Planning to trade, supply, or partner with a company in Turkey, and unsure whether your agreement will actually hold up? Commercial contracts in Turkey are governed mainly by the Turkish Code of Obligations and the Turkish Commercial Code, and a well-drafted contract is enforceable in Turkish courts even when one party is foreign. Turkish law gives businesses wide freedom to set their own terms. A few rules on form, language, mandatory mediation and jurisdiction decide whether your contract protects you or costs you.
This guide explains how commercial contracts in Turkey for foreign businesses actually work: the governing law, the clauses that matter most, how to choose the language and forum, how disputes are resolved, and the mistakes that most often cause trouble. The figures and procedures here are current as of the time this article is written, and you should confirm the current position with a lawyer, because laws, court fees and thresholds change.
What Law Governs Commercial Contracts in Turkey?
Commercial contracts in Turkey are governed primarily by the Turkish Code of Obligations, with the Turkish Commercial Code applying when both sides are merchants. The Code of Obligations sets the general rules: offer and acceptance, performance, breach, penalties and termination. The Commercial Code adds rules that apply to companies and traders, and it changes some defaults. For example, between merchants a court will not reduce an agreed penalty the way it might for a private individual, so a business that signs up to a heavy penalty clause is usually held to it.
Turkish law follows freedom of contract. You and your counterpart can agree the price, the delivery terms, the payment schedule and the consequences of breach largely as you wish, provided the terms are not contrary to mandatory law, public order or morality. Good faith is binding, not a slogan. A party who acts dishonestly during negotiation or performance can be held liable even where the written contract says nothing.
Do Commercial Contracts in Turkey Have to Be in Writing?
Most commercial contracts in Turkey are valid without any written form, but several important agreements must be written, notarised or registered to take effect. A simple supply or service agreement can be formed by an exchange of emails, and it will bind both sides. The problem is proof, not validity.
- Real estate sales and transfers must be signed in official form before the Land Registry (Tapu ve Kadastro). A private sale contract does not transfer title.
- The transfer of shares in a limited liability company must be notarised and registered in the trade registry.
- A suretyship or personal guarantee has strict form rules, including that the guaranteed amount and date be handwritten, or it is void.
- Certain long leases and financial leasing contracts follow their own form requirements.
Even where the law allows a verbal deal, put it in writing. Under the Turkish Civil Procedure Code, claims above a modest monetary threshold generally cannot be proved by witness testimony alone, so a signed contract is often the only reliable evidence you will have if the relationship breaks down.
Key Clauses Every Foreign Business Should Include
The strongest business contracts in Turkey spell out what happens when things go wrong, not just when they go right. Turkish default rules fill gaps, but they rarely match what a foreign business would have chosen. Before you sign, check that the contract covers the following points.
- Governing law and jurisdiction. State which country’s law applies and which courts or arbitral body will hear a dispute.
- Language. Name the governing language where the text is bilingual, so one version controls if the translations differ.
- Payment and currency. Fix the currency, the due dates and any default interest. Note that some domestic contracts must be priced in Turkish lira.
- Delivery and risk. For goods, reference a clear Incoterms rule so the point at which risk passes is not left to guesswork.
- Penalty and liquidated damages. A penalty clause is enforceable and, between merchants, hard to reduce, so size it deliberately.
- Termination and force majeure. Set out how and when either side can exit, and what counts as an event beyond a party’s control.
- Confidentiality and intellectual property. Say who owns what, especially where designs, software or know-how change hands.
Governing Law and Language for Foreign Businesses
Foreign businesses can usually choose a foreign governing law for an international contract, but not for every issue. Under Turkish private international law, parties to a contract with a foreign element may select the law that governs their agreement, and Turkish courts will normally respect that choice. Some matters stay under mandatory Turkish rules regardless, including real property in Turkey, certain employment protections and company-law formalities. This is one reason commercial contracts in Turkey for foreign businesses are often drafted as bilingual documents, with Turkish law governing local performance and a foreign law or arbitration clause for the wider relationship.
Language deserves early attention. A contract written only in English is valid, but if a dispute reaches a Turkish court, the court works in Turkish and will require a sworn translation of the agreement and its key evidence. Business contracts in Turkey that are likely to be enforced locally are easier to run as bilingual Turkish and English texts, with a clause naming which language prevails. Whether a foreign-law clause actually helps you depends on where your counterpart’s assets sit and where you would need to enforce; a lawyer can assess that in a short consultation before you commit to a structure.
How to Enforce a Contract in Turkey
To enforce a contract in Turkey you generally move from a formal demand, through mandatory mediation, to court or enforcement proceedings. Knowing how to enforce a contract in Turkey before you sign helps you draft clauses that make the later steps faster. The usual path for a money claim looks like this.
- Send a formal notice, an ihtarname, through a notary, setting a deadline to perform or pay.
- Apply for mandatory commercial mediation. For most monetary commercial claims, mediation is a precondition to filing suit, and skipping it gets the case dismissed.
- If mediation fails, file suit in the Commercial Court of First Instance, or start enforcement proceedings (icra takibi) at the enforcement office where the debt is clear.
- Obtain the judgment or, in enforcement proceedings, deal with any objection the debtor files.
- Enforce the result through the enforcement office (icra dairesi), which can seize and sell assets to satisfy the debt.
Resolving Commercial Contract Disputes in Turkey
Commercial contract disputes in Turkey are resolved through mediation, litigation before the commercial courts, or arbitration, and the right choice depends on the contract and the counterpart. Mediation is fast and, for many money claims, mandatory before court. Litigation gives a binding, appealable judgment but takes longer. Arbitration is private and often chosen for larger cross-border deals, and Turkey enforces foreign arbitral awards under the New York Convention. In our practice at Karanfiloglu Law Firm, most commercial contract disputes in Turkey that clients bring to us turn on unclear payment or delivery terms rather than on any exotic point of law.
| Route | Typical use | Usual speed |
|---|---|---|
| Mediation | Money claims; keeping a relationship intact | Usually a few weeks |
| Litigation | Binding judgment; injunctions | Usually many months to a couple of years |
| Arbitration | Large or cross-border contracts | Varies, often faster than court |
Common Mistakes Foreign Businesses Make
Most contract problems foreign businesses face in Turkey trace back to a handful of avoidable drafting errors. Each one is cheap to fix before signing and costly to fix afterwards.
- No written contract at all. Relying on emails and invoices leaves you with weak proof. The fix is to sign a single, dated master agreement.
- Signatory has no authority. The person who signs may not bind the company. The fix is to check the trade registry and the signature circular (imza sirkuleri).
- No dispute-resolution clause. Silence sends you to a default court that may not suit you. The fix is to name the forum and the governing law.
- Ignoring the mandatory mediation step. Filing suit first gets the case thrown out. The fix is to budget time for mediation.
- English-only text with no Turkish version. The fix is a bilingual contract with a prevailing-language clause.
In our practice at Karanfiloglu Law Firm, the single most common reason a foreign company struggles to collect is that the contract was signed by someone without authority to bind the Turkish counterpart.
Costs and Timeline
The cost of dealing with commercial contracts in Turkey separates into official fees and professional fees, and both are modest at the drafting stage compared with a later dispute. Drafting or reviewing a contract mainly costs lawyer time. Enforcement and litigation carry official court fees, which for money claims are calculated as a percentage of the amount in dispute, plus notary charges for notices and any sworn translation costs. As a rough guide, a straightforward commercial case can run from several months to a couple of years through first instance and appeal, while mandatory mediation often concludes within a few weeks. These figures are current as of the time this article is written and should be confirmed with a lawyer, because court fees and thresholds change.
Commercial contracts in Turkey give foreign businesses real protection when they are drafted with care: the right governing law, a clear language clause, a workable dispute-resolution route and terms that anticipate breach. Turkish law rewards businesses that write their deals down and respect the mandatory mediation step, and it holds merchants to the terms they accept. Get the structure right before you sign, and enforcement, if it is ever needed, becomes far simpler.
Talk to a Lawyer in Istanbul
If you would like advice on your own situation, Karanfiloglu Law Firm is a registered law office in Istanbul serving foreigners and Turkish clients across Turkey. You can reach us by phone or WhatsApp at +90 532 659 35 11, by email at [email protected], or visit us at Mecidiyeköy Mah. Büyükdere Cad. No:67-71, Alba İş Merkezi, Kat:8, Şişli, İstanbul. Contact us to discuss your situation.
Frequently Asked Questions
Are commercial contracts in Turkey enforceable against a foreign company?
Yes, commercial contracts in Turkey can be enforced against a foreign company, provided the contract is valid and the Turkish court or arbitral body has jurisdiction. Where the foreign party has assets in Turkey, a Turkish judgment or enforcement order can reach them directly. Where the assets are abroad, you may need to enforce the judgment or arbitral award in that country.
Do commercial contracts in Turkey have to be in Turkish?
No, a commercial contract does not have to be in Turkish to be valid. A contract in English or any other language binds the parties. If a dispute goes before a Turkish court, though, the court works in Turkish and will require a sworn translation, so a bilingual text saves time and reduces the risk of a translation dispute.
Is mediation required before suing on a business contract in Turkey?
For most monetary commercial claims, mediation is a mandatory first step before you can file suit. If you skip it and go straight to court, the case is dismissed on procedural grounds. Mediation usually concludes within a few weeks, and if it fails you receive a report that lets you proceed to litigation.
Can we choose English law for a contract with a Turkish company?
In an international contract with a foreign element, the parties can usually choose a foreign governing law, and Turkish courts will normally respect that choice. Certain matters remain under mandatory Turkish law, such as rights over real property in Turkey and some company-law formalities. A lawyer can tell you which parts of your deal a foreign-law clause can and cannot cover.
How long does it take to enforce a contract in Turkey?
Enforcing a contract in Turkey usually takes anywhere from a few weeks to a couple of years, depending on the route. A clear debt pursued through enforcement proceedings can move quickly if the debtor does not object. A contested claim that goes through mediation, first-instance court and appeal takes considerably longer. Well-drafted clauses shorten the process.
What makes a penalty clause enforceable in Turkey?
A penalty clause is enforceable when it is clearly written and agreed by both parties. Between merchants, Turkish courts are reluctant to reduce an agreed penalty, so businesses are generally held to the figure they signed. For non-merchant parties, a court has more room to lower a penalty it considers excessive.
Do we need a notary to sign a commercial contract in Turkey?
Most commercial contracts do not need a notary and take effect once both sides sign. Some agreements are exceptions, including share transfers in a limited liability company and certain guarantees, which require notarisation or official form. When in doubt, confirm the form requirement before signing, because a defect in form can make the agreement unenforceable.
About the Author
Kaan Karanfiloğlu is the founder of Karanfiloglu Law Firm, an Istanbul-based registered law office serving Turkish and international clients across Turkey. He is a lawyer registered with the Istanbul Bar Association (Reg. No. 58270) and the Union of Turkish Bar Associations (No. 133074), and has practised law in Turkey since 2017. He holds an LL.B. from Galatasaray University Faculty of Law (2016) and advises clients in Turkish, English and French; the firm also serves clients in Russian and Chinese with experienced in-office translators.
Disclaimer: This article provides general information about Turkish law and is not legal advice. Laws, regulations, official fees and procedures change over time and every situation is different. For advice on your specific circumstances, please consult a qualified lawyer. No liability is accepted for any loss arising from reliance on the information in this article.
