When can a foreign company terminate a Turkish commercial contract without paying compensation? 2026 guide to material breach, supplier default, non-delivery, defective performance, force majeure, termination clauses, damages, CISG avoidance, litigation and arbitration in Turkey.

A foreign company doing business in Turkey may reach a point where continuing a commercial contract is no longer commercially reasonable. A Turkish supplier may repeatedly miss delivery deadlines, a distributor may fail to meet essential obligations, a manufacturer may supply non-conforming goods, or a business partner may commit a serious contractual breach.

The foreign company may then ask a deceptively simple question:

“Can we cancel the contract immediately without paying compensation?”

The answer depends on much more than whether the other party has performed badly.

Under Turkish contract law, the consequences of ending an agreement depend on the type of contract, wording of the termination provisions, nature and seriousness of the breach, whether the counterparty is in default, whether an additional period for performance is required, whether notice formalities have been followed and whether Turkish law actually governs the agreement.

For reciprocal contracts, Articles 123–125 of the Turkish Code of Obligations establish an important default framework. In general, an additional period for performance may be required after default, but Article 124 identifies circumstances where no additional period is necessary. Article 125 then provides several alternative remedies, including performance plus delay damages, damages for non-performance, or withdrawal from the contract under the applicable conditions. (WIPO)

For international sales of goods, the analysis may also involve the United Nations Convention on Contracts for the International Sale of Goods (CISG). UNCITRAL confirms that the CISG provides remedies including performance, damages and avoidance in cases of fundamental breach. (UNCITRAL)

The safest approach is therefore not simply to “cancel” the contract. The foreign company should establish a legally defensible termination strategy before sending the notice.

Cancellation, Termination and Withdrawal Are Not Always the Same

Commercial correspondence often uses the words “cancel,” “terminate,” “rescind” and “withdraw” interchangeably.

Legally, however, different mechanisms can have different consequences.

Some mechanisms end future contractual obligations.

Others can trigger restitution of performances already exchanged.

Long-term continuing contracts can require different treatment from one-time sale agreements.

The correct mechanism should therefore be identified before notice is served.

Start With the Contract

Before applying general legal rules, read the agreement.

Locate provisions dealing with:

termination, default, material breach, cure periods, notice, force majeure, insolvency, change of control, contractual penalties, damages, governing law and dispute resolution.

Many commercial disputes are decided not simply by general principles but by contractual wording negotiated years earlier.

Is There a Termination-for-Cause Clause?

A properly drafted commercial contract may identify specific events allowing termination.

Examples can include:

failure to deliver,

failure to pay,

serious quality violations,

loss of required licenses,

breach of confidentiality,

unauthorized subcontracting,

insolvency-related events,

repeated contractual violations,

or failure to remedy a breach within a specified period.

If such a clause exists, follow it carefully.

What Is a Material Breach?

Not every contractual violation permits immediate termination.

Suppose a supplier sends an invoice two days late.

That is very different from failing to deliver EUR 2 million of machinery after receiving a EUR 1 million advance.

The seriousness of the breach matters.

The key question is whether the breach sufficiently undermines the contractual relationship or triggers an agreed termination mechanism.

Supplier Fails to Deliver Goods

Non-delivery is one of the clearest examples requiring termination analysis.

The buyer should determine:

when delivery became due,

whether the supplier is legally in default,

whether additional time must be granted,

whether further performance remains useful,

and whether the contract contains a specific termination mechanism.

Immediate termination should not be assumed merely because the contractual date passed.

Additional Period for Performance

Under Article 123 of the Turkish Code of Obligations, where one party defaults under a reciprocal contract, the other party may generally grant an appropriate additional period for performance or request the court to determine such a period. (WIPO)

This can be an important procedural step.

A termination notice sent too early can itself become disputed.

When Is Additional Time Unnecessary?

Article 124 identifies circumstances where an additional period is not required.

These include situations where granting additional time would clearly be ineffective, where delayed performance has become useless to the creditor because of the default, or where the contract indicates that performance will no longer be accepted if it does not occur at the specified time or within the specified period. (WIPO)

This is particularly important for time-sensitive commercial transactions.

Example: Seasonal Goods

Suppose a foreign retailer orders a large quantity of products for a specific holiday season.

The Turkish supplier knows that delivery after the season would be commercially useless.

If the contractual circumstances establish that timely delivery was essential, the buyer may have a significantly stronger argument for ending the contract without waiting indefinitely for performance.

Example: Exhibition Equipment

A company orders custom exhibition equipment for an event scheduled on 10 September.

The supplier proposes delivery on 20 September.

Performance after the event may provide no meaningful contractual benefit.

The legal analysis may therefore differ substantially from an ordinary short delay.

Creditor’s Options After Default

Article 125 of the Turkish Code of Obligations provides an important set of alternatives where the debtor fails to perform within the applicable additional period or where additional time is unnecessary.

The creditor can retain the right to demand performance together with damages caused by delay. Alternatively, subject to the statutory framework, the creditor may abandon performance and delay damages and seek compensation arising from non-performance, or withdraw from the contract. (WIPO)

Choosing between these remedies can have major financial consequences.

Do Not Terminate Before Deciding What You Want

A foreign company should first determine its commercial objective.

Does it still want the goods?

Does it want its advance payment returned?

Does it want replacement goods from another supplier?

Does it want compensation?

Does it want to preserve a long-term business relationship?

Termination is only one possible remedy.

Performance May Be More Valuable Than Termination

Suppose a Turkish manufacturer is producing highly specialized equipment unavailable elsewhere.

Even after a serious delay, the foreign buyer may prefer delivery plus compensation rather than termination.

The legal strategy should support the business objective rather than automatically destroy the transaction.

Termination and Recovery of Previous Payments

Where withdrawal from the contract occurs under the applicable Turkish Code of Obligations framework, Article 125 provides that the parties are released from reciprocal performance obligations and can request return of performances already rendered. The provision also addresses compensation where the defaulting party cannot establish absence of fault. (WIPO)

This can become particularly important where a foreign buyer has already paid a substantial advance.

Example: EUR 750,000 Advance

A foreign company orders machinery for EUR 1.5 million.

It pays EUR 750,000 in advance.

The Turkish manufacturer fails to manufacture or deliver the machinery and ultimately satisfies the legal conditions for withdrawal.

The buyer may then need to pursue restitution of the advance together with any additional legally recoverable losses.

But a legal entitlement to EUR 750,000 does not guarantee actual collection.

The supplier’s financial position must also be investigated.

Can a Foreign Company Terminate Without Compensation?

Potentially, where a valid contractual or statutory termination ground exists and the company complies with the applicable procedural requirements.

But “without liability” should be used carefully.

Even where termination itself is justified, disputes may remain concerning work already performed, delivered goods, accrued payment obligations, return of property, confidentiality, intellectual property or post-termination obligations.

Termination does not erase every contractual issue.

Wrongful Termination Risk

The greatest danger is terminating when no valid termination right exists.

The counterparty may then argue that the terminating foreign company itself breached the contract.

This can potentially result in damages claims.

Therefore, the termination ground should be documented before notice is sent.

Termination for Convenience

Some contracts permit one or both parties to terminate without establishing breach.

This is generally known internationally as termination for convenience.

The clause may require:

30 days’ notice,

60 days’ notice,

payment of outstanding work,

reimbursement of committed costs,

or a specific termination fee.

If the contract provides such a mechanism, the foreign company should follow it precisely.

Termination for Convenience Is Not Necessarily Cost-Free

A contract may allow termination at any time while still requiring compensation.

For example:

“The customer may terminate on 60 days’ written notice but shall pay all completed work and non-cancellable supplier commitments.”

The company has a termination right.

But it does not have a free exit.

Termination for Cause

Termination for cause normally depends on specified misconduct or breach.

The contract may permit immediate termination for certain serious violations while requiring a cure period for others.

Read these categories carefully.

Cure Periods

A commercial contract might state:

“If either party materially breaches this Agreement and fails to cure such breach within 30 days after written notice, the non-breaching party may terminate.”

If so, terminating on the day the breach occurs may violate the agreed procedure unless another immediate-termination provision applies.

Do Not Ignore Cure Notices

The notice should identify the breach clearly enough for the counterparty to understand what must be remedied.

Vague language such as “you have violated the agreement in several ways” may create unnecessary arguments.

Specify the relevant obligation.

Repeated Breaches

A single minor breach may not justify termination.

Repeated minor breaches can present a different picture.

If a supplier repeatedly delivers late despite multiple notices, the cumulative contractual history may become important.

Document every incident.

Defective Goods

A buyer receiving defective products should not automatically terminate the entire agreement.

The seriousness of the defect, possibility of repair or replacement, contractual warranty provisions and applicable legal regime should be examined.

For international sales, CISG rules can be particularly important.

CISG and Contract Avoidance

The CISG uses the concept of avoidance rather than simply applying the ordinary commercial expression “cancellation.”

Under Article 49, a buyer may declare the contract avoided where the seller’s failure amounts to a fundamental breach. In cases of non-delivery, avoidance may also become available where the seller fails to deliver within an additional period fixed under Article 47 or declares that it will not deliver within that period. (UNCITRAL)

Avoidance Is a Serious Remedy

UNCITRAL’s Digest describes avoidance for fundamental breach as a remedy of last resort and emphasizes the importance of the seriousness of the breach. (UNCITRAL)

This reflects an important commercial principle:

Not every problem should destroy the contract.

Fundamental Breach Under the CISG

UNCITRAL explains that the CISG allows an aggrieved party to require performance, claim damages or avoid the contract in case of fundamental breach. (UNCITRAL)

Whether a particular violation reaches that threshold depends on the circumstances.

A minor packaging defect and complete failure to deliver are not treated identically.

Notice of Avoidance

Under the CISG, avoidance requires appropriate notice.

A buyer should therefore avoid assuming that a contract automatically disappears merely because a fundamental breach occurred.

The termination communication itself matters. (UNCITRAL)

Timing Matters

The CISG also contains timing rules affecting avoidance after goods have been delivered.

For late delivery, Article 49 addresses declaration of avoidance within a reasonable time after the buyer becomes aware that delivery occurred. (UNCITRAL)

Foreign buyers should therefore obtain legal advice promptly rather than negotiating indefinitely.

Can a Contract Be Terminated for Defective Performance?

Potentially.

But first determine whether the defect can be cured.

For example, if 1,000 machines were ordered and five contain easily replaceable components, immediate cancellation of the entire contract may be disproportionate.

If all machines fundamentally fail the agreed safety specification, the analysis changes dramatically.

Failure to Pay

Foreign companies can also be suppliers.

A Turkish customer may receive goods but fail to pay.

The foreign seller should review payment deadlines, default provisions, security and any right to suspend further deliveries or terminate future obligations.

Continuing to ship goods to a customer already seriously in default can increase exposure.

Suspension Before Termination

Sometimes suspension is commercially safer than immediate termination.

A supplier may suspend further deliveries while demanding overdue payment where the contractual and legal framework permits.

The agreement should be checked before taking this step.

Anticipatory Breach

What if the counterparty announces before the deadline that it will not perform?

This can require immediate legal analysis.

For international sales, the CISG contains rules dealing with anticipatory breach and suspension, which UNCITRAL identifies as part of the Convention’s remedial framework. (UNCITRAL)

Waiting until the contractual deadline may not always be necessary or commercially sensible.

Insolvency and Financial Distress

Commercial contracts frequently permit termination when a counterparty enters specified insolvency proceedings.

But the exact trigger matters.

Financial difficulty is not necessarily identical to formal insolvency.

A termination clause should be reviewed before action is taken.

Enforcement Proceedings Against the Counterparty

Multiple enforcement proceedings can signal serious financial risk.

However, their existence does not automatically create a contractual termination right unless the agreement or applicable law provides one.

They may nevertheless affect the urgency of the strategy.

Loss of License

In regulated industries, loss of a necessary operating license can make performance impossible or unlawful.

Contracts in energy, transportation, financial services, pharmaceuticals and other regulated sectors should contain clear regulatory termination provisions.

Compliance Violations

Foreign companies increasingly include termination rights concerning sanctions, anti-bribery, export controls and compliance obligations.

Whether a suspected violation permits immediate termination depends heavily on contractual wording and applicable mandatory rules.

Fraud and Misrepresentation

Suppose a Turkish counterparty obtained the contract by making materially false statements about licenses, manufacturing capacity or ownership of assets.

The issue may extend beyond ordinary non-performance.

Misrepresentation, fraud and validity of consent may require separate analysis.

Do not treat every false commercial statement as merely another late-delivery issue.

Unauthorized Assignment

A contract may prohibit assignment without consent.

If the Turkish counterparty transfers material contractual rights or obligations to another entity without permission, determine whether the agreement classifies this as a termination event.

Change of Control

Foreign investors should check change-of-control clauses carefully.

The sale of shares in the Turkish counterparty may trigger termination rights even though the contracting legal entity technically remains unchanged.

This is particularly important in distribution, licensing and technology agreements.

Exclusivity Violations

Suppose a distributor has exclusive rights but begins representing a direct competitor contrary to contractual restrictions.

Whether the foreign company can terminate immediately depends on the exclusivity clause, cure provisions and seriousness of the violation.

Evidence should be collected before termination.

Confidentiality Breach

Serious disclosure of trade secrets or confidential information may justify immediate action under an appropriately drafted agreement.

The foreign company should preserve evidence of disclosure and evaluate both termination and protective remedies.

Intellectual Property Violations

Unauthorized use of trademarks, software, technical drawings or confidential manufacturing information can create separate termination and damages issues.

The company should consider whether urgent protective measures are required in addition to ending the agreement.

Force Majeure

Force majeure does not automatically mean either party can immediately terminate.

Read the clause.

Many contracts initially suspend obligations and allow termination only if the force majeure continues beyond a specified period.

For example:

“Either party may terminate if the force majeure event continues for more than 90 consecutive days.”

Force Majeure Notice

Contracts often require the affected party to provide notice within a specified period.

Failure to comply may affect contractual rights.

Foreign companies should examine whether the counterparty properly invoked the clause.

Economic Difficulty Is Not Automatically Force Majeure

A supplier may claim:

“Raw materials became expensive, so we cannot perform.”

Commercial difficulty, increased costs and genuine impossibility are not necessarily the same legal concept.

The contract and applicable law should be analyzed carefully.

Sanctions and Legal Prohibitions

Where performance becomes unlawful because of a binding legal restriction, the analysis can be substantially different from ordinary commercial inconvenience.

International businesses should coordinate sanctions and contractual advice before terminating.

Long-Term Commercial Contracts

Distribution, agency, supply, franchise and service relationships require particular care because they involve continuing obligations.

Article 126 of the Turkish Code of Obligations addresses default in continuing-performance contracts and provides, under its conditions, for performance and delay damages or termination together with compensation for losses resulting from premature ending of the contract. (WIPO)

This is different from treating every contract as a one-time sale.

Distribution Agreements

Before terminating a Turkish distributor, examine:

contract duration,

renewal,

sales targets,

exclusivity,

notice periods,

existing customer orders,

inventory,

trademarks,

post-termination obligations,

and potential compensation issues.

Distribution termination can create substantial secondary disputes.

Agency Agreements

Agency agreements deserve specialized analysis.

Turkish commercial legislation contains specific rules concerning agency relationships, including post-termination matters. The Turkish Commercial Code also expressly addresses certain consequences where termination occurs for justified reasons attributable to the other party.

Do not terminate an agency agreement using a generic supply-contract template.

Franchise Agreements

Franchise relationships can involve trademark licensing, know-how, supply obligations, territory and continuing fees.

Termination may therefore trigger several interconnected obligations.

A franchise exit strategy should identify what happens to branding, inventory, confidential information and customer-facing materials.

Joint Venture Agreements

Terminating a commercial agreement with a Turkish joint-venture partner may not end the shareholder relationship.

The company may still remain a shareholder.

Share transfer, deadlock, buy-out and corporate governance mechanisms should be examined separately.

Termination Does Not Automatically Cancel Share Ownership

This is an important distinction for foreign investors.

Ending a shareholders’ commercial cooperation agreement does not necessarily transfer shares back to the other party.

Corporate exit mechanisms must be implemented separately.

Termination Notice

A strong termination notice should normally identify:

the agreement,

relevant contractual provisions,

material facts,

previous default notices,

uncured breaches,

legal basis for termination,

effective date,

financial consequences,

return obligations,

and reservation of rights.

The precise content depends on the case.

Follow the Contractual Notice Clause

The agreement may require notice by registered mail, notary, courier or another specified method.

Sending an email may be commercially convenient but procedurally insufficient in some circumstances.

Check the clause.

Language of the Notice

International contracts may specify a governing language.

The termination notice should avoid ambiguity.

Where proceedings in Turkey are foreseeable, appropriate translation and evidentiary planning may also be useful.

Can WhatsApp Terminate a Commercial Contract?

Do not rely on informal messaging for a major commercial termination unless legal analysis confirms that it is sufficient.

Messaging records may be evidence, but evidentiary usefulness and compliance with contractual termination formalities are separate questions.

Do Not Write an Emotional Termination Notice

Statements such as:

“You are fraudsters and the contract is cancelled immediately”

can create unnecessary problems.

A professional notice should focus on objectively provable contractual facts.

Reserve All Rights

Where appropriate, the notice should reserve claims for repayment, damages, penalties, interest and other available remedies.

Do not unintentionally waive significant rights through careless wording.

Calculate the Financial Consequences Before Termination

A foreign company should prepare a termination balance.

For example:

Advance paid: EUR 400,000.

Goods received: EUR 100,000.

Undelivered value: EUR 300,000.

Replacement-purchase increase: EUR 80,000.

Contractual penalty: potentially EUR 30,000.

Additional provable loss: EUR 50,000.

This makes negotiation and litigation strategy considerably clearer.

Can Damages Be Claimed After Valid Termination?

Potentially.

Termination and damages are not necessarily mutually exclusive.

Article 125 of the Turkish Code of Obligations expressly addresses compensation consequences within its default and withdrawal framework. (WIPO)

For international sales, the CISG likewise includes damages within its remedial system. (UNCITRAL)

Replacement Contract

After termination, a foreign buyer may need to purchase equivalent goods elsewhere.

Preserve alternative quotations and the replacement contract.

These can become important evidence of damages.

Duty to Reduce Loss

Do not allow losses to increase unnecessarily merely because the other party breached.

Reasonable mitigation measures can materially affect damages analysis.

Seek alternative suppliers where commercially appropriate and document those efforts.

Contractual Penalty

A termination clause may be connected with a contractual penalty.

Determine whether the penalty applies to the particular breach and whether additional damages are preserved.

Avoid assuming that a penalty automatically replaces every other remedy.

Termination Fee

A termination-for-convenience clause may require a fixed exit payment.

Before exercising the right, calculate whether termination remains commercially worthwhile.

Sometimes completing the contract is cheaper than paying the agreed termination fee.

What Happens to Advance Payments?

The agreement should specify whether advances are refundable.

If termination results from the supplier’s breach, repayment rights may arise under the contract and applicable law.

Act quickly if the supplier’s financial condition is deteriorating.

What Happens to Delivered Goods?

Termination does not necessarily mean the buyer can simply discard products already delivered.

Determine whether they must be returned, preserved or paid for.

The consequences depend on the legal mechanism used.

Return of Confidential Information

Many contracts require documents, data, samples and technical information to be returned or destroyed after termination.

Implement these obligations carefully.

Intellectual Property After Termination

Trademark and software licenses may end automatically.

A former distributor continuing to use the foreign company’s trademark can create an urgent enforcement issue.

Monitor post-termination use.

Non-Compete Obligations

Some agreements contain post-termination restrictions.

Their enforceability depends on the type of contract, scope, duration and applicable legal rules.

They should be reviewed separately rather than assumed valid.

Existing Customer Orders

Termination can create uncertainty over pending orders.

The termination agreement or notice strategy should identify who will complete them and who receives payment.

Ignoring outstanding orders can create additional claims.

Data and Customer Information

Where the parties exchange personal or commercially sensitive data, post-termination handling should be addressed.

Access rights should be closed and data-return obligations implemented appropriately.

Can the Other Party Challenge Termination?

Yes.

The Turkish company may argue that:

no material breach occurred,

the breach was cured,

additional time was required,

notice was defective,

force majeure applied,

or the foreign company itself breached first.

The foreign company should therefore build the evidentiary file before terminating.

What If Both Parties Breached?

The case becomes more complicated.

For example, the Turkish supplier may have delivered late because the foreign buyer failed to provide required technical approvals.

A party should examine its own performance before accusing the counterparty of default.

Foreign Company’s Own Breach

Before termination, verify that all important buyer obligations have been satisfied.

Has payment been made?

Were specifications provided?

Were approvals delivered?

Was access to the project site provided?

A termination strategy is considerably weaker if the terminating party caused the problem.

Commercial Mediation

Where termination produces a monetary commercial claim pursued before Turkish courts, applicable mandatory mediation requirements should be examined.

Mediation may also provide an opportunity to negotiate an orderly commercial exit.

Termination Agreement

Sometimes mutual termination is safer than unilateral termination.

The parties can agree on:

effective date,

refunds,

outstanding invoices,

inventory,

damages,

customer contracts,

confidentiality,

intellectual property,

and release of claims.

A negotiated exit can eliminate uncertainty.

Mutual Release

A settlement may include mutual releases.

However, a foreign company should not sign a broad release before confirming that all payments and obligations have been completed.

The sequence matters.

Litigation in Turkey

Where Turkish courts have jurisdiction, disputes concerning validity of termination, repayment and damages may proceed through the applicable commercial procedures.

Jurisdiction should be checked before filing.

Arbitration

Many international contracts involving Turkish companies contain arbitration clauses.

A termination dispute can therefore belong before an arbitral tribunal rather than an ordinary court.

Review the clause before commencing proceedings.

Governing Law Is Critical

A Turkish counterparty does not automatically mean Turkish law governs the contract.

The agreement may choose English law, Swiss law or another system.

The termination analysis must begin with the applicable-law clause.

Court Jurisdiction and Governing Law Are Different

A contract can potentially provide for one country’s law while selecting a different dispute-resolution forum.

Do not confuse governing law with jurisdiction.

Both clauses must be reviewed.

Emergency Protective Measures

If termination creates an immediate risk that assets, confidential information or intellectual property will disappear or be misused, interim remedies may need to be considered.

Their availability depends on the circumstances and applicable procedural framework.

Do Not Wait Until the Counterparty Has No Assets

A valid termination claim is only part of the strategy.

If the foreign company expects a substantial refund, investigate collection prospects early.

A successful decision against an insolvent company may have limited practical value.

A Practical Termination Checklist

Before cancelling a commercial contract with a Turkish company, verify:

Contract → Governing Law → Termination Clause → Nature of Breach → Evidence → Default → Cure Period → Additional Time → Termination Ground → Notice Formalities → Refund → Damages → Security → Assets → Dispute Resolution → Post-Termination Obligations.

This simple sequence can prevent expensive mistakes.

Example: Foreign Buyer Versus Turkish Manufacturer

Assume a foreign company signs a EUR 2 million machinery contract.

EUR 800,000 is paid in advance.

Delivery is repeatedly delayed.

The manufacturer misses several written deadlines and ultimately admits that production cannot be completed for another six months.

The buyer should examine whether further performance remains useful, whether additional time is legally necessary, whether the contractual termination clause applies, whether the CISG governs the sale and whether avoidance requirements are satisfied.

It should simultaneously investigate recovery of the EUR 800,000 and calculate substitute-purchase and delay losses.

Sending “we cancel the contract” before performing this analysis could unnecessarily create a second dispute about whether cancellation itself was valid.

Example: Foreign Supplier and Turkish Distributor

A foreign manufacturer grants exclusive distribution rights in Turkey.

The distributor repeatedly fails to achieve agreed minimum purchases and begins selling competing products.

The manufacturer wants immediate termination.

Before acting, it should review whether sales targets are conditions of termination, whether a cure period applies, whether competition activity constitutes an immediate termination event and whether post-termination inventory, trademark and customer issues have been addressed.

The exit should be planned as carefully as the original market entry.

Frequently Asked Questions

1. Can a foreign company terminate a contract with a Turkish company immediately?

Potentially, but only where the contract or applicable law permits immediate termination. Some breaches require an additional performance or cure period first.

2. When is additional time unnecessary under Turkish law?

Article 124 of the Turkish Code of Obligations identifies circumstances including where granting additional time would clearly be ineffective, delayed performance has become useless to the creditor, or the contract shows that performance after the specified time will no longer be accepted. (WIPO)

3. Can termination occur without paying compensation?

Potentially where termination is legally justified, but accrued obligations and other post-termination liabilities may remain. “Valid termination” does not necessarily mean “no payment whatsoever.”

4. What happens if we terminate without a valid reason?

The counterparty may challenge the termination and potentially seek damages for wrongful termination.

5. Can an advance payment be recovered?

Potentially. Under the Article 125 framework, withdrawal from a reciprocal contract can involve return of performances already rendered. (WIPO)

6. Can we claim damages as well?

Potentially. The available damages depend on the termination mechanism, breach, contract and governing law.

7. Does the CISG allow cancellation?

The CISG provides for avoidance, including where the seller commits a fundamental breach and in specified non-delivery situations involving an additional performance period. (UNCITRAL)

8. Does selecting Turkish law automatically exclude the CISG?

Not necessarily. CISG applicability should be examined separately for qualifying international sales transactions.

9. Can we terminate because the Turkish company is experiencing financial problems?

Not automatically. Review contractual insolvency provisions and determine whether the relevant termination trigger has actually occurred.

10. Should the termination notice be prepared by a lawyer?

For substantial commercial contracts, legal review is strongly advisable because an improperly exercised termination right can transform the terminating company into the alleged breaching party.

Legal Assistance for Foreign Companies Terminating Commercial Contracts in Turkey

A foreign company should not ask only “Can we terminate?”

It should ask:

What is our exact termination ground?

Is the breach sufficiently serious?

Must we grant a cure or additional performance period?

What happens to the advance payment?

Can we claim damages?

Could the Turkish counterparty claim wrongful termination?

What assets exist if repayment becomes necessary?

Which court or arbitral tribunal will decide the dispute?

Turkish law provides significant remedies for creditor default situations. Articles 123–125 of the Turkish Code of Obligations address additional performance periods, circumstances where such periods are unnecessary and the creditor’s alternative remedies, while Article 126 separately addresses continuing-performance contracts. (WIPO)

For qualifying international sales, the CISG can add another important layer. UNCITRAL confirms that the Convention addresses performance, damages, anticipatory breach and avoidance for fundamental breach. (UNCITRAL)

Fırat Fesih Kaya Law Office provides legal assistance to foreign companies, international buyers, suppliers and investors concerning commercial contract termination in Turkey, wrongful termination risk, Turkish supplier default, advance-payment recovery, distribution agreement termination, international sales contracts, CISG disputes, damages, commercial mediation, litigation and international arbitration.

Legal assistance may include reviewing termination and governing-law clauses, documenting contractual breaches, preparing default and cure notices, evaluating immediate termination rights, drafting termination notices, calculating repayment and damages claims, negotiating mutual termination agreements and representing foreign companies in subsequent commercial disputes.

Phone: +90 312 434 22 22
Mobile / WhatsApp: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Office: Mevlana Boulevard No:221, Yildirim Tower, Balgat, Cankaya, Ankara, Turkey

For foreign companies, the safest principle is clear: do not terminate first and investigate the legal basis later. Establish the breach, select the correct remedy, comply with notice and cure requirements, calculate the financial consequences and only then execute the exit strategy.