Contract Signed by an Unauthorized Employee of a Turkish Company: Is the Agreement Binding? 2026 Updated Guide

An employee signs a contract without authority on behalf of a Turkish company. Learn when the agreement may bind the company, how authority is verified, what happens after unauthorized representation, and what foreign counterparties should do.

Foreign companies doing business in Turkey frequently negotiate contracts through sales managers, purchasing personnel, business development employees, project managers or other company representatives. A serious dispute can arise when the Turkish company later argues that the employee who signed the agreement did not have authority to bind the company. This issue can affect supply agreements, distribution contracts, service agreements, purchase orders, settlement agreements and other commercial transactions. Whether the agreement binds the Turkish company cannot be determined merely from the employee’s job title. The authority granted to the person, the company’s representation structure, the circumstances surrounding the transaction, any subsequent approval and the conduct of the parties must be examined together.

Why Does Signing Authority Matter?

A company acts through natural persons. However, not every employee automatically has authority to conclude every type of contract on behalf of the company.

A person may have authority to negotiate commercial terms without having authority to execute the final agreement.

Job Title Alone May Not Establish Authority

Titles such as “Sales Manager,” “Country Manager,” “Procurement Manager” or “Business Development Director” can create commercial expectations, but the legal authority of the individual should be verified separately.

Foreign counterparties should not assume that a senior-sounding title automatically permits the employee to sign a high-value agreement.

Start With the Company’s Representation Structure

The first question is who is legally authorized to represent the Turkish company.

Depending on the company’s legal form and internal structure, representation may belong to directors, managers or other persons granted representation authority.

Check Whether Joint Signatures Are Required

Some companies may be represented by one authorized person individually, while others require two or more authorized persons to sign together.

A contract containing only one signature can therefore become disputed if the company’s valid representation structure required joint signatures.

Review the Trade Registry Records

Available corporate registration and representation records can be important when determining who was authorized to represent the company at the time the contract was executed.

The relevant date is important because representation authority can change.

Signature Circulars and Authority Documents Can Be Relevant

Commercial transactions frequently involve documents showing authorized signatories and the manner in which they may represent the company.

These documents should be examined together with current corporate records rather than relied upon mechanically.

Internal Authorization May Also Matter

An employee may receive authority through corporate resolutions, powers of attorney or other valid authorization mechanisms.

The scope of that authority should be reviewed carefully.

Authority Can Be Limited

A representative may have authority only for certain transactions, amounts or categories of business.

For example, an employee might be authorized to sign routine purchase orders but not a multimillion-dollar long-term supply agreement.

Was the Employee Completely Unauthorized?

This should be distinguished from a situation in which the employee had representation authority but allegedly exceeded an internal limitation.

The legal consequences can differ significantly.

Unauthorized Representation Can Create a Pending Situation

Where a person concludes a transaction on behalf of another without sufficient authority, the effect of the transaction can depend on whether the represented party subsequently approves it.

For corporate disputes, subsequent conduct therefore becomes extremely important.

Can the Turkish Company Approve the Contract Later?

Potentially, yes. Subsequent approval can become decisive where the original representative lacked sufficient authority.

The parties should investigate whether the company expressly approved the transaction after signature.

Approval Does Not Always Need to Be Examined Only Through a Formal Letter

The company’s subsequent conduct may become relevant depending on the circumstances.

For example, accepting contractual performance, issuing invoices, making payments, delivering goods or repeatedly acting according to the agreement can create important evidence when determining whether the company adopted the transaction.

Acceptance of Goods Can Be Important

Suppose an unauthorized purchasing employee signs a supply agreement and the Turkish company subsequently receives and uses the delivered goods.

The company may face significant difficulty if it later attempts to rely solely on the original authority defect without addressing its subsequent conduct.

The exact circumstances should nevertheless be examined individually.

Payments Made Under the Contract Are Strong Evidence

Bank transfers referring to the agreement, invoices approved by the company or payments calculated according to contractual terms may support an argument that the company recognized the transaction.

Preserve complete financial records.

Performance Over Several Months Can Change the Dispute

A company that repeatedly performs an agreement for months and raises the authority objection only after a commercial dispute develops presents a different factual situation from a company that rejects the purported agreement immediately after discovering it.

Create a detailed chronology.

Email Correspondence Can Be Critical

Review emails involving directors, authorized managers and other company representatives.

If senior management was copied on negotiations, approved commercial terms or instructed performance, those communications may become important evidence.

WhatsApp and Other Business Communications May Also Matter

Commercial negotiations increasingly occur through messaging platforms.

Preserve relevant communications lawfully and in their original context rather than relying only on isolated screenshots.

Company Letterhead Does Not Automatically Prove Authority

A contract printed on corporate letterhead can support the surrounding factual picture, but it does not necessarily establish that the individual signing it had legal authority.

The authority question should still be verified.

Corporate Email Address Is Not Enough by Itself

An employee using an official company email address may clearly be acting in a business capacity, but that does not necessarily mean the person has unlimited contracting authority.

Company Stamp Is Not Conclusive by Itself

The existence of a company stamp should not automatically be treated as proof of valid representation.

The identity and authority of the signatory remain important.

What If the Employee Was Introduced as Authorized?

The foreign counterparty should preserve evidence showing how the Turkish company presented the employee during negotiations.

Introductions by directors, participation in official meetings, previous contracts and instructions from management may become relevant to the factual assessment.

Previous Transactions With the Same Employee Can Be Important

If the same employee signed numerous previous contracts that the company fully performed without objection, those transactions may be relevant evidence.

However, previous acceptance should not automatically be assumed to grant unlimited authority for every future transaction.

Contract Value Matters

A foreign company should apply stronger authority verification procedures as transaction value and risk increase.

A routine order and a major acquisition, guarantee, exclusivity agreement or long-term supply contract should not necessarily receive the same level of authority due diligence.

Foreign Counterparties Should Conduct Authority Due Diligence

Before executing an important contract with a Turkish company, request evidence identifying authorized representatives and the applicable signing method.

This is significantly easier than litigating authority after performance has begun.

What If the Contract Was Signed Electronically?

Electronic execution does not eliminate the authority issue.

The identity of the person signing and their power to represent the company still need to be established.

What If Only a Scanned Signature Was Used?

The parties may face both authority and evidentiary questions.

Preserve the original email transmission, attachments, negotiation history and subsequent performance records.

Purchase Orders Require Separate Attention

Many international supply relationships operate through purchase orders rather than one comprehensive contract.

Determine who issued and accepted each order and whether the company’s established commercial practice supports the claimed authority.

Framework Agreement and Purchase Order Authority May Differ

A manager may be permitted to issue individual purchase orders under an existing framework agreement without being authorized to execute the framework agreement itself.

The transaction structure should therefore be analyzed document by document.

Unauthorized Amendments Can Also Cause Problems

Even where the original agreement was validly signed, a later amendment may be executed by someone without authority.

Price changes, extensions, termination agreements and settlements should therefore receive the same authority checks as the original contract.

Settlement Agreements Require Particular Caution

A commercial employee’s authority to negotiate a dispute does not necessarily mean the employee can waive substantial company claims or conclude a binding settlement.

Obtain clear authorization for significant settlements.

Guarantees and Security Documents Require Careful Review

Transactions involving guarantees, undertakings or other significant financial obligations can raise additional corporate authority issues.

Foreign counterparties should not rely solely on the authority used for ordinary sales transactions.

What If the Company Claims the Employee Acted Outside Their Instructions?

Determine whether the alleged limitation was merely internal or legally relevant to the third party.

The answer can depend on the nature of the representation authority, how restrictions were established and what the counterparty knew or should have understood.

Internal Company Rules Are Not Always Known to the Counterparty

A Turkish company may argue that its employee violated an internal approval policy.

The legal effect of that argument cannot be determined simply by showing that an internal rule existed.

The external representation position and circumstances known to the counterparty must also be examined.

What If the Foreign Company Knew About the Limitation?

The counterparty’s knowledge can become important.

If the foreign company knew that board approval or a second signature was required but proceeded without it, its position may be significantly weaker.

Due Diligence Records Should Be Preserved

Keep registry documents, powers of attorney, signature documents, board communications and any representations concerning authority.

These records may become essential years later.

Can the Unauthorized Employee Become Personally Liable?

Potential liability of the purported representative may arise depending on the legal circumstances surrounding the unauthorized representation and the counterparty’s knowledge.

This should be analyzed separately from whether the company itself became bound.

Do Not Automatically Sue Only the Employee

The primary commercial question is often whether the Turkish company approved, performed or otherwise became bound by the transaction.

A complete factual investigation should therefore precede litigation strategy.

What If the Company Refuses to Perform?

Send a structured notice identifying the agreement, signatory, authority evidence, subsequent approval and performance.

Request the company to clarify its position formally.

Preserve Evidence Before Litigation

Collect the signed contract, drafts, emails, messages, invoices, delivery records, bank transfers, meeting records, purchase orders and corporate documents.

Authority disputes are often won or lost through the surrounding documentary record.

Consider Interim Measures Where Necessary

If the authority dispute arises while assets, goods or payments are at immediate risk, available interim judicial protection may need to be evaluated according to the circumstances.

Governing Law Must Be Checked

International agreements may contain a foreign governing-law clause.

Do not assume Turkish substantive law governs every authority dispute merely because one party is a Turkish company.

Jurisdiction and Arbitration Clauses Also Matter

A disputed contract may contain Turkish court jurisdiction, foreign jurisdiction or arbitration provisions.

An authority challenge can sometimes extend to the dispute-resolution clause itself, making careful procedural analysis necessary.

Foreign Judgments and Arbitral Awards Create Additional Issues

Where proceedings occur outside Turkey, enforcement against a Turkish company can later raise separate recognition or enforcement questions.

Authority documentation should therefore be prepared with potential cross-border enforcement in mind.

Practical Due Diligence Before Signing

For significant contracts, a foreign counterparty should identify the Turkish company’s current authorized representatives, determine whether individual or joint representation applies, obtain appropriate authority documents, check the scope of any power of attorney, confirm authority for unusually significant transactions and preserve the documents used in that verification.

What Should a Foreign Company Do After Discovering an Authority Problem?

Do not immediately assume the contract is worthless.

First determine the signatory’s actual authority, examine corporate records, investigate subsequent approval, review performance, preserve communications and identify whether authorized representatives knowingly accepted benefits under the agreement.

Frequently Asked Questions

Is a contract automatically invalid if an unauthorized employee signed it?

Not necessarily. The representative’s authority, subsequent approval and the company’s later conduct must be examined.

Does a manager’s job title prove signing authority?

No. Job title alone should not be treated as conclusive evidence of corporate representation authority.

Can the company approve the agreement after signature?

Potentially. Subsequent approval can have significant legal consequences.

Can payment under the contract prove approval?

Payments and other performance can constitute important evidence, although the complete circumstances must be analyzed.

What if the company used the goods but later claims the contract was unauthorized?

Acceptance and use of contractual performance can be highly relevant to the dispute.

Does a company stamp make the agreement binding?

Not automatically. The authority of the person acting for the company should still be examined.

What if two signatures were required but only one person signed?

The company’s representation structure and any subsequent approval should be investigated carefully.

Can an unauthorized employee become personally responsible?

Potentially, depending on the circumstances and applicable rules concerning unauthorized representation.

Should foreign companies check authority before signing?

Yes. Authority verification is particularly important for high-value, long-term or strategically significant contracts.

What is the most important evidence after an authority dispute arises?

The strongest file usually combines corporate authority records with evidence of what happened after signature—payments, deliveries, invoices, management communications and other conduct showing whether the Turkish company accepted or rejected the transaction.

Client-Focused Legal Support for Unauthorized Signature and Commercial Contract Disputes

Contracts allegedly signed without authority can create disputes concerning corporate representation, subsequent approval, payment obligations, supply contracts, purchase orders, settlements, guarantees, arbitration and cross-border enforcement. Fırat Fesih Kaya Law Office assists foreign companies, international investors and commercial counterparties in disputes involving contracts executed with Turkish companies. Lawyer Fırat Fesih Kaya provides legal assistance in reviewing representation authority, corporate records and contractual evidence, evaluating whether unauthorized transactions became binding, pursuing payment and performance claims and defending cross-border commercial interests 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, Office No:148
06520 Balgat, Çankaya, Ankara, Turkey