drafted in a clear, specific, and unambiguous manner in contracts governed by commercial law in Turkey. In practice, commercial contracts generally include three main termination mechanisms:

• Ordinary Termination (Termination with Notice): Ordinary termination in Turkey applies to indefinite-term contracts or contracts that are renewable. In such cases, either party may terminate the contract without providing justification, provided that a notice period (termination notice period) stipulated in the contract is observed.
• Termination for Just Cause (Immediate Termination): This is the right of a party to terminate the contract immediately in Turkey when the other party commits a material breach of contractual obligations, violates essential duties, or acts contrary to the principle of good faith. Typical examples of just cause may include delayed payment, breach of confidentiality obligations, insolvency or bankruptcy situations. The definition of “just cause” may be drafted either as a closed list (exhaustive) or as an illustrative list in the contract.
• Mutual Termination (Rescission Agreement / Termination Protocol): Parties may mutually agree to terminate the contract at any time by signing a termination protocol or rescission agreement in Turkey. In this case, the terms of termination—including payment obligations, settlement arrangements, and any remaining duties—are freely determined by the parties.

2. Default of the Debtor and Notice Requirement (Turkish Code of Obligations Article 117)

One of the most common grounds triggering termination or compensation claims in commercial contracts in Turkey is default of the debtor (mora debitoris).

Under Article 117 of the Turkish Code of Obligations (TCO), a debtor of a due obligation enters into default only upon notice by the creditor, unless otherwise provided by law.

For debtor default to occur, two conditions must be met simultaneously:

• The debt must be due (matured / enforceable)
• The creditor must issue a notice (demand for performance)

Exception: Fixed Due Date (TCO Article 117/2)

To ensure speed and legal certainty in commercial transactions in Turkey, the legislator provides an important exception.

If the parties have clearly agreed on a specific due date for performance (e.g., “payment shall be made on the 5th of each month” or “delivery shall take place on 15 October 2027”), then no separate notice is required in Turkey.

In such cases, once the fixed due date arrives, the debtor automatically falls into default without any further notification requirement. From that moment, the creditor may:

• claim default interest,
• demand specific performance, or
• initiate contractual termination procedures under the contract.

In conclusion, termination of commercial contracts in Turkey is a highly sensitive legal process that must be carefully structured in advance to avoid serious financial and legal consequences under commercial law in Turkey.

3. Form Requirement for Termination Notices Between Merchants (TCC Article 18/3)

Even if the termination conditions in the contract are perfectly regulated, if the method of notifying the termination to the counterparty is contrary to the law, the termination may be considered invalid in Turkey. Pursuant to Article 18/3 of the Turkish Commercial Code (TCC), the validity of notices and warnings aimed at placing the other party in default, terminating the contract, or withdrawing from the contract between merchants is subject to a strict formal requirement.

Important Legal Rule: Termination notices between merchants are legally valid only if made through a notary public, via registered mail or through the Registered Electronic Mail (KEP) system using a secure electronic signature. Even if the contract provides otherwise, termination notices made via ordinary email or WhatsApp may be deemed an improper termination before the court and may create a risk of compensation.

4. Contractual Provisions That Survive Termination