International sales dispute involving a Turkish buyer or seller? Learn how the CISG applies in Turkey, including non-payment, defective goods, late delivery, contract avoidance, damages, interest and international dispute resolution.

International trade disputes involving Turkish companies frequently arise from unpaid invoices, defective products, delayed shipments, missing goods, quality disputes, incorrect quantities or a buyer refusing to accept delivery. For foreign businesses, one of the most important questions is which legal rules govern the transaction.

In many cross-border sales involving Turkey, the answer may be the United Nations Convention on Contracts for the International Sale of Goods (CISG).

Turkey has been a contracting state to the CISG since 1 August 2011. This means the CISG can apply automatically to many international contracts for the sale of goods involving Turkish companies, even where the parties did not expressly write “CISG” into their contract.

This can substantially affect the rights of foreign buyers and sellers. The CISG regulates issues including formation of international sales contracts, delivery obligations, conformity of goods, payment, remedies for breach, damages, avoidance of contract and interest.

For foreign companies involved in a dispute with a Turkish trading partner, the first question should therefore be:

Does the CISG apply to this transaction?

What Is the CISG?

The CISG is an international convention designed to provide uniform rules for cross-border sales of goods.

Instead of applying entirely different domestic sales rules to every international transaction, the Convention establishes a common legal framework for businesses operating across contracting states.

The United Nations Commission on International Trade Law describes the CISG as providing a modern, uniform and fair regime for contracts for the international sale of goods.

Official UNCITRAL CISG Information

For businesses importing from or exporting to Turkey, this makes the CISG particularly important.

When Does the CISG Apply in Turkey?

Under Article 1, the CISG generally applies to contracts for the sale of goods between parties whose places of business are in different states where the Convention’s applicable conditions are satisfied.

One of the clearest situations occurs where both parties have their places of business in CISG contracting states.

For example, if a Turkish company sells industrial machinery to a company located in another CISG contracting state, the Convention may apply automatically.

The nationality of the shareholders or directors is generally not the decisive issue.

The parties’ places of business are far more important.

Does the Contract Need to Mention the CISG?

Not necessarily.

This surprises many foreign businesses.

A contract may simply state that it concerns the sale of machinery from a Turkish supplier to a foreign purchaser.

If the Convention’s requirements are satisfied, the CISG may apply even though the agreement never expressly mentions it.

This is why parties should not assume that silence means domestic Turkish sales law automatically governs every aspect of the transaction.

Can the Parties Exclude the CISG?

Yes.

Article 6 allows parties to exclude application of the Convention or, subject to its rules, derogate from or vary the effect of its provisions.

Sophisticated international contracts therefore sometimes state expressly:

“The United Nations Convention on Contracts for the International Sale of Goods shall not apply.”

Where the parties want domestic law to govern without the CISG, clear drafting is advisable.

Does Choosing Turkish Law Automatically Exclude the CISG?

Not necessarily.

This is an important drafting issue.

Because the CISG forms part of the applicable legal framework for international sales falling within its scope, simply choosing the “laws of Turkey” does not necessarily amount to an exclusion of the Convention.

If the parties specifically intend to exclude the CISG, the contract should normally say so clearly.

What Transactions Does the CISG Cover?

The Convention primarily concerns commercial sales of goods.

Typical examples can include industrial machinery, manufacturing equipment, raw materials, automotive components, textiles, chemicals, electronics and other internationally traded goods.

However, not every transaction involving something commercially valuable falls within the Convention.

The characterization of the agreement should be examined carefully.

Transactions Excluded From the CISG

Article 2 excludes several categories.

These include certain consumer purchases, auctions, sales on execution or otherwise by authority of law, stocks and shares, investment securities, negotiable instruments, money, ships, vessels, hovercraft, aircraft and electricity.

The Convention therefore should not automatically be applied merely because the transaction involves parties located in different countries.

Contracts Involving Goods and Services

Some contracts combine the supply of goods with installation, engineering, maintenance or other services.

Article 3 becomes important in determining whether the CISG applies.

If the predominant part of the supplier’s obligations consists of labor or other services, the Convention may not govern the transaction in the same way as an ordinary sale of goods.

This issue frequently arises in machinery installation, industrial projects and complex equipment transactions.

Seller’s Main Obligations Under the CISG

Article 30 establishes the seller’s fundamental obligations.

The seller must deliver the goods, hand over relevant documents and transfer property in the goods as required by the contract and Convention.

In practice, seller disputes frequently concern:

late delivery,

non-delivery,

defective goods,

incorrect quantity,

incorrect specifications,

missing documentation,

or goods that do not satisfy contractual requirements.

The buyer’s remedy depends on the nature and seriousness of the breach.

Buyer’s Main Obligations

The buyer must generally pay the price and take delivery in accordance with the contract and Convention.

For Turkish exporters, the most common problem is often straightforward:

The goods were delivered, but the foreign buyer refuses to pay.

The seller may potentially seek the price, interest and damages depending on the circumstances.

Unpaid International Invoices

Suppose a Turkish manufacturer sells EUR 600,000 of goods to a foreign buyer.

The goods are delivered and accepted.

The payment deadline passes.

The buyer does not pay.

Under Article 62, the seller may generally require the buyer to pay the price, take delivery or perform its other obligations, subject to the Convention’s remedial framework.

The seller should preserve the sales contract, purchase orders, invoices, shipping documents, delivery evidence and communications concerning payment.

Foreign Seller Not Paid by a Turkish Buyer

The same principles can operate in the opposite direction.

A foreign supplier may deliver goods to a Turkish purchaser and remain unpaid.

The supplier should first determine whether the CISG governs the sales relationship and then examine the jurisdiction or arbitration clause.

The existence of a CISG claim does not itself determine which court or tribunal will hear the dispute.

Applicable substantive law and jurisdiction are separate questions.

Defective Goods

For foreign buyers purchasing goods from Turkey, Article 35 is one of the Convention’s most important provisions.

The seller must generally deliver goods of the quantity, quality and description required by the contract and packaged as required.

Depending on the circumstances, goods should also be fit for the purposes contemplated by Article 35.

A dispute may therefore arise where products technically arrive but fail to conform to the contract.

Wrong Quality

Suppose a foreign purchaser orders 10,000 components manufactured to specified technical tolerances.

The Turkish supplier delivers the correct quantity, but laboratory testing shows that the components do not meet the agreed specifications.

The buyer may potentially invoke remedies for non-conformity.

However, the buyer’s own obligations concerning examination and notice become critically important.

Buyer’s Duty to Examine the Goods

Article 38 generally requires the buyer to examine the goods, or cause them to be examined, within as short a period as practicable in the circumstances.

The appropriate period depends on factors such as the goods, transportation, complexity of inspection and nature of the alleged defect.

A purchaser should therefore avoid storing goods for months without inspection and then assuming every defect claim remains fully protected.

Notice of Non-Conformity

Article 39 is one of the most important provisions in CISG litigation.

A buyer may lose the right to rely on a lack of conformity if it fails to notify the seller, specifying the nature of the problem, within a reasonable time after discovering it or when it ought to have discovered it.

Article 39 also contains a two-year outer period from the date the goods were actually handed over to the buyer, unless inconsistent with a contractual guarantee period.

This means defective-goods disputes can be lost because of poor notification even where the goods genuinely had problems.

What Should a Defect Notice Contain?

A buyer should avoid vague statements such as:

“The products are bad.”

The notice should identify the problem sufficiently.

For example:

“Units delivered under Invoice 2026-145 fail to satisfy the agreed dimensional tolerance in Specification X, affecting batches 4 through 8.”

Photos, laboratory results, inspection reports and batch information should be preserved.

The objective is to give the seller meaningful information about the alleged non-conformity.

Seller Knew About the Defect

Article 40 can become important where the seller knew or could not have been unaware of facts relating to the non-conformity and failed to disclose them to the buyer.

In those circumstances, the seller cannot rely on certain buyer notice protections in the ordinary way.

Evidence of the seller’s prior knowledge can therefore substantially affect the dispute.

Late Delivery

Delayed delivery is another frequent international trade dispute.

Suppose a Turkish supplier agrees to deliver production equipment by September 1.

The equipment arrives six weeks late.

Whether the buyer can terminate the entire contract depends on more than the existence of delay.

The seriousness of the breach and the contractual circumstances must be considered.

Fundamental Breach

Article 25 defines the important concept of fundamental breach.

A breach is fundamental where it results in such detriment to the other party as substantially to deprive that party of what it was entitled to expect under the contract, subject to the Convention’s foreseeability qualification.

This concept is crucial because avoidance of the contract is generally reserved for sufficiently serious breaches.

Not every minor delay or defect allows the buyer to cancel the transaction.

Additional Time for Performance

The CISG also allows a party in appropriate circumstances to provide an additional period for performance.

For buyers, Article 47 permits fixing an additional reasonable period for the seller to perform.

For sellers, Article 63 provides a corresponding mechanism concerning buyer performance.

This can become particularly important where immediate avoidance is not available but the counterparty remains in default.

Can the Buyer Cancel the Contract?

Under the CISG, the legal concept is generally avoidance.

Article 49 allows the buyer to declare the contract avoided in specified circumstances, including where the seller’s failure amounts to a fundamental breach.

Avoidance is a significant remedy.

The buyer should not assume that any defective shipment automatically permits cancellation of the entire contract.

Seller’s Right to Avoid the Contract

Article 64 provides corresponding rights for the seller in specified circumstances.

This can become relevant where the buyer fundamentally breaches the agreement or fails to pay or take delivery within an additional period properly fixed by the seller.

For Turkish exporters dealing with persistent non-payment, this provision can become important.

Repair or Replacement

A buyer facing defective goods does not always need to terminate the transaction.

Depending on the circumstances and requirements of the Convention, remedies can include requiring performance, repair or substitute goods.

The availability of substitute goods is tied to the seriousness of the breach.

The commercial objective should therefore be considered.

If defective machinery can be repaired quickly, cancellation of a multimillion-euro transaction may not be the most efficient remedy.

Seller’s Right to Cure

Article 48 can allow a seller, subject to the Convention’s conditions, to remedy failure to perform even after the delivery date.

This can reduce unnecessary contract termination.

For example, if a minor technical problem can be corrected quickly without unreasonable inconvenience or uncertainty for the buyer, cure may be possible.

The parties should document proposed remedial steps carefully.

Price Reduction

Article 50 provides another important buyer remedy.

Where goods do not conform to the contract, the buyer may in appropriate circumstances reduce the price in proportion to the difference between the value of the goods actually delivered and the value conforming goods would have had at the time of delivery.

This can be commercially attractive where the buyer wishes to keep usable but non-conforming goods.

Damages Under the CISG

Article 74 establishes the Convention’s central damages principle.

Damages generally consist of the loss, including loss of profit, suffered as a consequence of the breach, subject to the Convention’s foreseeability limitation.

The injured party must therefore establish both breach and resulting loss.

Simply asserting that a supplier caused “business damage” is rarely sufficient in a major commercial dispute.

Lost Profits

Lost profits can potentially be recovered under Article 74.

But they need evidence.

Suppose defective production machinery causes a factory to stop operating for 30 days.

The buyer may claim lost profits resulting from the shutdown.

The buyer should preserve production records, customer orders, historical margins, cancelled contracts and other evidence demonstrating the actual financial consequences.

Speculative projections are much weaker.

Foreseeability of Damages

The CISG limits damages to losses that the breaching party foresaw or ought to have foreseen at the time of contracting as a possible consequence of the breach.

This makes contractual communication important.

If the seller knew that late delivery would cause the buyer to miss a major downstream production deadline, that knowledge may become relevant to the damages analysis.

Duty to Mitigate Loss

Article 77 requires the party relying on the breach to take reasonable measures to mitigate its loss.

A party cannot simply allow losses to accumulate unnecessarily and then demand that the counterparty pay everything.

For example, a buyer facing non-delivery may need to consider obtaining substitute goods where reasonably possible.

Failure to mitigate can reduce recoverable damages.

Substitute Transactions

Where the contract has been avoided, Article 75 can become relevant if the injured party enters into a reasonable substitute transaction.

A buyer may purchase replacement goods elsewhere.

A seller may resell goods to another customer.

The difference between the contract price and substitute transaction price can potentially form part of the damages calculation under the applicable conditions.

Current Market Price

Where no substitute transaction occurs, Article 76 can allow damages to be calculated using the difference between the contract price and current market price under specified circumstances.

This can be particularly useful for internationally traded commodities and standardized goods.

Evidence of the relevant market price becomes important.

Interest on Unpaid Amounts

Article 78 provides that where a party fails to pay the price or another sum in arrears, the other party is entitled to interest.

However, the Convention does not itself establish a universal interest rate.

Determining the applicable rate can therefore require analysis of the governing law and relevant conflict-of-laws principles.

This is a frequent issue in international sales disputes.

Delivery Documents

Some disputes concern documents rather than the physical goods.

International transactions may require bills of lading, certificates of origin, inspection certificates, commercial invoices, packing lists or other documentation.

Failure to provide required documents can create contractual problems even where the goods themselves are physically conforming.

The contract and agreed trade terms should be reviewed together.

CISG and Incoterms

The CISG and Incoterms perform different functions.

Incoterms can allocate important responsibilities relating to delivery, transportation, costs and risk.

The CISG governs broader contractual rights and remedies.

An international sales contract may therefore be governed by the CISG while also incorporating an Incoterm such as FOB, CIF or DDP.

The two frameworks should be interpreted together rather than treated as alternatives.

Passing of Risk

Risk allocation can determine who bears the loss where goods are damaged during international transportation.

Articles 66 through 70 regulate risk under the CISG.

However, agreed Incoterms and contractual provisions can significantly affect the practical analysis.

If goods are damaged at sea, the first question should not automatically be whether the seller or buyer physically possessed them.

The contractual risk-transfer point must be identified.

Non-Payment Because Buyer Claims Defects

A common dispute involves a buyer withholding the entire purchase price because some goods are allegedly defective.

The seller may argue that the defect is minor and does not justify complete non-payment.

The buyer may claim substantial non-conformity.

Inspection reports, defect notices and evidence concerning the value of conforming and non-conforming goods become crucial.

The remedy must be proportionate to the legal basis relied upon.

Documentary Evidence in CISG Disputes

International sales disputes are often won or lost through documentation.

Important evidence can include the signed sales agreement, purchase orders, order confirmations, invoices, technical specifications, emails, shipping documents, inspection reports, photographs, laboratory reports, customs documents, delivery records and payment correspondence.

Parties should also preserve the complete history of amendments to specifications and delivery schedules.

Email and WhatsApp Negotiations

A dispute may arise over what the parties actually agreed.

One side may rely on a formal contract.

The other may argue that specifications or delivery dates were later changed by email.

The CISG contains rules concerning contract formation and modification that can become relevant.

Electronic communications should therefore be preserved in their original form.

Oral International Sales Agreements

The CISG does not generally impose a universal written-form requirement.

Article 11 states that a contract of sale need not be concluded in or evidenced by writing and may be proved by any means, including witnesses, subject to applicable Convention reservations and other relevant considerations.

Businesses should nevertheless use clear written contracts because evidentiary disputes become significantly harder without them.

Jurisdiction Is Separate From CISG Applicability

A major misconception is that the CISG tells parties where to sue.

It does not.

The CISG primarily governs substantive sales law.

Jurisdiction may depend on a court-selection clause, arbitration agreement, private international law rules or other applicable jurisdictional rules.

A foreign seller may therefore have a CISG claim against a Turkish buyer but still need separate analysis to determine the correct forum.

Arbitration Clauses

Many international sales contracts provide for arbitration.

If the contract contains a valid arbitration clause, the dispute may need to be resolved through the agreed arbitral process rather than ordinary court litigation.

The tribunal can still apply the CISG where it forms part of the applicable substantive law.

Before starting proceedings in Turkey, foreign companies should review the dispute-resolution clause carefully.

Turkish Courts and CISG Claims

Where Turkish courts have jurisdiction over an international sale governed by the Convention, the CISG may form the substantive framework for the dispute.

Foreign companies should therefore present their case using the Convention’s concepts rather than automatically relying only on domestic sales provisions.

This is particularly important for conformity notices, fundamental breach, avoidance and damages.

Practical Example: Defective Machinery From Turkey

Assume a foreign manufacturer purchases EUR 2 million of industrial machinery from a Turkish supplier.

The contract requires specific production capacity.

After installation, the equipment consistently achieves only 60% of the agreed output.

The buyer immediately commissions an independent technical inspection and sends the seller a detailed notice identifying the problem.

The seller attempts repairs but cannot achieve the required performance.

The buyer’s CISG analysis may include conformity under Article 35, timely examination and notification under Articles 38 and 39, possible cure under Article 48, whether the failure amounts to fundamental breach under Article 25, potential avoidance under Article 49 and damages under Article 74.

If the buyer suffers production losses, Article 77’s mitigation requirement must also be considered.

Practical Example: Turkish Exporter Is Not Paid

Assume a Turkish manufacturer exports EUR 750,000 of goods to a foreign buyer.

The goods conform to the contract and are delivered.

The buyer accepts them but does not pay.

The seller should preserve delivery and acceptance evidence and determine whether the CISG applies.

Potential remedies may include requiring payment under Article 62, interest under Article 78 and damages where additional recoverable losses exist.

The seller should also examine the dispute-resolution clause to determine where the claim must be pursued.

Immediate Action After an International Sales Dispute

The first step should be to identify the contract and applicable legal framework. Determine whether the CISG applies and whether it was expressly excluded.

Next, identify the breach precisely: non-payment, non-delivery, late delivery, defective goods, incorrect quantity or another failure.

For defective goods, examination and notification should receive immediate attention because delay can jeopardize the buyer’s rights.

All documentary evidence should be preserved.

The parties should then review the jurisdiction or arbitration clause, applicable Incoterms, damages provisions and contractual notice requirements before commencing proceedings.

Frequently Asked Questions

Does the CISG apply to international sales involving Turkey?

Potentially, yes. Turkey has been a CISG contracting state since 1 August 2011, and the Convention can apply to qualifying international sales transactions.

Does the contract need to expressly mention the CISG?

No. The Convention can apply automatically where its requirements are satisfied.

Can businesses exclude the CISG?

Yes. Article 6 permits parties to exclude its application or modify the effect of many of its provisions.

Does choosing Turkish law automatically exclude the CISG?

Not necessarily. Parties wishing to exclude the Convention should generally do so expressly.

What can a foreign buyer do if Turkish goods are defective?

Depending on the circumstances, remedies may include performance, repair, substitute goods, price reduction, damages or avoidance for sufficiently serious breaches.

How quickly must defective goods be reported?

Article 39 generally requires notice specifying the nature of the non-conformity within a reasonable time after discovery or when it ought to have been discovered. A two-year outer period also generally applies, subject to the Convention’s rules.

Can a Turkish seller recover an unpaid international invoice?

Potentially. Article 62 permits the seller to require payment and Article 78 provides entitlement to interest on sums in arrears.

Can lost profits be recovered?

Potentially. Article 74 expressly includes loss of profit, subject to causation, foreseeability and other applicable requirements.

Can every breach justify cancellation?

No. Avoidance is generally reserved for circumstances specified by the Convention, with fundamental breach being particularly important.

Does the CISG determine whether the dispute goes to court or arbitration?

No. Jurisdiction and arbitration are separate questions and should be determined from the contract and applicable procedural rules.

Client-Focused Legal Support for International Sale of Goods Disputes

International sales disputes involving Turkey require more than simply asking whether the buyer received the goods or whether an invoice remains unpaid. The first legal question is often whether the CISG governs the transaction and what rights arise under the Convention.

For foreign buyers, the most important issues frequently involve defective goods, non-conformity, examination and notice requirements, delayed delivery, repair, replacement, price reduction, avoidance and damages.

For Turkish exporters and foreign sellers dealing with Turkish purchasers, disputes frequently concern non-payment, refusal to accept delivery, unjustified defect allegations, interest and recovery of losses caused by contractual breach.

The distinction between substantive law and dispute forum is equally important. The CISG may govern the international sales relationship while the dispute itself is heard before a Turkish court or an agreed arbitral tribunal.

Fırat Fesih Kaya Law Office assists foreign companies, international buyers, exporters, manufacturers and suppliers with CISG disputes, international sale of goods claims, defective product disputes, unpaid international invoices, non-delivery and late-delivery claims, contract avoidance, damages, international debt recovery, arbitration and cross-border commercial litigation in Turkey.

Phone: +90 312 434 22 22
Mobile: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No: 221, Yıldırım Tower, Balgat, Çankaya, Ankara, Turkey