Contract Drafting and Review

A significant share of disputes begin not in court, but on the day the contract is written. A vaguely worded delivery date, a disproportionate penalty clause, or a termination scenario no one considered can lead the parties to sue each other years later. The purpose of contract drafting and review services is to turn the parties' true intent into clear, enforceable provisions and to make risks visible before signing.

Copying a ready-made template often fails to serve this purpose, because every commercial relationship, every lease or service arrangement carries its own specific risks. Every file is unique; which provisions a contract should contain must be assessed separately, based on the actual relationship. For this reason, especially in high-value, long-term relationships or those with consequences that are hard to reverse, involving a lawyer in the drafting process from the outset reduces interpretation disputes that may arise later.

Freedom of contract and its limits

Under the Turkish Code of Obligations, the parties may freely determine the content of a contract within the limits set by law. However, this freedom has boundaries: contracts that violate mandatory provisions of the law, morality, public order, or personality rights, or whose subject matter is impossible, are absolutely void. For example, provisions in a lease agreement that contravene mandatory legal provisions to the tenant's detriment, or clauses in an employment contract that eliminate an employee's fundamental rights, may not be enforceable even if they were signed.

The invalidity of part of a contract does not, as a rule, invalidate the entire contract; however, the outcome may differ if the parties would not have entered into the contract without that part. For this reason, structuring critical clauses in compliance with the law protects the contract as a whole.

Formal requirements: which contracts must be written or official?

As a rule, contracts are not subject to any particular form; however, where the law specifically prescribes a form, failure to comply with it renders the contract invalid. The most common examples in practice are as follows:

• Sale of real estate: Must be made in official form; as a rule, this transaction is carried out at the land registry office.
• Surety agreement: Must be in writing; the maximum amount for which the surety will be liable and the date of the suretyship must be stated, and the surety must write this information in their own handwriting, as well as the joint and several nature of the suretyship, if applicable.
• Non-compete agreement: Must be made in writing between the employee and the employer and must be limited in terms of place, duration, and subject matter.
• Construction in exchange for flats and promise to sell real estate: Since they involve an obligation to transfer real estate, they are subject to official form; in practice, they are executed as notarial deeds.

Even for contracts where the law does not require a particular form, a written document is of great importance for ease of proof and for clearly showing what the parties agreed to. Even a relationship established verbally and running smoothly for years can turn into a serious evidentiary problem over which terms were agreed on the day one of the parties wants to leave.

Clauses we examine first during a review

1. Correct identification of the parties: For companies, the trade name, power of representation, and the authority of the signatory.
2. Clear definition of the obligations: The characteristics and quantity of the goods or services to be delivered, and the place and date of delivery.
3. Price and payment terms: Due date, currency, price adjustment, and the interest applicable in case of delay.
4. Penalty clause: Whether the amount is appropriate to its deterrent purpose and which breaches it is tied to.
5. Termination and expiry: Grounds for termination, notice periods, and the consequences of expiry.
6. Dispute resolution: Provisions on competent court, arbitration, or mediation.
7. Confidentiality, personal data, and intellectual property rights: Particularly in service and software agreements.

Defects of consent and changed circumstances

Certain options remain available even after a contract has been signed. A party who entered into a contract under a fundamental mistake, deception, or duress may declare that they are not bound by the contract within one year from the date they discovered the mistake or deception, or from the date the effect of the duress ceased. If an extraordinary circumstance that could not have been foreseen when the contract was concluded has excessively upset the balance between the obligations to the debtor's detriment, adaptation of the contract may be requested under the provisions on excessive difficulty of performance. In long-term contracts, drafting price adjustment and extraordinary circumstances clauses from the outset significantly reduces such disputes.

Penalty clauses and the judge's power of reduction

A penalty clause is a predetermined amount payable if an obligation is not performed at all or not performed properly, and it relieves the creditor of the burden of proving their loss. However, a judge may reduce a penalty they consider excessive on their own motion. In contracts between merchants, the Turkish Commercial Code provides that a merchant cannot request a reduction of the penalty on the grounds that it is excessive. For this reason, the amount of a penalty clause must be determined with care, particularly in commercial contracts.

General terms and conditions and standard contracts

Clauses prepared in advance by banks, insurance companies, software providers, or large suppliers and presented to the other party without an opportunity to negotiate constitute general terms and conditions. Under the law, such terms are deemed unwritten unless the other party has been clearly informed of their existence, given the opportunity to learn their content, and has accepted them. Provisions that are to the other party's detriment and contrary to the principle of good faith may also be deemed invalid.

Jurisdiction and arbitration clauses

A jurisdiction clause included in a contract is not valid in every case. Under the Code of Civil Procedure, a jurisdiction agreement can only be made between merchants or public legal entities and must be in writing. Jurisdiction clauses in contracts with consumers may not bind the consumer. An arbitration clause must be in writing and the intent must be clear. For relationships in which one of the parties is a consumer, please see our consumer law page.

Our firm's support

Our firm provides support in drafting contracts, particularly lease, service, sales, dealership, work, confidentiality, and partnership agreements, in reviewing drafts presented by the other party, and in preparing proposed amendments during the negotiation process. When a dispute arising from a contract emerges, the matter is handled within the scope of contracts and obligations law.