Under Turkish law, contracts are generally not subject to any particular form, but certain contracts, such as the sale of real estate, personal guarantees and promises to donate, are invalid if the form required by law is not observed. If a debtor fails to perform on time, the creditor can, under the rules on default, claim performance with damages for delay or withdraw from the contract. Tort claims are generally time-barred two years after the injured party learns of the damage, while contractual claims are generally time-barred after ten years. A well-drafted contract prevents most disputes.
The law of obligations in Turkey
The law of obligations governs legal relationships in which one person can require another to give, do or refrain from doing something. Its main source is the Turkish Code of Obligations No. 6098 (TBK). Obligations arise from three main sources:
- Contract: sale, lease, works (construction), service, agency, guarantee, loan and other relationships created by the parties' agreement
- Tort: causing damage to another through wrongful and unlawful conduct (TBK, Art. 49 et seq.)
- Unjust enrichment: enrichment from another's assets without a legal ground (TBK, Art. 77 et seq.)
These general rules also underlie many other areas: tenancy, employment contracts, commercial contracts and consumer transactions. Foreign parties entering into contracts with Turkish counterparties should also decide which law will govern the contract and how disputes will be resolved.
How contracts are formed and when form matters
A contract is formed by mutual and corresponding declarations of intent, an offer and an acceptance (TBK, Art. 1). Turkish law follows the principle of freedom of form: unless the law requires a specific form, contracts can be validly concluded orally (Art. 12). For some contracts, however, the law requires a particular form:
| Contract | Required form | Legal basis |
|---|---|---|
| Sale of real estate | Official form at the land registry | Civil Code, Art. 706; TBK, Art. 237 |
| Promise to sell real estate | Drawn up by a notary | TBK, Art. 237 |
| Personal guarantee (suretyship) | Written form; maximum amount, date and, for joint and several guarantees, that capacity in the guarantor's own handwriting | TBK, Art. 583 |
| Promise to donate | Written form (official form for real estate) | TBK, Art. 288 |
| Non-compete clause in an employment contract | Written form | TBK, Art. 444 |
| Assignment of a receivable | Written form | TBK, Art. 184 |
Even where no form is required, a written contract is very important as evidence. Under Article 200 of the Code of Civil Procedure, legal transactions above a threshold amount, updated each year, must generally be proven by documentary evidence.
Standard terms and conditions
Terms prepared in advance by one party for use in many contracts, which the other party cannot influence, are standard terms (TBK, Art. 20). Terms that are disadvantageous to the other party become part of the contract only if the drafting party expressly informed the other party and the other party accepted them; otherwise they are deemed not written (Art. 21). Ambiguous terms are interpreted against the drafting party (Art. 23).
Common types of contract
| Contract | Subject | TBK |
|---|---|---|
| Sale | Transfer of ownership of an asset for a price | Art. 207 et seq. |
| Lease | Use of an asset for a rent | Art. 299 et seq. |
| Service | Work by an employee dependent on the employer for a wage | Art. 393 et seq. |
| Works (construction, contract for work) | Creation of a work by a contractor (construction, software, renovation) | Art. 470 et seq. |
| Agency (mandate) | Handling a matter on behalf of a principal | Art. 502 et seq. |
| Loan | Money or consumables given to be returned | Art. 386 et seq. |
| Guarantee (suretyship) | Guarantor's liability for the debtor's non-payment | Art. 581 et seq. |
Mixed contracts combining elements of these types, such as franchise, distribution and licence agreements, are also common. Which rules apply depends on the predominant element of the contract.
Invalidity and defects of consent
Contracts contrary to mandatory provisions of law, morality, public order or personality rights, or whose subject is impossible, are void (TBK, Art. 27). In addition, a contract may not bind a party whose consent was defective:
- Excessive benefit (aşırı yararlanma): a clear imbalance between the parties' performances obtained by exploiting the injured party's distress, inexperience or thoughtlessness (Art. 28).
- Mistake: a mistake about an essential element of the contract (Art. 30–35).
- Fraud: a contract concluded as a result of deception by the other party or a third party (Art. 36).
- Duress: a contract concluded as a result of threats by the other party or a third party (Art. 37).
In cases of mistake, fraud and duress, the right to declare that one is not bound must be exercised within one year of discovering the mistake or fraud or of the end of the duress (Art. 39). For excessive benefit, the period is one year from discovery and in any case five years from the contract.
Non-performance and default
A debtor is in default when a debt that has fallen due is not paid after the creditor's demand. If a performance date was fixed, default occurs without a demand once that date passes (TBK, Art. 117). The consequences are:
- Default interest and damagesFor monetary debts, the debtor owes default interest (Art. 120); for other obligations, damages for delay can be claimed (Art. 118).
- Additional timeIn bilateral contracts, the creditor gives the debtor a reasonable period to perform or asks the court to set one (Art. 123). In some cases, no additional period is needed (Art. 124).
- Creditor's optionsIf the debtor still does not perform, the creditor may claim performance plus damages for delay, waive performance and claim damages for non-performance, or withdraw from the contract and claim damages for the loss caused by entering into it (Art. 125).
Where an extraordinary and unforeseeable event not caused by the parties has excessively disturbed the balance between performances, the debtor may ask the court to adapt the contract to the new circumstances or, if that is not possible, withdraw from it (TBK, Art. 138, hardship).
Penalty clauses
The parties may agree on a penalty payable if the obligation is not performed or not performed properly (TBK, Art. 179). A penalty clause allows the creditor to claim the agreed amount without proving any loss. Key points:
- As a rule, the creditor may claim either performance or the penalty; for penalties agreed for failure to observe the time or place of performance, both can be claimed.
- The court reduces an excessive penalty on its own motion (Art. 182(3)). A penalty undertaken by a merchant in that capacity, however, cannot be reduced (Commercial Code, Art. 22).
- Penalty clauses against the tenant in residential and roofed business leases, and penalty clauses against the employee alone in employment contracts, are invalid.
Tort and compensation
A person who causes damage to another through a wrongful and unlawful act must compensate it (TBK, Art. 49). Liability in tort has four elements: an unlawful act, damage, fault and a causal link. The injured party can claim pecuniary damages for the loss suffered and lost profits, and non-pecuniary damages for harm to personality rights (Art. 58). In some cases liability arises without fault: liability of employers for their employees (Art. 66), keepers of animals (Art. 67), owners of buildings (Art. 69) and strict liability for hazardous activities (Art. 71).
Under Law No. 7589, which entered into force on 31 July 2026, Article 55 of the Code of Obligations now contains new rules on when interest starts to run on compensation for bodily injury and loss of support; they apply to events occurring after that date. Traffic accidents and insurance disputes are covered in our compensation and insurance guide.
Unjust enrichment
A person enriched from another's assets or labour without a legal ground must return the enrichment (TBK, Art. 77). Typical examples are payments made under an invalid contract, transfers to the wrong account and payments based on a ground that later ceases to exist. Claims are time-barred two years after the claimant learns of the right to reclaim, and in any case ten years after the enrichment (Art. 82).
Personal guarantees (suretyship)
Under a guarantee, the guarantor undertakes to the creditor to be liable for the consequences of the debtor's failure to perform (TBK, Art. 581). To protect guarantors, the law imposes strict formal requirements:
- The guarantee must be in writing.
- The maximum amount, the date and, for a joint and several guarantee, that capacity must be written in the guarantor's own handwriting (Art. 583).
- As a rule, a married person needs the written consent of their spouse to give a guarantee, with some statutory exceptions (Art. 584).
- Under an ordinary guarantee, the creditor must first pursue the debtor; under a joint and several guarantee, the creditor can go directly to the guarantor once the debtor is in default (Art. 585–586).
Failure to meet any of these formal requirements makes the guarantee invalid.
Debt collection and lawsuits
If a debtor does not pay, the creditor can either start enforcement proceedings directly or file a lawsuit. Where the claim is documented and an objection is unlikely, enforcement may be faster; if the debtor objects, the creditor files an action to set aside the objection (see our enforcement and bankruptcy guide).
A creditor who cannot quantify the full claim when filing can bring a partial claim and increase it once in the same proceedings, for example after an expert report (Code of Civil Procedure, Art. 109). The separate "action for an undetermined claim" (Art. 107) was repealed by Law No. 7589 with effect from 31 July 2026; cases filed before that date continue under the old rules. Where there is a risk that the debtor will hide assets, a precautionary attachment can be requested before or during the proceedings.
Competent courts and mediation
Disputes under the law of obligations are generally heard by the civil courts of first instance. However, consumer transactions go to consumer courts or consumer arbitration committees, commercial matters to commercial courts, tenancy disputes to civil courts of peace and employment contracts to labour courts. Mediation is mandatory before filing commercial money claims, consumer disputes and tenancy disputes. The parties may also include an arbitration clause in their contract.
Limitation periods
| Claim | Period | Legal basis |
|---|---|---|
| General rule (claims not otherwise regulated) | 10 years | TBK, Art. 146 |
| Rent, interest on capital, wages, claims from agency, works and commission relationships and others | 5 years | TBK, Art. 147 |
| Tort claims | 2 years from learning; 10 years at the latest (longer if the act is a crime) | TBK, Art. 72 |
| Unjust enrichment | 2 years from learning; 10 years at the latest | TBK, Art. 82 |
| Avoidance for mistake, fraud or duress | 1 year (time bar) | TBK, Art. 39 |
| Excessive benefit | 1 year from learning; 5 years at the latest | TBK, Art. 28 |
Limitation is interrupted, and starts to run again, if the debtor acknowledges the debt, makes a part payment, or a lawsuit or enforcement proceeding is started (Art. 154). A time-barred claim does not disappear, but it cannot be enforced through the courts if the debtor raises the limitation defence.
Values such as the documentary evidence threshold and statutory interest rates are updated periodically, and special contract types may have different periods. This information is general.
What to cover when drafting a contract
Many disputes stem from vague or incomplete contracts. A well-drafted contract usually clearly addresses:
- Full names, addresses and notice addresses of the parties (including a registered electronic mail address)
- A detailed and measurable description of the goods, services or work
- Price, payment schedule, currency and default interest
- Delivery or performance date and the consequences of delay
- Penalty clauses, security and limitations of liability
- Grounds for termination and the form of the termination notice
- Confidentiality and protection of personal data
- Governing law and dispute resolution: competent court, mediation or arbitration
- For bilingual contracts: which language version prevails
Relevant legislation
Turkish legislation is published (in Turkish) at mevzuat.gov.tr:
- Turkish Code of Obligations No. 6098 — Art. 1–48 (contracts), 49–76 (tort), 77–82 (unjust enrichment), 117–126 (default), 146–161 (limitation), 179–182 (penalty clauses), 581–603 (guarantees)
- Code of Civil Procedure No. 6100 — Art. 109 (partial claims), Art. 200 (documentary evidence)
- Law No. 3095 on Statutory and Default Interest
- Turkish Commercial Code No. 6102 — Art. 18, 22
- Law No. 7589 (2026) — amendments to TBK Art. 55 and the Code of Civil Procedure
Contracts and Obligations: topics
The main topics within contract law are listed below. Detailed guides for each are in preparation.
- Drafting and reviewing contracts
- Debt collection lawsuits
- Tort claims
- Penalty clauses
- Termination of contracts
Frequently asked questions about contract law in Turkey
Is an oral contract valid in Turkey?
Yes, as a rule. Unless the law requires a specific form, oral contracts are valid. However, contracts such as the sale of real estate and personal guarantees are invalid without the required form, and proving an oral contract above a certain value can be difficult because documentary evidence is generally required.
Can a contract with a Turkish company be governed by foreign law?
In contracts with a foreign element, the parties can generally choose the governing law under the Private International Law No. 5718. Some mandatory Turkish rules may still apply, for example to real estate in Turkey, consumer contracts and employment contracts. The choice of law and forum should be stated expressly.
What can I do if the other party does not perform?
Once the debtor is in default, you can, after giving a reasonable additional period where required, claim performance with damages for delay, claim damages instead of performance, or withdraw from the contract and claim damages (TBK, Art. 125). The right choice depends on the circumstances.
Will a court enforce a penalty clause?
Generally yes, without proof of loss. However, the court can reduce an excessive penalty, except where it was undertaken by a merchant in that capacity. Some penalty clauses, such as those against tenants in residential leases, are invalid.
Is my personal guarantee valid?
Only if it is in writing and states, in the guarantor's own handwriting, the maximum amount, the date and, for a joint and several guarantee, that capacity. A married guarantor generally needs the spouse's written consent. If any of these is missing, the guarantee is invalid.
How long do I have to claim a debt?
The general limitation period is ten years, but many claims, such as rent, wages and claims under works or agency contracts, are time-barred after five years. Tort claims are time-barred two years after learning of the damage and the person liable.
Can a contract be changed if circumstances change dramatically?
Yes, in exceptional cases. If an extraordinary and unforeseeable event excessively disturbs the balance of the contract, the affected party can ask the court to adapt the contract or, if that is impossible, withdraw from it (TBK, Art. 138).
Should I start enforcement proceedings or file a lawsuit to collect a debt?
If the debt is documented and an objection is unlikely, enforcement proceedings may be faster. If the debtor objects, an action to set aside the objection is required, preceded by mediation in commercial and consumer matters. Where an objection is very likely, filing a lawsuit directly may be more efficient.
This article is for general information only and does not constitute legal advice. Please consult a lawyer about your specific situation. Legislation and court practice change over time, so check the current legislation before taking any step. Last updated: 7 October 2026