Foreign Company Pays for Custom Software in Turkey but the Developer Does Not Deliver: Legal Remedies 2026 Updated Guide

A foreign company pays a Turkish developer for custom software but the project is not delivered. Learn about termination, refund claims, damages, source code, evidence, interim measures and litigation in Turkey.

A foreign company may pay substantial amounts to a Turkish software developer for an ERP system, mobile application, SaaS platform, website, marketplace, artificial-intelligence solution or other custom software only to discover that the project is repeatedly delayed, substantially incomplete or never delivered. The developer may request additional payments, claim that requirements changed, provide an unusable prototype or stop communicating entirely. In such cases, the foreign customer should immediately examine the contract, project specifications, payment schedule, acceptance mechanism, intellectual-property provisions and correspondence. Depending on the contractual structure and circumstances, remedies may include requiring performance, terminating the agreement, recovering advance payments, claiming damages, protecting source code and project materials, obtaining interim measures and commencing Turkish court or arbitration proceedings.

First Determine Exactly What the Developer Promised

Custom software disputes frequently become difficult because the parties disagree about the scope of the project. The foreign company should identify the contractual deliverables precisely.

Relevant materials may include the main development agreement, statement of work, technical specifications, project proposal, milestone schedule, user stories, annexes, quotations, emails and written change requests.

The central question is not simply whether “software was delivered,” but whether the developer delivered what the parties contractually agreed.

A Prototype Is Not Necessarily Final Delivery

A developer may argue that providing access to a test environment constitutes delivery. This depends on the contract.

A prototype, beta version or partially functioning application should not automatically be treated as contractual completion if significant agreed functions remain unavailable.

Review the Delivery Deadline

Determine whether the agreement contains a fixed completion date, milestone dates or another method for determining when performance becomes due.

If deadlines were subsequently extended, preserve evidence showing who requested the extension and what conditions were agreed.

Repeated Delay Should Be Documented

Prepare a chronological project timeline showing the contractual start date, payments, milestones, promised delivery dates, extensions, demonstrations, defects reported and communications concerning delays.

This timeline can become one of the most useful documents in later litigation.

Determine Whether the Foreign Company Caused Part of the Delay

Software developers frequently defend non-delivery claims by alleging that the customer failed to provide data, approvals, API credentials, technical requirements or timely feedback.

The foreign company should therefore preserve evidence demonstrating its own cooperation.

Scope-Creep Allegations Require Careful Review

Developers may claim that the customer continually requested new features beyond the original scope.

Separate original contractual requirements from genuine additional requests. Change orders, revised quotations and correspondence can help determine whether an alleged “new feature” was actually included from the beginning.

Send a Formal Notice Before the Dispute Escalates

Where appropriate, the customer should formally identify the outstanding obligations, contractual breaches and required corrective action.

The notice should clearly describe what remains undelivered rather than simply stating that the project is unsatisfactory.

Can the Foreign Company Demand Completion?

Potentially. Depending on the contract and applicable legal rules, the customer may seek performance of the developer’s outstanding obligations.

However, whether continued performance is commercially sensible should also be considered. A project that has already failed for technical or organizational reasons may not be rescued simply by forcing the parties to continue working together.

Can the Contract Be Terminated?

Potentially. Serious non-performance, prolonged delay or failure to cure contractual breaches may provide grounds for termination depending on the contract and applicable law.

Termination should be implemented carefully because an invalid or premature termination can itself generate counterclaims.

Review Contractual Cure Periods

Some agreements require written notice and a specific cure period before termination.

The customer should follow these provisions unless there is a legally justified reason why immediate termination is available.

Can Advance Payments Be Recovered?

Potentially. If the developer received advance or milestone payments but failed to provide the corresponding contractual performance, the foreign customer may seek repayment depending on the contractual and legal circumstances.

The claim should identify which payments correspond to which undelivered work.

Milestone Payments Require Separate Analysis

If the foreign company paid several installments, determine whether earlier milestones were genuinely completed and accepted.

The customer may have a stronger refund claim for amounts connected with completely undelivered stages than for stages that were properly completed and accepted.

Acceptance Clauses Can Become Critical

Many software agreements contain formal acceptance procedures requiring the customer to test the software and report defects within a specified period.

Review whether acceptance actually occurred and whether silence can have contractual consequences.

Do Not Accidentally Accept Defective Software

If the project is substantially incomplete, communications should not describe it as successfully completed merely to maintain a commercial relationship.

The company’s internal and external correspondence should accurately record outstanding defects.

Acceptance Does Not Necessarily End Every Claim

Even where software has been accepted, hidden defects, warranty obligations or specific contractual commitments may remain relevant.

The exact effect of acceptance depends on the agreement and circumstances.

Document Every Software Defect

Prepare a structured defect list identifying the relevant feature, expected behavior, actual behavior, screenshots, error messages, testing date and business impact.

Vague allegations that “the system does not work” are much harder to prove than a detailed technical defect matrix.

Preserve Screenshots and Screen Recordings

Software can change rapidly after a dispute begins. Preserve evidence of the system’s condition at relevant dates.

Screenshots, screen recordings, test results, server logs and version information can become important evidence.

Preserve Git and Repository Evidence Where Available

If the customer has authorized access to a development repository, preserve available commit history, branches, release information and other records relevant to project progress.

Do not access systems beyond the company’s legal authorization.

Source Code Can Become a Major Issue

A foreign customer may have paid for custom software but discover that the developer refuses to provide source code after termination.

Whether the customer is entitled to receive the source code depends heavily on the contract, intellectual-property provisions and nature of the development arrangement.

Review Intellectual Property Ownership

Payment for software development does not automatically answer every intellectual-property question.

The agreement should be reviewed for ownership of source code, object code, documentation, databases, interfaces, designs and other project materials.

Pre-Existing Developer Technology Should Be Separated

A developer may incorporate its pre-existing libraries, frameworks or proprietary components into the project.

The parties should distinguish those materials from software specifically created for the customer.

Open-Source Components Should Be Identified

Custom software frequently incorporates open-source software. The foreign company should determine what components were used and whether applicable licenses create restrictions or compliance obligations.

Third-Party Licenses Can Affect Project Continuity

Cloud services, APIs, commercial libraries, payment systems and other third-party technologies may be registered in the developer’s name.

Before termination, determine whether these services can be transferred or replaced.

Domain Names and Cloud Accounts Must Be Protected

The foreign company should identify who controls domains, hosting accounts, cloud infrastructure, application-store accounts, databases and administrator credentials.

Loss of access to these systems can create an emergency even before the monetary dispute is resolved.

Customer Data Should Be Secured

If the developer holds customer, employee or commercial data belonging to the foreign company, establish what information exists and where it is stored.

Data-return and deletion obligations should be reviewed separately from the software-payment dispute.

Backups Should Be Preserved

Before ending the relationship, obtain lawful backups of data and materials to which the company is entitled.

A termination dispute should not be allowed to destroy operationally critical information.

Can the Foreign Company Claim Damages?

Potentially. Depending on causation, foreseeability, contractual limitations and applicable law, damages may extend beyond repayment of the development fee.

Possible losses can include replacement-development costs, additional technical expenses and other directly provable losses caused by the breach.

Lost Profits Are More Difficult to Prove

A company may claim that delayed software prevented a product launch or caused substantial lost revenue.

Such claims generally require strong evidence connecting the developer’s breach with the alleged financial loss. Speculative projections can be difficult to establish.

Replacement Developer Costs Should Be Documented

If another developer must complete or rebuild the system, obtain detailed quotations and invoices.

This can help demonstrate the financial consequences of the original developer’s non-performance.

Contractual Penalties Should Be Reviewed

Some development contracts contain delay penalties or liquidated-damages provisions.

Their wording, triggering conditions and enforceability should be examined before asserting them.

Liability Caps Can Affect Recovery

Technology agreements frequently contain limitations of liability.

Determine whether the agreement caps damages at the contract price, excludes indirect losses or creates exceptions for particular breaches.

Can the Developer Demand Additional Payment?

Potentially, if additional work genuinely falls outside the agreed scope.

However, a developer should not automatically be entitled to additional payment merely because completing the originally promised functions became more expensive than expected.

Review Every Additional Invoice

Compare additional invoices with the original scope and approved change orders.

Disputed additional work should be separated from legitimate variations.

Foreign Currency Payments Should Be Documented

Preserve bank transfers, SWIFT records, invoices and exchange information.

Where payments were made from abroad, these documents can also help establish the exact amount paid and transaction chronology.

What If the Developer Stops Responding?

Silence should trigger a structured escalation.

Preserve communications, send the appropriate formal notice, protect access to systems and determine whether urgent legal action is necessary.

Interim Measures May Be Important

Where there is a concrete risk that source code, databases, servers, project materials or other evidence will disappear, interim judicial measures may need to be considered depending on the circumstances and legal requirements.

Urgency and evidence are critical.

Evidence Preservation Can Be More Important Than Immediate Litigation

Software systems can be modified or deleted quickly.

Before beginning a lengthy damages case, consider whether technical evidence should first be preserved through legally appropriate mechanisms.

Expert Examination May Be Necessary

Courts may require technical expertise to determine whether software was completed, whether defects are material, how much of the project was performed and what it would cost to correct the deficiencies.

A well-organized technical file can significantly improve the quality of that examination.

Preserve the Original Requirements

Do not rely exclusively on the latest version of the project specification.

Earlier requirements, amendments and change requests can show whether disputed functionality was originally promised or added later.

Emails and Messaging Records Can Be Important

Project decisions are frequently made through email or business messaging platforms.

Preserve communications concerning deadlines, functionality, defects, additional fees and admissions of delay.

Do Not Edit Historical Correspondence

Evidence should be maintained in its original form wherever possible.

Selective screenshots can be supplemented with complete conversation records and associated metadata where available.

Which Court Has Jurisdiction?

Jurisdiction depends on the parties, contract, dispute type and jurisdiction clause.

A foreign company should review the agreement before commencing proceedings in Turkey.

Check the Governing-Law Clause

The contract may contain a choice-of-law provision.

This should be examined together with Turkish mandatory rules and the procedural forum selected by the parties.

Arbitration Clauses Must Not Be Overlooked

International technology contracts frequently contain arbitration clauses.

If a valid arbitration agreement exists, filing directly before a Turkish court may create jurisdictional objections.

Review the Dispute Resolution Clause Before Sending the Final Notice

Some contracts require negotiation, mediation or another preliminary step before arbitration or litigation.

The company should follow contractual escalation mechanisms where applicable.

Turkish Mandatory Mediation May Need to Be Considered

Depending on the legal characterization of the dispute and parties involved, mandatory mediation requirements may become relevant before filing certain commercial claims before Turkish courts.

The procedural route should therefore be determined before proceedings are commenced.

Can the Foreign Company Obtain Interest?

Where a monetary debt or refund claim becomes due, interest issues may arise depending on the contractual terms, applicable law, currency and nature of the claim.

The demand should therefore identify when repayment became due.

Insolvency Risk Should Be Checked

A successful judgment has limited commercial value if the developer has no recoverable assets.

If there are signs of financial distress, the foreign company should evaluate enforcement risk and available protective measures early.

Check Whether the Developer Transferred Assets

Where there is evidence of asset dissipation after the dispute arises, additional legal remedies may need to be considered.

Allegations should be based on evidence rather than assumption.

Criminal Complaint Is Not a Substitute for a Contract Claim

Non-delivery of software after receiving payment does not automatically mean that a criminal offense has occurred.

A genuine contractual dispute should not be artificially characterized as fraud merely to pressure the developer.

When Can Fraud Concerns Arise?

The analysis may be different where evidence indicates that the developer obtained payment through intentional deception from the beginning—for example, using fabricated capabilities, false representations or another fraudulent scheme.

The facts and evidence should be evaluated separately from ordinary breach of contract.

Foreign Companies Should Avoid Public Accusations

Posting allegations of fraud online during an unresolved commercial dispute can create additional legal problems.

The company should preserve evidence and use appropriate legal procedures.

Review Tax and Invoice Documentation

Ensure that payments, invoices and any refund arrangements are documented properly.

Termination and repayment may have accounting and tax consequences that should be coordinated with financial advisers.

Consider a Negotiated Project Handover

Litigation is not always the commercially optimal outcome.

If the software is partly usable, the parties may negotiate transfer of source code, databases, documentation, credentials and unfinished work to a replacement developer together with a partial refund.

Define Handover Materials Precisely

A settlement should not merely require the developer to “transfer the project.”

List source code, repository access, databases, credentials, technical documentation, API information, deployment scripts, design files, licenses and other necessary materials.

Settlement Payments Should Be Conditional

If the customer agrees to make a final payment in exchange for project handover, consider linking payment to objectively verifiable delivery milestones.

Do Not Sign a Broad Release Too Early

A settlement may contain a waiver of future claims.

Before signing, determine whether the transferred software actually works and whether all promised materials have been received.

Immediate Action Plan for the Foreign Company

The foreign customer should immediately collect the contract and technical specifications, create a payment and milestone timeline, preserve communications and technical evidence, identify outstanding functionality, secure lawful access to systems and data, review intellectual-property ownership, send an appropriate formal notice, evaluate termination and refund rights, calculate provable losses, review jurisdiction and dispute-resolution clauses and determine whether urgent evidence-preservation or interim measures are necessary.

Frequently Asked Questions

Can a foreign company recover money paid to a Turkish software developer?

Potentially. Recovery depends on the contract, extent of performance, nature of the breach, termination rights and payments already made.

Can the company terminate the software development agreement?

Potentially, particularly where material non-performance or serious delay satisfies the contractual and legal requirements for termination.

Does paying for custom software mean the customer automatically owns the source code?

Not necessarily. Intellectual-property and source-code rights should be determined from the contract and applicable law.

What if the developer delivers only half of the project?

The customer should determine which milestones were completed, whether partial performance has value and what remedies arise for the remaining obligations.

Can the company demand completion instead of a refund?

Potentially. Whether performance or termination is preferable depends on the contractual position and commercial feasibility of continuing the project.

Can lost profits be claimed?

Potentially, but causation and amount must be established. Speculative claims concerning future business opportunities can be difficult to prove.

Can another developer finish the project?

Yes, commercially this may be necessary. Before doing so, source-code rights, access credentials, third-party licenses and intellectual-property restrictions should be reviewed.

Should the company file a criminal complaint?

Ordinary non-performance does not automatically constitute fraud. Criminal issues should be considered only where the facts support a separate criminal-law allegation.

Can urgent court protection be obtained?

Depending on the circumstances and legal requirements, interim measures or evidence-preservation mechanisms may be considered where source code, data, assets or evidence face an immediate risk.

What is the most important first step?

Preserve the contract, technical specifications, payment records, project communications and current condition of the software before terminating access or escalating the dispute. In custom-software litigation, proving exactly what was promised, what was paid and what was actually delivered is often decisive.

Client-Focused Legal Support for Software Development Disputes in Turkey

Fırat Fesih Kaya Law Office assists foreign companies, international investors and corporate customers in Turkey with software development disputes involving non-delivery, project delays, defective software, advance-payment recovery, source-code disputes, intellectual-property rights, termination, damages and commercial litigation. Lawyer Fırat Fesih Kaya provides legal assistance in reviewing software development agreements, preparing formal notices, protecting technical evidence, negotiating project handovers, pursuing refund and compensation claims and representing foreign companies in Turkish commercial disputes.

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