Breach of Contract and Remedies in Türkiye: What Your Options Are When the Other Side Fails to Perform
If a Turkish supplier, distributor, or business partner has failed to perform, Turkish law gives you a structured set of remedies. Under the Turkish Code of Obligations No. 6098 (Türk Borçlar Kanunu), when a debtor is in default you can generally either insist on performance and claim damages, or terminate the contract and claim damages instead. Which path is right depends on the type of obligation, whether you sent a proper notice, and what loss you can actually prove. This guide explains breach of contract and remedies in Türkiye in plain terms, so your company can decide its next move with confidence.The framework below applies to most commercial contracts performed in or connected to Türkiye. For sale-of-goods and other commercial dealings between merchants, the Turkish Commercial Code No. 6102 (Türk Ticaret Kanunu) adds further rules on top of this base. We define each Turkish term the first time it appears.
What Counts as Breach of Contract Under Turkish Law
In Turkish law, a breach happens when a party does not perform an obligation as the contract requires — it does not perform at all, performs late, or performs defectively. The Turkish Code of Obligations No. 6098 deals with non-performance and its consequences mainly in articles 112 to 126. The starting rule is in article 112: a debtor who does not properly perform an obligation must compensate the creditor's resulting loss, unless the debtor proves it was not at fault.
This last point matters. Turkish law presumes the breaching party is at fault. The burden sits on the debtor (the party who owed performance) to show the failure was not its fault — for example, that performance became impossible for a reason outside its control. As the creditor (the party owed performance), you do not have to prove the other side was careless; you prove the breach and your loss.
The law: Article 112 of the Turkish Code of Obligations No. 6098 makes a non-performing debtor liable for the creditor's loss unless the debtor proves absence of fault. Fault is presumed against the breaching party.
It helps to separate two situations. Late performance (delay) is where performance is still possible but has not happened on time — this triggers the default rules. Impossibility is where performance can no longer happen at all; if the debtor is responsible for that impossibility, it answers in damages under article 112 and related provisions.
Putting the Debtor in Default: Temerrüt and the Notice Requirement
Before most of your stronger remedies become available, the debtor usually has to be in temerrüt — legal default. Default is the state the debtor enters once performance is due and you have demanded it. Under article 117 of the Code of Obligations No. 6098, the debtor of a due obligation falls into default when the creditor sends a ihtar (a formal demand or warning notice).
There are exceptions where no notice is needed — for example, where the contract fixes a firm performance date, or where the parties agreed that the due date alone puts the debtor in default. But as a practical matter, sending a clear written demand is the safest first step, and it is often delivered through a Turkish notary as a noter ihtarnamesi (notarised warning) so that you have solid proof of what was demanded and when.
Practical tip: A well-drafted notarised demand does three things at once — it fixes the date of default, it can grant the additional period for performance, and it creates the paper trail a Turkish court will expect to see later.
Once the debtor is in default, two consequences follow immediately. First, you can claim delay damages — the loss caused specifically by the lateness. Second, for monetary debts, default interest (temerrüt faizi) starts to run. Putting the debtor properly in default is therefore not a formality; it unlocks rights and starts the clock on interest.
The Creditor's Three Core Options on Non-Performance
Where the obligation comes from a contract imposing duties on both sides (a karşılıklı sözleşme, or reciprocal contract — think sale, supply, services, distribution), article 125 of the Code of Obligations No. 6098 gives the creditor a structured set of choices once the debtor is in default. Broadly, you may:
- Insist on performance and claim delay damages — you still want what you contracted for, plus compensation for the harm the delay caused you.
- Give up performance and claim positive damages — you no longer wait for performance, and instead claim the loss caused by the failure to perform (the 'expectation' loss).
- Terminate the contract (dönme/fesih) and claim negative damages — you unwind the deal and claim the loss caused by having relied on a contract that fell through.
One term to define here. Dönme means rescinding the contract so that, in principle, the parties return what they received and the contract is treated as undone. Fesih means terminating going forward — used especially for continuing relationships (such as ongoing supply or distribution), where unwinding everything from the start is impractical. Which concept applies depends on the nature of your contract.
Choose carefully: These options are alternatives, not a menu you can combine freely. In particular, you generally cannot both terminate the contract and claim full positive (performance) damages as if it still stood. The wrong election can weaken your claim, so the choice should be made deliberately, in writing, and ideally with legal advice.
The Additional Period (Mehil) Before You Can Terminate
For reciprocal contracts, you usually cannot jump straight to termination. Article 123 of the Code of Obligations No. 6098 requires the creditor, after default, to grant the debtor a mehil — a reasonable additional period to perform — or to have it set by the court. Only when that period passes without performance do the article 125 options (including termination) fully open up.
The Code also recognises situations where granting an additional period would be pointless and can be skipped — for example, where the debtor's conduct shows performance will not happen, where performance has become useless to you because of the delay, or where the contract made timely performance essential. These exceptions are fact-specific, and Turkish courts examine them closely.
Practical tip: Even where you believe an exception applies, granting a short, documented additional period is often the lower-risk route. It removes a common defence — that you terminated prematurely — and strengthens your position if the dispute reaches a Turkish court.
The length that counts as 'reasonable' depends on the obligation. A simple delivery may need only days; a complex installation may need longer. Setting too short a period can backfire, because a court may treat your subsequent termination as invalid.
Positive Damages vs Negative Damages: What You Can Recover
The remedy you choose shapes what you can claim. Turkish law distinguishes two measures of loss, and the difference is central to breach of contract and remedies in Türkiye.
Positive damages (müspet zarar, expectation interest) aim to put you in the position you would have been in if the contract had been properly performed. This can include lost profit on the deal and the extra cost of obtaining a substitute (a cover purchase) at a higher price. You claim positive damages when you give up performance but keep the contract on foot as a basis for compensation.
Negative damages (menfi zarar, reliance interest) aim to put you in the position you would have been in if you had never entered the contract. This typically covers wasted expenditure incurred in reliance — for example, costs of preparing to receive performance, or expenses you would not have spent but for the deal. Negative damages are the measure associated with terminating (dönme) the contract.
Key distinction: Positive and negative damages rest on different assumptions about the contract's fate, so you generally cannot stack both for the same loss. Picking the right measure — and the right remedy to support it — is a strategic decision, not a clerical one.
In addition, where the debt is monetary, you may claim default interest from the date of default, and in some cases further loss exceeding that interest if you can prove it. The availability and rate of such interest depend on the contract and the applicable statutory rules.
How Damages Are Proved in Turkish Courts
A right to damages is only as strong as your evidence. Under Turkish civil procedure, governed by the Code of Civil Procedure No. 6100 (Hukuk Muhakemeleri Kanunu), the party claiming a loss must prove both the amount of the loss and the causal link between the breach and that loss. Turkish courts do not award speculative or unsupported figures.
In practice, the loss has to be documented. Useful evidence includes the contract and its annexes, correspondence showing the breach and your demands, invoices and payment records, proof of a substitute (cover) purchase and its price, and accounting records supporting any lost-profit claim. For technical or quantum questions, courts frequently appoint a bilirkişiBilirkişiCourt-appointed expertAn independent expert appointed by the court to report on a technical question the judge is not expected to decide alone.Glossary → (court-appointed expert) whose report heavily influences the award.
Practical tip: Build your evidence file from the moment the breach appears — not when you decide to sue. Contemporaneous records, kept in order, are far more persuasive than reconstructions made months later.
Two further points matter for foreign companies. First, the Code of Obligations expects a creditor to act reasonably to limit its own loss; failure to mitigate can reduce recovery. Second, claims are subject to time limits (zamanaşımı, prescription periods), which vary by claim type — so delay can quietly weaken or extinguish an otherwise good case. The exact period that applies should be checked for your specific contract.
Jurisdiction, Governing Law, and Cross-Border Enforcement
For foreign companies, where and under what law a dispute is decided can matter as much as the substantive remedies. If your contract is connected to more than one country, the choice of governing law and forum is assessed under the Act on Private International Law and International Civil Procedure No. 5718 (MÖHUKMÖHUKTurkish Private International Law Act No. 5718The Turkish statute that decides which country's law applies to a cross-border matter, and how foreign judgments are recognised and enforced here.Glossary →), which lets parties choose the law governing many commercial contracts.
Many cross-border commercial contracts choose arbitration rather than the courts. Arbitration seated in Türkiye is governed by the International Arbitration Act No. 4686 (Milletlerarası Tahkim Kanunu) where the dispute has a foreign element. Arbitration can offer a neutral forum and awards that are widely enforceable internationally, which many foreign businesses value.
If you instead litigate, note that Türkiye has moved much commercial dispute handling toward specialised processes, and that Law No. 7155 introduced a mandatory mediation step before certain commercial claims can proceed to court. Skipping a required pre-action step can get a claim dismissed on procedure, so it should be checked at the outset.
Practical tip: The cheapest remedy is a well-drafted contract. Clear performance dates, default and termination clauses, an agreed governing law, and a sensible dispute-resolution clause make enforcement far simpler if things go wrong.
At Lexin Legal we advise foreign companies on contract drafting, default notices, termination strategy, and the recovery of damages under Turkish law. If a counterparty in Türkiye has failed to perform, contact our team to discuss your situation and the options open to you.
Frequently asked questions
Can I cancel a contract in Türkiye as soon as the other side is late?
Usually not immediately. For most reciprocal contracts you first put the debtor in default (temerrüt), typically with a formal notice, and then grant a reasonable additional period (mehil) to perform under article 123 of the Code of Obligations No. 6098. Only if that period passes without performance can you generally terminate. Some situations — such as a firm fixed date or a clear refusal to perform — allow you to skip the additional period, but those are fact-specific and best confirmed with a lawyer.
What is the difference between positive and negative damages?
Positive damages (müspet zarar) put you where you would have been if the contract had been performed — including lost profit and the extra cost of a substitute. Negative damages (menfi zarar) put you where you would have been if you had never entered the contract — mainly wasted reliance costs. Positive damages go with giving up performance while keeping the contract as a basis for compensation; negative damages go with terminating it. You generally cannot claim both for the same loss.
Do I have to send a formal notice before claiming damages?
In most cases a formal demand (ihtar) is what places the debtor in default under article 117 of the Code of Obligations No. 6098, and default unlocks delay damages and, for money debts, default interest. There are exceptions — for example where the contract sets a firm date. Because the notice fixes important dates and creates proof, many companies send it through a Turkish notary as a noter ihtarnamesi.
How do Turkish courts decide how much I can recover?
You must prove both the amount of your loss and that the breach caused it, under the Code of Civil Procedure No. 6100. Courts rely on documents — the contract, correspondence, invoices, cover-purchase records, and accounting evidence — and often appoint a court expert (bilirkişi) for technical or quantum issues. Speculative or undocumented losses are typically reduced, and a creditor is expected to take reasonable steps to limit its own loss.
Can a foreign company choose foreign law or arbitration for a Turkish contract?
Often yes. For contracts with a foreign element, the parties can usually choose the governing law under the Act on Private International Law No. 5718, and they can agree to arbitration, which for foreign-element disputes seated in Türkiye is governed by the International Arbitration Act No. 4686. The right structure depends on your deal, so these clauses should be drafted deliberately rather than copied from a template.
