Force Majeure vs Hardship in Turkish Commercial Contracts: What Foreign Companies Should Know (2026 Updated Guide)

Understand the difference between force majeure and hardship in Turkish commercial contracts, including impossibility, excessive burden, price increases, currency changes, renegotiation, adaptation and termination rights for foreign companies.

International companies doing business in Turkey frequently encounter events that make contractual performance more difficult, expensive or sometimes impossible. Currency fluctuations, extraordinary increases in raw-material prices, sanctions, import restrictions, supply-chain disruptions, government measures, natural disasters, wars and transportation problems can fundamentally alter the commercial assumptions on which a contract was signed. However, an event that makes performance more expensive does not automatically constitute force majeure, and an event described as force majeure in a contract may have very different consequences from legal hardship. For foreign companies, distinguishing force majeure, impossibility of performance and excessive difficulty of performance is essential before suspending performance, refusing delivery, demanding a price increase or terminating a Turkish commercial contract.

What Is Force Majeure in Turkish Commercial Contracts?

Turkish contract law does not resolve every commercial force majeure dispute through one universal definition applicable identically to every agreement. The contractual wording, nature of the obligation, applicable provisions of the Turkish Code of Obligations and circumstances of the event must be considered together.

Commercial contracts therefore commonly contain detailed force majeure clauses defining qualifying events and their consequences.

What Is Hardship?

Hardship generally concerns a fundamentally different situation. Performance may still be possible, but an extraordinary and unforeseeable development may make continued performance excessively burdensome for one party and seriously disturb the contractual balance.

Under Article 138 of the Turkish Code of Obligations, adaptation of a contract may become relevant where extraordinary circumstances that were not foreseen and could not reasonably have been expected at the time of contracting fundamentally alter the circumstances against the debtor, without being attributable to the debtor, to such an extent that requiring performance would conflict with good faith.

The specific statutory requirements must be established in each case.

Force Majeure and Hardship Are Not the Same

The practical distinction can be summarized simply: force majeure frequently concerns whether an obligation can be performed because of an external event, whereas hardship generally concerns whether requiring performance on the original terms has become excessively burdensome despite performance remaining possible.

The legal consequences can therefore differ substantially.

A Cost Increase Does Not Automatically Create Force Majeure

Suppose a foreign supplier agrees to sell industrial equipment to a Turkish buyer for a fixed price. Six months later, production and transportation costs increase dramatically.

The supplier cannot automatically declare force majeure merely because the transaction has become less profitable.

The contract, allocation of price risk, foreseeability of the increase and severity of the change must be examined.

Currency Depreciation Can Create Complex Disputes

Foreign exchange movements frequently lead to hardship arguments in long-term Turkish contracts. However, ordinary currency volatility is part of commercial life, particularly where sophisticated businesses deliberately choose a particular currency structure.

A substantial exchange-rate movement therefore does not automatically establish a right to adaptation.

The court may consider the entire contractual allocation of risk.

Inflation Alone Does Not Automatically Cancel a Contract

High inflation can significantly affect long-term supply, construction, distribution and service agreements. Nevertheless, a company should not simply stop performing because its costs have increased.

Whether adaptation may be available depends on the statutory conditions, contractual terms and specific economic impact on the transaction.

What Events Can Potentially Constitute Force Majeure?

Depending on the contract and circumstances, potential events may include major natural disasters, war, government prohibitions, certain extraordinary regulatory interventions, severe transportation restrictions or other events beyond the parties’ control.

The event must still be analyzed in relation to the particular obligation.

A flood affecting an unrelated region, for example, does not excuse a supplier whose production and delivery remain unaffected.

Sanctions Can Create Force Majeure or Hardship Questions

International sanctions can prevent banks from processing payments, prohibit dealings with certain entities, disrupt shipping or prevent delivery of particular goods.

Whether sanctions constitute force majeure depends on the contractual wording, applicable sanctions framework, affected parties and actual impact on performance.

If performance remains legally possible but becomes substantially more expensive, the dispute may instead involve hardship or contractual risk allocation.

Import and Export Restrictions May Affect Performance

A new import prohibition, export licensing restriction or government measure can directly affect international supply contracts.

The parties should determine whether the restriction makes performance legally impossible, temporarily prevents performance or merely increases compliance costs.

These distinctions can lead to different remedies.

Supply-Chain Problems Are Not Automatically Force Majeure

A supplier cannot necessarily rely on force majeure merely because one subcontractor failed to deliver.

The company should establish why alternative sourcing was unavailable, whether the disruption was foreseeable and whether reasonable mitigation measures were attempted.

Supplier Failure Should Be Investigated

If the contract expressly allocates subcontractor or supplier risk to one party, a third-party failure may remain that party’s commercial responsibility.

The force majeure clause should therefore be reviewed before issuing any notice.

Contract Language Is Critical

International agreements frequently define force majeure more precisely than general statutory principles.

A clause may specify covered events, excluded events, notification periods, evidence requirements, mitigation obligations, suspension rights and termination consequences.

The exact contract should therefore be the starting point.

Check Whether the Event Is Specifically Listed

If the clause expressly includes war, embargo, epidemic, government prohibition, earthquake or another event, that wording is important.

However, merely appearing on a list may not always be sufficient. The party generally still needs to establish the connection between the event and its inability to perform as required under the contractual framework.

Review Exclusions

Some contracts expressly exclude lack of funds, currency changes, ordinary market fluctuations, supplier failures or increases in raw-material prices.

Such provisions can substantially affect a later hardship or force majeure dispute.

Notice Requirements Can Determine the Outcome

Force majeure clauses commonly require prompt written notice after the affected party becomes aware of the event.

The notice may need to identify the event, affected obligations, anticipated duration and mitigation measures.

Missing a contractual notice requirement can materially weaken a claim.

Do Not Send a Generic Force Majeure Notice

A short message stating “due to economic conditions we declare force majeure” may provide little protection.

The notice should connect the event to specific contractual obligations and explain why performance has been affected.

Preserve Evidence Immediately

A company relying on force majeure should preserve government decisions, transportation records, supplier correspondence, bank rejection notices, production records and other evidence demonstrating the actual effect of the event.

Evidence should be created and preserved while events are occurring rather than reconstructed months later.

Mitigation Is Important

The affected party should consider reasonable alternatives.

Could goods be sourced elsewhere? Could another carrier be used? Could performance be delayed rather than abandoned? Could a different payment channel lawfully resolve the problem?

Failure to consider reasonable mitigation can weaken the company’s position.

Temporary Impossibility May Suspend Rather Than End Performance

Some events prevent performance only temporarily.

Whether obligations are suspended, extended or ultimately terminable depends on the contract and applicable law.

Long-term force majeure clauses frequently specify a period after which either party may terminate.

Permanent Impossibility Raises Different Issues

Where performance becomes objectively impossible for reasons for which the debtor is not responsible, provisions concerning impossibility under the Turkish Code of Obligations may become relevant.

The consequences should be distinguished from ordinary commercial inconvenience.

Partial Impossibility Should Be Considered Separately

Sometimes only part of the contract becomes impossible.

The remaining obligations may still be capable of performance. Whether the contract continues depends on the circumstances, the importance of the affected obligation and applicable contractual and statutory rules.

What Does Article 138 Provide for Hardship?

Article 138 provides a potential mechanism for contractual adaptation where extraordinary circumstances fundamentally change the assumptions existing at contract formation and make performance excessively burdensome contrary to good faith, provided the statutory conditions are satisfied.

The debtor may request adaptation of the contract to the changed circumstances.

If adaptation is not possible, termination consequences may need to be considered according to the nature of the contractual relationship.

Adaptation Is Not Automatic

A company cannot unilaterally rewrite the contract simply because it believes Article 138 applies.

If the parties cannot negotiate a solution, judicial adaptation may become necessary.

Continuing Performance Requires Careful Legal Planning

Article 138 contains important requirements concerning whether the obligation has already been performed and whether rights were reserved when performance occurred.

A party considering adaptation should therefore obtain legal advice before continuing performance without reservation.

Can the Court Change the Contract Price?

Where the statutory requirements for adaptation are established, judicial adaptation may potentially concern contractual terms necessary to restore the disturbed balance.

The appropriate remedy depends on the specific agreement and circumstances.

Can a Foreign Company Terminate Instead?

Termination should not be treated as the automatic first remedy in every hardship case.

The statutory structure gives importance to adaptation. The legal consequences can also differ between instantaneous contracts and continuing contractual relationships.

The agreement itself may contain additional termination rights.

Fixed-Price Contracts Require Special Attention

Construction, machinery, energy and long-term supply agreements often use fixed prices precisely to allocate commercial risk.

A party seeking adaptation must therefore address the argument that the relevant cost risk was contractually assumed.

Price Adjustment Clauses Can Change the Analysis

If the agreement already contains an indexation or price-adjustment mechanism, that mechanism can be highly relevant.

The court may examine whether the parties already anticipated and allocated the economic risk now relied upon as hardship.

Renegotiation Clauses Should Be Used

Some international commercial agreements expressly require renegotiation following extraordinary changes.

Follow the contractual procedure carefully and document proposals made in good faith.

Hardship Does Not Automatically Excuse Non-Payment

A Turkish buyer experiencing financial difficulty cannot necessarily stop paying invoices by declaring hardship.

Ordinary liquidity problems and inability to finance a transaction should be distinguished from the extraordinary circumstances contemplated by Article 138.

Force Majeure Does Not Automatically Eliminate Every Obligation

Even where force majeure exists, unaffected obligations may continue.

Confidentiality, return of property, payment for goods already delivered and other provisions may remain enforceable depending on the contract.

Bank Guarantees Require Separate Analysis

A force majeure dispute under the underlying contract does not automatically prevent a beneficiary from calling an independent bank guarantee.

Companies facing a guarantee call should analyze the guarantee instrument separately and consider whether urgent judicial protection is legally available.

Liquidated Damages and Delay Penalties May Become Disputed

If delivery is delayed by a qualifying event, the supplier may argue that contractual delay damages should not accrue during the excused period.

The answer depends heavily on the contract and the cause of delay.

Document the Causal Connection

The party relying on force majeure should demonstrate a timeline:

the extraordinary event occurred; it affected a particular operation; that impact prevented or delayed a contractual obligation; reasonable alternatives were unavailable; and the party acted to reduce the consequences.

A clear chronology can be decisive.

Foreign Law and Turkish Law Clauses Must Be Distinguished

An international contract involving a Turkish company may select foreign substantive law.

Before relying on Turkish hardship principles, determine the governing law and dispute-resolution clause.

Jurisdiction and applicable law are separate questions.

Arbitration Clauses Should Be Checked

Many cross-border commercial agreements refer disputes to arbitration.

A company should determine the seat, institution, governing rules, language and interim-measure provisions before commencing proceedings.

Turkish Courts May Become Relevant

Where Turkish law governs and the dispute falls within Turkish jurisdiction, adaptation, termination, receivable and damages claims may come before Turkish courts.

Jurisdiction clauses and arbitration agreements should be reviewed first.

What Should a Foreign Company Do When an Extraordinary Event Occurs?

The company should immediately review the contract, identify the affected obligations, classify the event as possible force majeure, impossibility or hardship, check notification deadlines, preserve evidence, investigate alternatives, quantify the financial effect and avoid making premature statements admitting liability.

Avoid Immediately Stopping Performance

Unjustified suspension can itself constitute breach.

Before stopping deliveries or payments, determine whether the contract or applicable law actually provides a right to suspend.

Quantify the Hardship

A party seeking adaptation should demonstrate the economic effect with evidence.

Prepare original contract assumptions, historical costs, current costs, exchange-rate effects, raw-material changes, freight increases and profit or loss calculations.

Compare the Original Risk Allocation

The central question is not merely whether costs increased.

It is also whether the contract placed that particular risk on the affected party.

Negotiation Can Be Commercially Preferable

Where both companies want the commercial relationship to continue, negotiated adaptation can be more efficient than litigation.

Possible solutions include temporary price adjustment, revised delivery schedules, volume changes or risk-sharing arrangements.

Any amendment should be documented clearly.

2026 Contract Drafting Strategy for Foreign Companies

Foreign companies entering Turkish commercial contracts should avoid generic force majeure clauses copied from unrelated agreements. The contract should address force majeure, hardship, sanctions, government restrictions, supply-chain interruptions, currency risk, inflation, price adjustment, notice requirements, mitigation, suspension, termination and allocation of additional costs separately.

A properly drafted clause can significantly reduce uncertainty when extraordinary events occur.

Frequently Asked Questions

Is force majeure specifically defined for every Turkish commercial contract?

No single contractual definition applies identically to every commercial relationship. The contract and applicable Turkish law must be analyzed together.

Is a major price increase force majeure?

Not automatically. Increased cost may instead raise hardship questions, depending on the circumstances and contractual risk allocation.

Can currency depreciation justify contract adaptation?

Potentially, but currency movement alone does not automatically satisfy Article 138. The entire transaction and statutory conditions must be examined.

Can sanctions constitute force majeure?

Potentially, particularly where they legally prevent payment, shipment or performance. The sanctions measure, contractual clause and causal effect must be analyzed.

Can a foreign company simply stop performing?

Not safely without establishing a contractual or legal basis. Unjustified suspension can constitute breach.

Can Turkish courts adapt the contract?

Potentially, where the requirements for adaptation under Turkish law are satisfied.

Can the contract be terminated because of hardship?

Potentially, but adaptation generally needs to be considered within the statutory framework before assuming termination is available.

Does a force majeure notice need to be written?

The contract may require written notice within a specified period. The contractual notice mechanism should be followed strictly.

What evidence should the company preserve?

Government measures, supplier correspondence, transport records, bank communications, cost data, production records and evidence of mitigation efforts can all be important.

What is the main difference between force majeure and hardship?

Force majeure commonly concerns an event preventing or materially obstructing performance, while hardship concerns an extraordinary change that leaves performance possible but makes the original contractual burden excessively difficult. The legal consequences and remedies are therefore not necessarily the same.

Client-Focused Legal Support for International Commercial Contract Disputes

Foreign companies facing force majeure or hardship disputes in Turkey should assess the contract before suspending performance, refusing delivery, demanding a price adjustment or terminating the commercial relationship. Fırat Fesih Kaya Law Office assists international companies, foreign investors, manufacturers, exporters and shareholders with Turkish commercial contract disputes, contract adaptation claims, supply agreements, sanctions-related performance problems, termination disputes, damages claims and cross-border commercial litigation.

Lawyer Fırat Fesih Kaya provides legal assistance in evaluating force majeure and hardship clauses, preparing contractual notices, negotiating contract adaptations, assessing termination rights and representing foreign companies in commercial disputes.

Phone: +90 312 434 22 22

Mobile / WhatsApp: +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