Short answer
The issues most often overlooked in commercial contracts are:
- The other party’s signing authority
- Vague scope of work
- Delivery and payment terms
- Delay and penalty clauses
- Limits of liability
- Confidentiality and personal data
- Termination terms
- Dispute resolution
The validity of these clauses depends on the type of contract and on mandatory rules of Turkish law. For example, exclusion of liability for gross negligence cannot be agreed in advance (Turkish Code of Obligations, Art. 115). A merchant also cannot ask the court to reduce a contractual penalty on the ground that it is excessive (Turkish Commercial Code, Art. 22). No single template gives the right result for every company.
1. Parties and signing authority
The company’s trade name, address and registry details should be stated correctly, and the signatory’s power of representation should be checked. Under Article 371 of the Commercial Code, restrictions on representative authority are, as a rule, not effective against third parties acting in good faith. However, registered and published restrictions limiting authority to the head office or a branch, or requiring joint signature, are valid. In practice, the signature circular (imza sirküleri) and trade registry records should therefore be checked.
2. Scope of work, delivery and payment terms
- Scope: The technical specifications, quantity, acceptance criteria and approval process for the goods or services should be clearly stated.
- Delivery: The place and date of delivery, packaging, transport and the moment at which risk passes should be determined.
- Payment: The amount, currency, due date, invoicing terms and payment schedule for partial deliveries should be clarified.
3. Delay and penalty clauses
If a penalty is agreed for non-performance or improper performance, then, unless the contract indicates otherwise, the creditor may demand either performance of the obligation or the penalty. If the penalty is agreed for failure to perform at the agreed time or place, the creditor may demand the penalty together with the main obligation (Code of Obligations, Art. 179).
The judge reduces, of its own motion, a penalty it considers excessive (Art. 182/3). However, a debtor who is a merchant may not ask the court to reduce a contractual penalty on the ground that it is excessive (Commercial Code, Art. 22). Companies should therefore assess the penalty amount carefully before signing.
Claiming a delay penalty together with performance requires that the creditor has neither expressly waived the penalty nor accepted performance without reservation (Article 179(2)). Even for a merchant, a penalty causing economic ruin and contrary to good morals may be reviewed for partial or total invalidity under Article 27; a high amount alone is insufficient.
4. Limits of liability
Code of Obligations, Art. 115/1: An agreement made in advance that the debtor will not be liable for its gross negligence is absolutely null and void.
Under the same article, in a service requiring expertise that may be carried out only with a licence granted by law or the competent authority, an advance exclusion of liability for slight negligence is also absolutely void. Clauses such as liability caps, exclusion of indirect damage and insurance obligations should be drafted within these mandatory limits.
5. Confidentiality and personal data
The definition of confidential information, the duration of confidentiality and the return or destruction of information at the end of the contract should be stated. If personal data is processed under the contract, the roles of data controller and data processor should be identified. Where personal data is processed on its behalf by another person, the data controller is jointly responsible with that person for taking data security measures (Personal Data Protection Law No. 6698, Art. 12/2). Obligations such as security measures and data breach notification should therefore be addressed in the contract.
6. Termination, notices and dispute resolution
- Grounds and periods for termination: Which breach gives a right to terminate, and the notice and cure period, should be clearly stated.
- Form of notice: Between merchants, notices or warnings to place the other party in default, to terminate or to rescind the contract are made through a notary, by registered letter, by telegram or by registered electronic mail (KEP) using a secure electronic signature (Commercial Code, Art. 18/3).
- Jurisdiction agreement: Merchants or public legal entities may agree to give jurisdiction to one or more courts for disputes between them; unless otherwise agreed, the lawsuit may be filed only in those courts (Code of Civil Procedure, Art. 17).
- Mediation: In commercial cases concerning a sum of money, applying to a mediator before filing a lawsuit is a precondition (Commercial Code, Art. 5/A).
7. Standard texts and general terms and conditions
Clauses prepared in advance and unilaterally by one party for use in many similar contracts are general terms and conditions (Code of Obligations, Art. 20). Such terms that are against the other party’s interest are deemed unwritten unless the other party was clearly informed of them, given the opportunity to learn their content, and accepted them (Art. 21). Moreover, provisions against the other party that are contrary to good faith may not be included (Art. 25). Signing a ready-made template does not mean that its clauses will be valid in every case.
8. Hypothetical example from contract manufacturing
Hypothetical example: A textile company signs a contract with a contract manufacturer (fason üretici) for the production of a certain quantity of goods. The contract does not specify fabric characteristics or acceptance criteria. It sets a very high daily penalty for late delivery and states that the manufacturer will not be liable for any fault. Four problems arise:
- Vague acceptance criteria may lead to a dispute over defects.
- A manufacturer that is a merchant may be unable to ask for the high penalty to be reduced (Commercial Code, Art. 22).
- The exclusion of liability for gross negligence is absolutely void (Code of Obligations, Art. 115).
- If personal data such as customer lists is shared, data security obligations must be addressed separately.
This example is not based on a real file; the outcome depends on the contract as a whole and the specific circumstances.
9. Pre-signing checklist
- Party details, signature circular and trade registry record
- Scope of work, technical specification and acceptance criteria
- Delivery, passing of risk, payment and invoicing terms
- Amount and nature of delay and penalty clauses
- Compliance of liability limits with mandatory rules
- Confidentiality, personal data and information security clauses
- Termination grounds, form of notice and periods
- Competent court or arbitration, mediation
10. Frequently asked questions
Does a company manager’s signature always bind the company?
The power of representation and any registered restrictions should be checked. Certain registered and published restrictions are effective even against third parties acting in good faith.
Will the court reduce an excessive penalty clause?
Under the general rule, the judge reduces an excessive penalty of its own motion. However, a debtor who is a merchant may not request a reduction on the ground that it is excessive.
Is a clause stating “we are not liable under any circumstances” valid?
An advance exclusion of liability for gross negligence is absolutely void, and there are mandatory limits in other cases as well.
Can I send a termination notice by e-mail?
Article 18(3) of the Turkish Commercial Code provides for a notary, registered letter, telegram or KEP with a secure electronic signature for termination notices between merchants. This rule concerns proof; an ordinary email is not automatically invalid in every case. Contractual form requirements, evidence of receipt and the particular facts must be assessed together.
Is a standard contract template enough?
The validity of clauses depends on the type of contract and mandatory rules. General terms and conditions are subject to separate review.
11. Sources
- Turkish Code of Obligations No. 6098 (Turkish): Arts. 20, 21, 25, 115, 179, 182
- Turkish Commercial Code No. 6102 (Turkish): Arts. 5/A, 18, 22, 371
- Code of Civil Procedure No. 6100 (Turkish): Art. 17
- Personal Data Protection Law No. 6698: Art. 12
This article provides general information and does not replace a review of the specific facts and documents. Current legislation and case-specific circumstances require separate assessment.