The Creditor's Elective Rights on the Debtor's Default: TBK 125

Research and preparation date: 10 October 2026. Subject: law of obligations, performance of contracts and damages.

The failure to perform an obligation on time does not give the creditor authority to assert every demand at the same time. In a contract imposing reciprocal obligations, once the conditions of the debtor's default are met, the creditor may, as a rule, claim specific performance and damages for delay. After setting the necessary grace period and failing to obtain performance, or after showing a situation in which no grace period is needed, the creditor may abandon performance and claim compensation for positive loss, or rescind the contract, claim the return of performances and, where the conditions are met, claim negative loss. This is the tripartite structure of TBK 125. [M1]

Choosing between these options is not merely selecting a heading for a petition. The economic outcome sought is assessed together with the debtor's ability to pay, the security at hand, the position of the counter-performance, the provability of the loss and the special provisions of the contract. In one set of facts waiting for delivery may be sensible; in another, waiting increases the loss. Rescission may release the creditor from the debt, but it does not mean that the expected contractual gain will be fully preserved.

This article explains how such a decision is built, from the occurrence of default through notice and the grace period, the binding nature of the choice of remedy and the calculation of net loss, to preparing a claim and recovery. The numerical examples are hypothetical. The contract, dates and documents of the specific dispute must be examined separately.

In which contracts does TBK 125 apply?

TBK 125 regulates the elective rights attached to the debtor's default in contracts where reciprocal performances are each other's counter-performance. In a sale, delivery of the goods and payment of the price; in a contract for work, completion and delivery of the work and the fee; in a lease, provision of use and payment of rent are typical examples of this reciprocity. That a person is both debtor and creditor is not sufficient on its own; the place of the breached obligation in the exchange of performances under the contract must be examined.

The provision is not a general power of avoidance that resolves every problem in a contract. Invalidity of a contract from the outset, defective performance, subsequent impossibility, excessive difficulty of performance and default of the creditor are subject to different conditions. Where a special contract type has its own rule, its scope of application is determined first. The general provisions apply to the extent that they do not conflict with the special provision and fill the area it does not regulate.

The reference in the source diagram to Article 106 of the former Code of Obligations shows the historical regulation of elective rights. When reading an old decision, the law it applied must be distinguished from TBK 125 as discussed today. The date of the contract and of the breach may also be significant for transitional provisions.

TBK 125 is not confined to obligations other than money. Non-payment of a money debt under a reciprocal contract may also give rise to elective rights, with the relevant special provisions taken into account. However, the interest and excessive-loss consequences of delay in a money debt are separately subject to TBK 120–122 and the relevant interest legislation. It would not be correct to place, without qualification, non-payment of a sale price and late payment of an independent money claim into the same tripartite scheme. [M1, M2]

How are delay, default, defect and impossibility distinguished?

Delay is the fact that an obligation was not performed on time. Default is the legal position created by the conditions the law requires. Not every delay automatically gives rise to a right to rescind. First it is determined whether the obligation has become enforceable, whether performance is possible, whether a notice is required and whether the debtor is justified in refusing performance.

In defective performance, a performance has been tendered but the qualities agreed in the contract or required by the legal system are missing. A machine that is never delivered and a machine that is delivered but does not meet the production capacity do not call for the same legal analysis. In incomplete work, the scope of delivery, the importance of the part not completed and the nature of the contract are decisive. Special rules on notice of defects and limitation must not be allowed to disappear under the heading of default.

In impossibility, performance is no longer possible. Subsequent impossibility for which the debtor cannot be held responsible is assessed under TBK 136; partial impossibility under TBK 137. In impossibility for which the debtor is responsible, liability for damages is examined separately. When a temporary obstacle becomes permanent impossibility is determined by the purpose of the contract, the duration of the obstacle and the meaning of waiting for the parties. Failing to find money does not, by itself, make a money debt impossible to perform.

If the creditor, without good cause, refuses a duly tendered performance or fails to take the necessary preparatory acts, creditor's default may arise under TBK 106 et seq. A creditor who has not opened the workplace for delivery, not approved the project or not given the debtor the necessary access may not be able simply to rely on the other party's delay. The actual workflow and the duties of cooperation under the contract are therefore examined together. [M1]

What conditions are required for the debtor to be in default?

Enforceability and the possibility of performance

Enforceability refers to the time at which the creditor is entitled to demand performance. The contractual delivery date, the payment schedule, a condition to be fulfilled, approval of a progress payment or the performance of a prior obligation may affect this time. Where the contract's work schedule and the main agreement set different dates, it is examined which text prevails and whether the time was later extended.

A letter sent before the obligation has become enforceable does not, as a rule, start the consequences of default for an obligation that is not yet enforceable. A statement by the debtor that it will not perform in future does not mean that, in every contract, the maturity is automatically brought forward. Special provisions such as Article 473 TBK on contracts for work are assessed in relation to the possibility of withdrawing before the delivery date and of advance breach.

The creditor's own performance and the defence of non-performance

Under Article 97 TBK, in a contract imposing reciprocal obligations, the party demanding performance must have performed its own obligation or offered to perform it, except where the nature of the contract or its provisions mean that it has no prior obligation to perform first. A buyer that is not ready to pay the price due simultaneously with delivery cannot treat the seller's non-delivery as an unjustified delay on that ground alone.

This issue cannot be closed by a single sentence in the contract. Bank payment receipts, notice of readiness, delivery appointments, reciprocal correspondence and the parties' earlier practice are important. Where the debtor relies on the defence of non-performance, it must explain which counter-performance has not been rendered. The creditor must also show, by documents, why the order of performance is different or that it duly offered its own performance.

If the counterparty becomes insolvent, security may be requested

Article 98 TBK provides a protection specific to reciprocal contracts where one party's inability to perform endangers the other party's entitlement. In particular, where this arises from facts such as bankruptcy or an unsatisfied attachment, the party whose entitlement is endangered may refrain from performing its own obligation until the counter-performance is secured. If the security requested is not provided within a reasonable period, a right to rescind may also arise. The security demand and its period under this provision do not have the same legal function as the grace period for late performance under TBK 123.

For example, a buyer who must pay the second instalment before delivery should weigh the risk of payment and delivery together, in the face of concrete records of the seller's inability to perform. A mere rumour or every cash shortage cannot be considered sufficient. The scope of any existing security, whether performance is genuinely at risk and the adequacy of the proposed new security are examined. If the debtor argues that it has provided adequate security, the document and its enforceability must be discussed. Stopping payment before the conditions are met may cause the party now in the creditor's position to fall into default itself. [M1]

Fault and default are not the same thing

Fault on the debtor's part is not a general precondition for default. Fault is important particularly for the compensation of losses and liability for unforeseen events. Accordingly, the entitlement to specific performance and the recovery of loss caused by delay are assessed separately. Even if the debtor proves that it was without fault, it does not follow that all its obligations have been extinguished. [M1]

For details, you may consult the section on yacht construction contracts.

When is a notice required, and how is it proved?

Under the general rule of Article 117 TBK, the debtor of an enforceable obligation falls into default upon the creditor's notice. A notice is a declaration that sufficiently identifies the obligation to be performed and clearly states the demand for performance. A vague expression such as "do what is necessary" creates a dispute if it is unclear which delivery or payment is demanded. The legal consequence depends on the content of the document, not its heading.

Where the day of performance has been fixed jointly by the parties, or fixed by notice duly given under a reserved right in the contract, the passing of that day may be sufficient for default. Article 117(2) TBK also provides separate starting points for tort and unjust enrichment; the exception to notice for good-faith unjust enrichment is preserved. These situations cannot be extended to mean that a notice is unnecessary for every payment obligation under a contract.

The fact that a notice is not required is not the same as the fact that a grace period is not required. Where a contract fixes the delivery day clearly, default may begin without a notice; however, a grace period under TBK 123 may still be required before withdrawing from performance or rescinding. Confusing these two stages gives rise to the defence that the choice of remedy was made too early.

The date on which a notice was drafted or posted is not alone sufficient. It is important that the declaration reached the debtor, the identity of the addressee, the authority of the representative and the contractual notice address. A notarial document, a delivery record, registered electronic mail (KEP) delivery records and the enclosures of the notice should be kept together. A screenshot does not in every case replace the original electronic records and the delivery information.

Between merchants, TTK 18(3) is also taken into account for notices and warnings that place the other party in default, terminate the contract or rescind it. Notarial notices, registered letters, telegrams and the secure electronically signed registered electronic mail (KEP) procedure should not be ignored. Although there are debates on the form and evidential effect of the provision, using the routes provided by law in order to secure transactions is necessary, together with documenting the content, the enclosures and the receipt. No absolute approach can be established that every WhatsApp message is automatically sufficient or in every case worthless. [M1, M3]

How long should a grace period be, and when is it not required?

An appropriate period is not the same number of days in every file

Article 123 TBK provides that the defaulting debtor is to be given an appropriate period for performance, or that this period may be requested from the judge. The grace period serves to allow the debtor to perform the obligation that is already enforceable for a final time. There is no general rule such as "seven days in every contract" or "fifteen days for every notice".

Appropriateness is assessed by the type of performance, the level of work already done, materials that must be sourced, transport and installation conditions, the parties' earlier conduct and the creditor's legitimate need. A delivery whose preparation has long been completed and a system missing technical tests may not require the same period. Neither is it intended to give the debtor a new contract period from scratch, nor to allow the creditor to impose a period that could not in reality be met.

In a notice, the performance, the start of the period, the last day and the place of performance must be clear. Although the consequences of an inappropriately short period are discussed in doctrine and practice, a creditor should not treat the expiry of a disputed period as conferring an absolute right to withdraw. It is important to be able to explain why the period is appropriate, using technical and factual data. An academic study on grace periods also shows that a period should be assessed not only by calendar calculation but by its function of giving a final opportunity to perform. [A1]

Combining a notice of performance with notice of the grace period in the same document is accepted; what matters is that the conditions and function of both acts are clear. Because there are differing views in doctrine on the effect of fixing a grace period before default, this possibility should not be presented as an unconditional rule of validity. The enforceability of the debt, the demand for performance and the last opportunity given must be understood. Every payment or delivery date in a notice is not automatically a grace period within the meaning of TBK 123. The starting point of the period and the starting point of default are determined separately from the content of the text. Using the same document does not automatically complete, at the end of the grace period, the statement of choice of remedy required in every case. [M1, A4]

The three exceptions in TBK 124

A grace period may not be required where the debtor's situation or conduct shows that giving a period will be ineffective; where, because of the delay, performance has become useless to the creditor; or where it is clear from the contract that performance will no longer be accepted if not made on time. A party relying on these exceptions cannot simply repeat the wording of the statute. A definitive refusal of performance, the complete cessation of production, the contract's purpose linked to time, or a clear fixed-date term must be shown by the relevant evidence.

The distinction between a specified date and a fixed date is important here. Writing a date does not always show that late performance will not be accepted in any circumstances. The purpose and wording of the contract are interpreted together. A creditor's later decision to give up, or a change in its economic preference, is also not the same as performance having become useless because of default.

Is a grace period always required even for specific performance?

The principal function of the grace period is to prepare the exercise of the options of abandoning performance and rescinding. Demanding an enforceable performance, and claiming damages for delay where the conditions of default are met, does not in every case depend on first granting a period under TBK 123. Where the creditor wishes only to continue to demand performance, it should say so expressly and should not use language that might be understood, unintentionally, as rescission. [M1]

Comparison of elective rights

The table is a general framework. Special contract provisions, divisibility, the validity of a penalty clause and the scope of security are examined separately. The second option is not the same legal transaction as rescission; in the third option, the return of an advance is not in itself treated as compensation for loss.

What does specific performance and damages for delay provide?

Specific performance is the performance of the obligation undertaken in accordance with the contract. Where the creditor still wants the machine, the completed work or the agreed delivery, continuation of the contractual relationship is the essence. The corresponding counter-obligations, such as paying the price, accepting delivery and providing the necessary cooperation, also continue accordingly.

Damages for delay are not the value of the performance itself. They aim to cover the net loss that would not have arisen had performance occurred on time. Where a replacement machine has to be hired because of late delivery, the reasonable cost of that hire, the proven cost of idle capacity or net loss of profit may arise. The same production shortfall cannot be counted twice, both as the cost of the hired machine and as the profit lost on the production that machine would have produced.

The creditor sets out its loss, the connection with the delay and the elements of calculation. Under Article 118 TBK, the debtor may be relieved from this compensation by proving that it was not at fault in falling into default. The defence of absence of fault should not consist of an abstract statement that "there was a supply problem". What the obstacle was, when it arose, its foreseeability and what measures were taken are examined.

It is as important that performance is still obtainable as that it is still useful. If the debtor has entirely stopped production and lost the necessary organisation, an order for specific performance alone may not achieve the economic result. Conversely, where a non-replaceable work or a bespoke production is involved, continuing with performance may be the most meaningful choice for the creditor. Having the work done by a third party under TBK 113, and the imposition of the necessary permits and expenses, are separately considered. [M1]

How are abandonment of performance and positive loss calculated?

Positive loss is the expected contractual benefit

Positive loss is the difference between the position of the creditor's assets had the contract been performed as agreed and the position in which it finds itself because of the breach. The aim is to bring the creditor to the economic position that the contract would have secured. The total contract price, gross turnover or every expectation about the future is not compensation in itself.

Cover-transaction price differences, reasonable additional expenses incurred to obtain the performance conforming to the contract and proven net loss of profit may be taken into account in this calculation. For each item, the questions "would this expense still have been incurred had performance been on time?" and "would this income really have been earned?" are asked. Costs saved because the work was not done, such as materials, labour, transport and commission, are taken into account.

Where a loss of net profit is claimed, prior period data alone does not automatically produce a result. Firm orders, production capacity, stock, market conditions, alternative business opportunities and the expenses necessary for the sale are assessed together. The benefit obtained by using the same capacity for other work may affect the calculation. Founding a claim on a hypothetical maximum turnover creates a serious gap in the expert examination.

Counter-performance and advances cannot be forgotten in the calculation

Abandoning performance does not mean ignoring the economic effect of the creditor's own counter-performance. In an exchange approach, compensation for the benefit of performance in return for the creditor performing its counter-obligation arises; in a difference approach, deducting the value of the counter-performance comes into play. The method suited to the type of contract and the structure of the concrete claim is chosen. The advantages of two methods cannot be added together in the same file.

An advance paid, the unpaid balance, any partial performance held, and the economic value remaining with the debtor must be shown in separate lines. If the advance is written both within the difference calculation and again as an independent item of damages, double recovery arises. The calculation report must clearly show which item is compensation and which is the settlement of counter-performance.

How is double counting of delay losses avoided?

Once abandonment of performance is chosen, the separate option of specific performance and damages for delay is no longer pursued. However, in determining the scope of the loss from non-performance, it is examined to what extent the economic losses before and after abandonment fall within the same benefit of performance. To disregard a loss already incurred, or to add up the same loss under two headings, are both errors.

For this reason, the loss calculation must be divided by period and cause. "Temporary hire made while delivery was awaited", "the price difference of a replacement contract" and "production loss proven up to the new delivery date" are examined separately; where periods or interests overlap, an offset is made. The legal characterisation belongs to the judge, and the technical calculation to the expert. The expert should not be asked to decide which elective right has been exercised. [M1, M4]

The difference between rescission, restitution and negative loss

Rescission starts the liquidation of the performance relationship

Under Article 125(3) TBK, on rescission the parties are released from the reciprocal performance obligations they have not yet fulfilled, and may recover the performances they have already given. The return of a price paid in advance, the return of goods delivered and the account of benefits obtained are the subjects of this liquidation. The scope of the duty of restitution is specified by the nature of the performance and whether return is possible.

On the legal nature of rescission, there are doctrinal differences between the classical view of retroactive termination and the view that rescission turns the contract into a liquidation relationship. This difference can have consequences for the legal basis of a restitution claim, for limitation and for security. The mere statement in the operative text that "the contract is as if never made" is not enough to explain all the consequences.

For the right of rescission, the debtor's fault is not a general condition; however, a defence of absence of fault is important in relation to recovery of negative loss. Accepting the defence of absence of fault therefore does not mean that the sum received on a valid rescission will in no circumstances be returned. A claim for restitution and a claim for loss must be founded on their own separate legal bases.

Negative loss covers the loss of trust

Negative loss is the loss the creditor suffers because it relied on the contract being valid. Expenses wasted in preparing for the contract, preparatory costs that cannot be used elsewhere, and a proven alternative contract opportunity that was missed are examples. Every expense receipt is not sufficient in itself; the connection of the expense with the contract, whether it was wasted and what residual benefit remains are examined.

A missed opportunity is not the same as the profit promised by the rescinded contract under another name. A genuinely existing alternative offer, its acceptable terms, the time of performance and the creditor's ability to take advantage of that opportunity must be shown. A later market rise does not by itself prove that a specific opportunity existed in the past.

The return of the advance and negative loss may be claimed together, but the advance itself cannot be added again as loss. The total of the profit expected from full performance of the rescinded contract and the position that would have arisen had the same contract never been relied on cannot give the creditor the gains of two different hypothetical worlds at once. [M1, K1]

How does the Court of Cassation review the difference between two prices?

The decision of the Civil General Assembly of the Court of Cassation (Yargıtay Hukuk Genel Kurulu) dated 6 December 2022, E. 2021/563, K. 2022/1659, is instructive on this point. After the buyer at a property auction failed to pay the price, the price in the second auction fell considerably. However, in the second auction the payment period had been shortened and a high penalty condition had been introduced. The Assembly did not consider it sufficient mechanically to deduct the two sale prices.

The important detail of the decision is this: the fact that the conditions had changed was not, in the majority's view, sufficient to dismiss the claim outright. It was indicated that it must be established, through expert examination, what price would have been obtainable had the second auction been held under the same conditions as the first, and what the cause of the real loss was. The decision reached a reversal on a different ground. A loss arising from changed circumstances cannot be automatically attributed to the debtor's conduct.

In the dissenting opinion, a different legal solution was defended, relying on the special provisions of Law No. 2886, on whether a written contract had been concluded and on the sanction of a provisional guarantee. The decision therefore cannot be reduced to the proposition "in every sale, the first price minus the second price is the negative loss". The general lesson in practice is to equalise the conditions of the transactions compared and to prove separately the connection between the loss and the breach. [K1]

Numerical comparison of the three options on the same facts

Suppose a person has agreed with a contractor for a special technical system to be built and installed in a property for its own use. In the example it is assumed that the general conditions of TBK 123–125 were met, that the special provisions do not change the result, and that default, a proper grace period and timely choice of remedy have been proved. This is not an interest calculation or a prediction of the outcome of any actual claim.

If specific performance is chosen: The creditor takes the system from the contractor under the contract; the balance of TRY 800,000 continues to be paid on the contractual terms. The proven net delay loss is TRY 45,000. Because no equivalent substitute work of TRY 1,180,000 has been carried out, a price difference is not separately claimed. The TRY 15,000 project expense is not added as a pure delay loss, since it would also have been incurred with timely performance.

If abandonment of performance and positive loss is chosen: The price difference for securing the equivalent work is TRY 180,000. With the net loss of TRY 45,000 that does not overlap with it and arises from the same breach, the loss of the benefit of performance is TRY 225,000. In the example where the advance of TRY 200,000 paid is taken into account in the difference method, the net monetary calculation is 1,180,000 + 45,000 − 800,000 = TRY 425,000. Of this amount, TRY 200,000 is the effect of the advance on the settlement; it is not a second negative loss. It would be wrong to pay the TRY 800,000 balance to the debtor separately and also use the same difference calculation. The original project expense has not been added again in this calculation, because it would also have existed with timely performance.

If rescission is chosen: First the restitution of the advance of TRY 200,000 is assessed. For negative loss, the comparison is made not with the first contractor's price of TRY 1,000,000 but with the genuinely lost alternative of TRY 1,060,000. The price difference with a reasonable substitute is TRY 120,000. Adding the wasted project expense of TRY 15,000, and the proven net delay loss of TRY 45,000, which would not have arisen had the alternative been performed on time, the negative loss is TRY 180,000. Together with restitution, a total claim of TRY 380,000 arises. If the alternative offer or the causal connection of these expenses cannot be proved, the result changes.

The example does not calculate tax, interest, penalty clauses, collection of security or litigation costs. If any of these exists, the netting must be redone. The purpose of the figures in the table is not to make the highest-looking amount the one selected; it is to show that each right sets up a different comparison.

When and how must the choice of right be notified?

Article 125(2) TBK requires that abandonment of specific performance and damages for delay be notified without delay. There is no fixed period of three, seven or thirty days for "without delay" that applies to every event. The expiry of the grace period, the emergence of a situation in which no grace period is needed, and the reasonable time needed to prepare and deliver the notice are assessed together with the concrete circumstances. The fact that the general limitation period for an action is long does not mean that this notice can be held back for years.

The notice must be clear. Does the creditor insist on specific performance, claim damages in lieu of performance, or rescind the contract? A statement such as "I am terminating the contract, and I claim delivery of the goods and all my losses" may contain wills that do not agree with each other. Since the whole content of a declaration is interpreted regardless of the term used in the notice, the economic and legal aim must be made unambiguous at the preparation stage.

The relationship and timing between a declaration of abandonment of performance and a later choice of damages or rescission are the subject of detailed debate in doctrine. For the sake of certainty in practice, rather than sending an ambiguous declaration of abandonment and leaving the outcome to later, where the file's circumstances allow, the chosen consequence should be stated clearly. A general reservation of all rights does not keep every option open indefinitely.

It should not be assumed that a declaration of rescission or of abandonment of performance that has validly reached the other party may be withdrawn unilaterally. A new agreement between the parties, a reason affecting the validity of the declaration, or a special legal situation are assessed separately. On the other hand, the creditor's first waiting for performance does not mean that every possibility arising from a new act of default by the debtor or after a new appropriate period is removed for ever. It is not correct to conclude "the right has been used once and nothing more can be done" without examining the concrete sequence of notices. [M1, A1]

How are fault, causation and the duty to mitigate loss distinguished?

The existence of loss, its amount and its appropriate causal link with the breach of contract are, as a rule, shown by the party claiming it. Proof by the debtor of its absence of fault is a separate matter, regulated by Article 112 TBK and by the special damages provisions relating to default. The presumption of fault does not relieve the creditor of the duty to explain and prove its loss.

By the reference in Article 114 TBK, the relevant tort provisions also apply in determining loss and compensation. Where the amount of the loss cannot be proved fully, the assessment under Article 50 TBK may arise; however, this does not mean that an estimated sum is accepted without any data being submitted. Available data such as orders, capacity, cost and market records should be collected.

The creditor's contribution to the occurrence or increase of the loss may affect compensation under Article 52 TBK. Taking no measure for months when a reasonable substitute was available, passing on to the debtor the cost of changed tender conditions, or presenting a luxury or different product as an equivalent substitute, are open to counter-argument. Mitigation of loss does not, however, mean that the creditor must bear every risk or accept an arrangement to its own loss.

The debtor may argue that the creditor changed the design, delayed the necessary payment or approval, refused to accept delivery, that the loss arose from independent market movements, or that the same loss was covered by insurance or a third party. Each of these defences must be answered by reference to dates and documents. A loss calculation prepared without establishing the chronology of the file may be legally wrong even if its technical figures are accurate.

Article 119 TBK also regulates the liability of the defaulting debtor for loss arising from an unforeseen event. The debtor may be relieved of liability by proving that it was without fault in falling into default, or that the unforeseen event would have damaged the subject of performance even if performance had been on time. This provision should not be read as "unconditional liability for every event occurring after default". [M1]

A subcontractor's or supplier's delay does not automatically remove liability

The debtor cannot rely on the fact that it entrusted performance to a third party as a ground for non-liability on its own. Within the framework of Article 116 TBK, the conduct of an auxiliary person in connection with performance is assessed by reference to the work undertaken and its relationship to the loss. It is also incorrect to treat a supplier automatically as an auxiliary performer in every case; the organisation under the contract, the nature of the goods and the supplier's role in the performance of the obligation must be examined. The creditor should place in the file the orders, dispatch notes, sub-contractor appointment and correspondence about delay, while the debtor should show the concrete basis of the external obstacle it alleges and of the measures it took.

The presence in a contract of a clause stating that "we are not liable for all delays in the supply chain" does not end the examination. The invalidity of a prior agreement excluding liability for gross fault under Article 115 TBK, the special limits on specialist services performed under permission and the separate regime under Article 116 TBK for auxiliary persons are all relevant. A defence of absence of fault or force majeure cannot be established until the applicability of the clause has been determined. [M1]

Default interest and excessive loss in money debts

Interest claims and proof of loss are separate questions

In a money debt, default interest does not depend on the creditor separately proving its concrete loss once the conditions are met. The debtor's statement that it was without fault does not on its own extinguish the obligation to pay interest. However, the date of default and the applicable rate must be correctly determined. The interest provision in the contract, the commercial or consumer nature of the transaction, the currency and any special regulation are examined.

The limits in Article 120 TBK are assessed together with freedom of interest in commercial matters and special statutory provisions. It is not correct to apply the same contractual ceiling or the same interest rate to all debts. The special starting rule that Article 121 TBK lays down for interest, income and gift obligations must also not be overlooked. The prohibition on running default interest on default interest, and the specific cases of compound interest permitted by law, are kept separate. [M1, M2, M3]

The 2026 interest change affects older fixed-rate tables

Article 1 of Law No. 3095 was amended by Article 10 of Law No. 7589. Under the new provision, where no rate is fixed in the contract, the statutory interest is linked to eighty percent of the discount rate applied by the Central Bank of the Republic of Türkiye (TCMB) to short-term credit operations on 31 December of the previous year. Where the rate on 30 June differs from the rate of 31 December by five percentage points or more, a separate calculation is provided for the second half of the year. The amendment entered into force on 31 July 2026. [M2, M5]

For this reason, it is not reliable to apply the single percentage in an old internet table to the whole period of delay. Commercial default interest, foreign-currency interest, the valid contract term and the transitions between periods must be checked separately. No single rate has been given here that would suggest it applies to every debt. In the calculation schedule, principal, start and end dates, partial payments, number of days, the applicable rate and the source of the rate should be shown in separate columns.

Excessive loss and the Caner Şafak decision

Article 122 TBK regulates loss that default interest does not cover. Where financing costs, loss of value or other economic consequences are claimed, the part covered by interest is separated. The same loss cannot be recovered twice, once as interest and once as excessive loss. The debtor may be relieved of liability for excessive loss by proving that it was without fault; the discussion of loss and causation is conducted separately.

The decision of the Constitutional Court in Caner Şafak [Plenary], App. No. 2024/41763, 8 July 2025 is important for the loss in value of claims between private persons in the face of inflation and for effective redress. The Court found a violation of the right to an effective individual application linked to the right of property; the majority identified a structural problem and applied the pilot-decision procedure. The dissenting opinions argued that the problem arises not from a lack of a legal remedy but from the interpretation of the existing regulation, and that it can be remedied by a retrial. [K2]

The decision cannot be presented as meaning that the inflation rate announced in every claim is converted directly and unconditionally into compensation. The period of the claim, the interest collected, the method of loss claimed and subsequent legislative changes must be considered together. In particular, carrying the 2025 discussion into the present without taking account of the interest change of 2026 would be incomplete. Academic scrutiny of the methods of proving excessive loss, in both abstract and concrete terms, also reveals the importance of this distinction. [A2]

A foreign-currency claim and the partial payment account must be set up separately

Where a debt has been validly fixed in a foreign currency, TBK 99 applies, and it is examined whether the contract contains a clause for payment in the same currency. Where no such clause exists and the debt has not been paid when due, the creditor may, under the conditions of the law, demand either payment of the foreign currency itself or the Turkish lira equivalent at the rate on the due date or the date of actual payment. The currency chosen and the exchange-rate date chosen must be stated expressly, together with the type of interest. The advantages of different exchange-rate and interest methods cannot be combined arbitrarily in the same calculation. Where special exchange-control restrictions or consumer provisions apply, the validity of the contract clause is examined separately.

Nor can it be assumed that in a partial payment the amount received is always deducted directly from the principal. Under Article 100 TBK, the position of interest and expenses is relevant; where there are several debts, under Articles 101–102 TBK the debtor's declaration of payment, the receipt and the statutory order of set-off are important. The explanation on the bank receipt should be compared with the creditor's calculation schedule, and each payment should be recorded showing which debt, which item and which date it was applied to. This examination may change the remaining principal and the subsequent interest calculation. The same collection must also not be deducted twice, from both the principal and the damages. [M1, M2]

How do penalty clauses, reservations and security change the outcome?

The type of penalty clause must be determined

The phrase "delay penalty" in a contract is not in itself an adequate legal characterisation. Under Article 179 TBK, penalty clauses may be claimed in lieu of performance or together with it, and they have different consequences. In particular, for a penalty imposed for failure to perform at a particular time or place, it is significant whether the creditor has clearly waived its right or accepted the performance without reservation. The type and scope of the right to be reserved must be clear when signing a delivery record.

A claim for the penalty and a claim for actual loss are not automatically aggregated. Under Article 180 TBK, the conditions for loss exceeding the penalty amount and the proof of fault are separately examined. Reduction of an excessive penalty is considered together with Article 22 of the Turkish Commercial Code (TTK) concerning a merchant debtor and with mandatory limits. It cannot be said that every penalty entry will be collected in full, or that every penalty will necessarily be reduced.

Article 131 TBK provides the framework for the position of related rights when the principal obligation ends, and for preservation of accrued interest and of the penalty clause. The same reservation regime does not apply to every loss item. However, general wording used during payment and delivery, such as "I have no claim left", may create serious problems of interpretation as regards rights later sought to be claimed. [M1, M3]

Suretyship, pledge and bank guarantee are not the same

The generalisation often found in source diagrams, that "all security survives under the first two options and everything falls away on rescission", is not sufficient. First it must be asked which debt is secured and by what instrument. The validity conditions, maximum amount, scope and duration of a suretyship; the claim secured by a pledge or mortgage; and the text of an independent guarantee in the nature of a bank letter of guarantee each require different assessments.

Article 589 TBK regulates the scope of the surety's liability, and in particular the limitation relating to loss arising from a penalty clause and from invalidity of the contract. For this reason, it cannot be assumed that every restitution or negative loss item claimed after rescission may be directed at the surety of the principal debt in the same way. Where the claim passes to damages in lieu of performance, the surety's maximum amount and scope are not exceeded.

A mortgage deed may expressly secure future or conditional claims and restitution obligations. In another file, a security may be limited to a particular principal debt. In the case of a letter of guarantee, the conditions and the time for calling for payment are especially important. Before choosing a remedy, whether the security might be lost, or which claim it will meet, must be examined from the text. The theoretical debate on the nature of rescission does not replace this concrete examination of the document. [M1]

Situations in which the general picture changes under special contracts

Default of seller and buyer in a contract of sale

For the seller's obligation to deliver, Articles 212–213 TBK are important. In a commercial sale where a fixed period has been set for transfer of possession, there is a special recognised rule that, upon the seller's default, the buyer may abandon the demand for transfer and claim damages for non-performance. If the buyer will continue to demand delivery, it must say so immediately on expiry of the period. The consequence of silence in the general narrative of TBK 125 cannot be applied to this special case without modification.

Under Article 213 TBK, where the seller cannot prove that it was without fault, it bears liability for loss and the conditions for calculating loss by reference to a replacement purchase or to the market price in a commercial sale are regulated. The kind of goods, their equivalence, the timing of the replacement transaction and its good-faith nature are important. For goods having a market price, the abstract method of calculation cannot be extended to every contract for work or services without examining the conditions of the statute.

Where the buyer fails to pay the price, Articles 235–236 TBK may apply. There are distinctions such as: in sales where the goods are to be transferred only once the price is paid or at the moment of payment, the rescission and its immediate notice; where the goods have been delivered before the price, an express reservation of the right to rescind. The statement "the price was not paid, so the contract ended on its own" does not remove these distinctions. [M1]

Delay before delivery under a contract for work

Article 473 TBK provides the possibility of rescission before the day of delivery where the contractor does not start the work on time, performs it in breach of contract so that it is delayed, or where it is clearly apparent that the work cannot be completed on time for reasons not attributable to the principal. The technical stage of construction or manufacture, the remaining period and the amount of work remaining are assessed together. Falling behind on the schedule alone does not show in every case that the conditions have been met.

Where it is apparent that the work will not be performed as required because of its progress, the mechanism of a reasonable period and of expenses under Article 473(2) TBK is separately assessed. Termination of the contract by the principal before delivery is not in every case rescission based on the contractor's default. The financial consequence differs from the termination under Article 484 TBK, which is by settling the part done against the contractor's full loss. A wrong legal basis may leave a principal who believes it is a creditor facing a significant burden of damages.

Written notice and minimum period in rent debts

If the rent or ancillary charges due after the leased property has been delivered are not paid, the special provision of Article 315 TBK must be observed. The written notice must state that, if performance is not made within the period granted, the contract will be terminated. The period is at least ten days; for residential and roofed workplace leases it is at least thirty days. The start is the day following the date of the written notice.

These statutory minimum periods cannot be shortened by the general "appropriate period" wording of Article 123 TBK. The recovery of the rent claim and the conditions of eviction are also not the same. The dispute resolution by mediation as a condition of litigation and the exception for eviction by enforcement without judgment are assessed separately. A standard eviction notice cannot safely be prepared without knowing the nature of the lease relationship and the route to be used. [M1, M6]

Termination rather than rescission in continuing contracts

In continuing contracts where performance has begun, Article 126 TBK regulates, alongside specific performance and damages for delay, termination and compensation for loss suffered by reason of the contract ending before its term. It is often impossible to return a service that has been used in the past as if it had never been received. For that reason, termination with effect for the future and the account of the past period are separated.

The fact that a piece of work takes months does not in itself make the contract a continuing one. The long preparation of a construction project and the economic structure of performance in the contract are not the same thing. Without examining the legal nature of the contract and its special provisions, one should not choose between Articles 125 and 126 TBK. [M1]

For details, you may consult the section on yacht sale contracts.

Third-party rights in construction in exchange for land share

In construction in exchange for a share of the land, the contractor's delay is examined together with the degree of completion, the delivery conditions, transfers of title, sales to third parties and mortgages. The level of construction and the principle of good faith may require separate assessment as to the effect of termination. The fact that a notice of rescission has been sent does not mean that all land registry entries automatically return to their earlier state.

For details, you may consult the article on termination of a land-share construction contract and return of title.

The decision of the Grand General Assembly of the Court of Cassation on the Unification of Case Law (Yargıtay İçtihatları Birleştirme Büyük Genel Kurulu) dated 16 May 2025, E. 2024/1, K. 2025/2 is particularly important. Where, after the land subject to a land-share construction contract has been transferred in the land registry to the contractor, the contractor has conferred ownership or a mortgage on third parties, and the contract is subsequently found invalid or ends with retrospective effect, the claim of a third party who acquired the real right in good faith by relying on the land registry is to be heard. The decision was given unanimously. [K3]

Accordingly, the approach that "every transfer to the contractor is an advance, and when the contract is set aside a third party's title is always cancelled" cannot replace the current decision. Good faith at the time of acquisition, the land registry record and annotations, the relationship between the parties and the due diligence in the concrete case are assessed. If bad faith is established, the return of the property to the landowner may be possible; good-faith acquisition may be protected.

This decision requires that the position of a person who has obtained only a personal right against the contractor be distinguished from that of a third party who has acquired a real right in the land registry. Not every promise of sale or extra-contractual payment is the same as acquiring ownership in reliance on the land registry. The landowner's contractual damages claim against the contractor, the claim for a real right against the third party, and the status of the mortgage must each be established separately. An academic study examining the consequences of the decision also treats the debate on good faith and reliance on the land registry within this framework. [A3]

Partial performance, late delivery and changed conditions

For partial performance, it is examined which part has been performed, whether the missing part is economically separable, and whether the creditor's interest has been realised without the remaining part. It is not correct to treat leaving the whole contract because of a small shortfall as equivalent to a shortfall that defeats the essential purpose of the contract. The scope of rescission, the return of partial performance and the taking into account of any remaining benefit are determined separately.

Acceptance of late performance does not automatically amount to waiving all rights. Nevertheless, it may have particular consequences for penalty clauses, interest, release and reservation of rights. Defects, the date of delivery, test results and the rights reserved must be clearly recorded in the delivery record. Technical acceptance and financial settlement should, as far as possible, be recorded separately.

Excessive difficulty of performance under Article 138 TBK is not a general excuse that removes default. The exceptional circumstance that was neither foreseen nor reasonably foreseeable when the contract was concluded, the absence of fault on the debtor's part, a severe change in the balance of performances and the condition of performance are considered together. A request for adaptation does not give the debtor, in every case, the right to stop performance on its own. A rise in exchange rates or costs does not by itself show that all the conditions have been met.

Where there is a force majeure clause, its scope, the notice obligation, the effect of the obstacle and the risks assumed in the contract are examined. The same event may make one performance impossible while only making another more expensive. Setting up default, impossibility and adaptation consequences separately is necessary in order to respond accurately to the other party's defence. [M1]

How is the file prepared before a notice and a lawsuit?

A well-prepared file is not a heap of documents. Each document should answer a specific legal question. Changes since the contract was signed, payment and delivery stages, notices, time limits, interim solutions and heads of loss should be brought together in a single chronology.

For electronic evidence, where possible the entire chain of conversation, the file attachments and the original records should be preserved, rather than a few selected message images. Whether a document came from whom, whether it has been altered and in what context it was produced may be disputed. Evidence must not be obtained unlawfully; third parties' data should not be placed unnecessarily in the file or in a published article.

Where evidence may be lost or will become harder to obtain, a preservation of evidence (delil tespiti) under Article 400 HMK and following should be considered. Before a new contractor enters the site, the existing level of work may need to be fixed; before the machine is repaired, the fault; before the product is disposed of, its condition. A preservation of evidence does not replace a notice or a choice-of-remedy declaration. Questions put to a technical examination should also aim to establish measurable facts, not to secure acceptance in advance of a legal conclusion. [M4]

How should the claim and the type of action be framed?

The claim must be directed by the correct creditor against the correct debtor

Before a default claim is asserted, the parties to the contract and the representative capacity of the person who carried out the transaction must be determined. Under TBK 40, the consequences of a transaction made by an authorised representative in the name and on account of another belong directly to the represented person. For this reason, it may be wrong to treat only the person who signed, the employee who conducted negotiations or the company partner as the personal debtor under the contract. Where a personal undertaking, suretyship, unauthorised representation or a different ground of liability is relied on, its conditions must be shown separately.

On the creditor's side, it should not be assumed that the person who paid and the person who holds the right under the contract are in every case the same. The contract, the payment instruction, the receipt, the documents of representation and any assignment of the claim are read together. The existence of an assignment under Articles 183–184 TBK does not, on its own, mean that the whole contract has passed or that every right of renewal has passed to the same extent; the subject of the assignment and the authority to exercise the chosen right are examined separately. Where there are several persons, the legal basis for directing the claim to each of them must be explained. A notice sent to the wrong party cannot be treated as effective against the real debtor merely because the companies are in the same group or the parties are related. [M1]

Claims that can be made together and claims that are incompatible

Specific performance and damages for delay, where their conditions exist, are compatible. Restitution and negative loss on a valid rescission may also be considered together. By contrast, to demand cumulatively both the performance of the obligation in specie and the full substitute value of the same performance on the basis that it has been definitively abandoned; or to combine unconditionally the full performance gain of the same contract with rescission, creates legal inconsistency.

The outcome sought must clearly show the performance, the amount, the type of interest and its start, and the items of restitution or set-off. That the court applies the law on its own initiative does not mean that it will complete all the facts not raised or give an economic result not claimed. Under HMK 26 and 33, the binding nature of the claim and the legal characterisation are distinguished.

Under Article 111 HMK, an alternative claim is a procedural tool that allows an auxiliary claim to be examined if the principal claim is not accepted. It does not reverse on its own a substantive choice of law that has been validly exercised and has become binding. The position where there is a dispute as to whether rescission is valid is different from the creditor simultaneously holding all incompatible rights. The order of the alternative claims, the legal connection and the effect of earlier notices must be examined together.

Claims of uncertain amount after 31 July 2026

It is particularly inadvisable to reuse old petition templates unchanged in this area. By Law No. 7589, HMK 107 has been repealed, and a fourth paragraph added to HMK 109 provides that in a partial claim the subject of the claim may be increased in the same action once, until the end of the investigation, without being subject to the prohibition on extending the claim. It is also provided that, for the increased part, limitation is treated as interrupted from the date of the action. The transitional provision preserves the application of HMK 107 for actions brought before its repeal. [M4, M5]

Accordingly, the earlier general advice that "if the loss is to be calculated by an expert, an uncertain-amount action under HMK 107 is always brought" is no longer current. The date of the action, the divisibility of the claim, the partial claim, the time of increase, court fees and the defendant's right to defend should be assessed in light of the new provisions. Waiting for an expert examination does not suspend the immediate-notice requirement of substantive law or the conditions of the action.

For details, you may consult the section on yacht maintenance and refit contracts.

Jurisdiction, venue, mediation and time limits

There is no single competent court for a "default action"

Jurisdiction is determined by the nature of the contract and of the relationship between the parties. In a general private-law dispute the civil court of first instance; in a claim of a commercial nature the commercial court of first instance; in a consumer transaction the consumer court; and in disputes arising from a lease, the civil court of peace may come into play, subject to the relevant exceptions. The fact that one party is a merchant does not on its own make every dispute a commercial action. Variable monetary rules, such as the limits for applying to the consumer arbitration committee, must also be checked.

As regards venue, the defendant's place of residence, the place of performance, a valid jurisdiction agreement and mandatory rules on exclusive jurisdiction are examined. A claim relating to the title to immovable property may not be subject to the same venue assessment as a purely contractual money claim. Where there is a foreign element or an arbitration clause, the court's jurisdiction and the applicable law are considered separately. [M3, M4, M7]

Mediation as a condition of suit depends on the nature of the claim

The rule of pre-action mediation applies to commercial money claims, damages, annulment of an objection, negative declaratory actions and recovery of payment under Article 5/A TTK. For consumer disputes, Article 73/A of Law No. 6502 and its exceptions, and for lease relationships Article 18/B of Law No. 6325, are separately considered. The exception for eviction by enforcement without a judgment in lease matters does not mean that all lease disputes are excluded from mediation. [M3, M6, M7]

An application to mediation does not automatically replace every necessary notice declaring default or the intention to rescind. Substantive legal acts and the condition of suit must be kept apart. The accuracy of the parties, the debt relationship and the claims in the application form, and the consistency of the final minute with the scope of the claim, are important.

Time limits that must not be confused

The general ten-year period under Article 146 TBK applies to claims with no specific period. Article 147 TBK and special contractual provisions contain different periods. It is incorrect to apply the same period from the same starting point to every claim for damages and for restitution. The effect of mediation on the calculation of time is separately recorded, together with the interruption that may arise from bringing an action or enforcement, and any acknowledgment of debt. Sending a notice does not, as a general rule, replace all the acts that interrupt limitation. [M1, M6]

Interim protection, enforcement and recovery stage

When a choice of remedy is made, the aim is not only to win the case but also to enforce the judgment. Precautionary attachment serves to secure a money claim; interim injunctions protect the right in dispute. Their conditions, standard of proof and security differ. No claim gives the creditor an unlimited right to block all the debtor's assets. Special conditions are separately examined where the claim is secured by a pledge or is not yet due. [M4, M8]

The principal claim sought in an enforcement proceeding, the start of interest, the periods of the rate, the set-off of payments and the consistency of the enforcement route with the chosen right should be checked. The claim for return of an advance and the claim for specific performance have different scopes. Where a land-registry matter is concerned, the requirement of finality, the personal nature of the performance, the possibility of having the work done by a third party and the clarity of the judgment may affect the outcome of enforcement.

In settlement negotiations too, the account structure must be preserved. Does the payment plan grant a new maturity; how does it affect earlier rights of default; until when does security remain valid; what happens if the first instalment is not paid; what interest and loss items are reserved? The answers to these questions must be in the written text. Once a sum is seen to have been recovered, it must not be claimed a second time under another loss item.

Additional checks for contracts with a foreign element

If there is a foreign party, the use of foreign currency, or performance taking place in another country, the assumption that Turkish law applies must first be tested. The choice of law, international jurisdiction, the arbitration clause, the recognition and enforcement of a decision are separate issues. In international sales of goods, the scope of application of the CISG and the parties' intention to exclude it must also be examined.

Where the CISG applies, the conditions for breach, additional period and avoidance of the contract cannot be identified word for word with the terms of Turkish Code of Obligations. The word "termination" in a Turkish-language contract does not, by itself, resolve the question of the applicable law. This article explains the general framework of Turkish law; rather than using the same notice text directly in a cross-border contract, a legal and jurisdictional analysis should first be carried out. [M9, M10]

Frequently Asked Questions

If a debt is not paid on time, does the contract end automatically?

As a general rule, no. Delay, default and termination are different stages. Enforceability, notice or its exception, the necessary grace period and the proper notification of the chosen right are assessed. Any special provision of the law or valid contractual term is examined separately. Detailed explanation: How delay, default, defect and impossibility are distinguished.

Can an action be brought without a notice?

A notice is not a general precondition for every action; however, it may be required for the start of default and the rights attached to it. Even if the effect of a claim or a notice of enforcement is assessed separately, that route does not in every case retrospectively complete a missing notice and a necessary grace period for a past period. The condition of mediation as a condition of suit is also checked separately. Detailed explanation: When a notice is required and how it is proved.

If the contract states a date, can I rescind immediately?

The mere presence of a date is not always sufficient. A fixed-date term may make a notice of default unnecessary; whether a grace period is still required is, however, examined separately under TBK 123–124 and the special provisions. A fixed term and the uselessness of performance must be shown by concrete facts. Detailed explanation: How long should a grace period be, and when is it not required.

Can positive loss and negative loss be claimed together?

For the same breach and the same choice, the full benefit of performance that would have been obtained had the contract been performed, and the loss of a position that would have arisen had the contract never been relied on, cannot be cumulatively combined. The legal nature and double counting of separate items must be examined. An alternative claim does not, on its own, remove a binding choice of right. Detailed explanation: How the claim and type of action should be framed.

Is the return of an advance negative loss?

No. On rescission, the return of an advance concerns the restitution of performances. A loss that has arisen independently and been proved because of reliance on the contract is negative loss. It is incorrect to calculate the advance twice, both as restitution and as loss. Detailed explanation: The difference between rescission, restitution and negative loss.

If the debtor is without fault, is it not obliged to make any payment?

No. Absence of fault may affect certain claims for damages; it does not have the same result for specific performance, restitution after valid rescission and default interest on a money debt. Each claim's conditions are assessed separately. Detailed explanation: How fault, causation and the duty to mitigate loss are distinguished.

If I accept late delivery, do all my rights end?

Not in every case. However, the special provisions on penalty clauses, accrued interest, release and reservation are important. The nature of the delivery, any defects and the rights reserved must be clearly written in the record. A single general reservation does not create rights that have not arisen or have not been exercised in time. Detailed explanation: How penalty clauses, reservations and security change the outcome.

Can I certainly recover the inflation difference?

No unconditional answer can be given. Default interest, excessive loss, the period of the claim, the method of proof and current legislation are examined together. The Caner Şafak decision identifies a problem of effective redress; it does not set a ready-made compensation rate for each file. The 2026 interest change must also be taken into account. Detailed explanation: Default interest and excessive loss in money debts.

If the amount of loss is unknown, can the old HMK 107 model be used?

The old template should not be used directly for new actions. The repeal of HMK 107 on 31 July 2026, the power to increase under HMK 109/4 and the transitional provision on actions brought earlier must be taken into account. The date of the action and the structure of the claim are decisive. Detailed explanation: Claims of uncertain amount after 31 July 2026.

Is the title of a third party who acquired from the contractor always cancelled?

No. In light of the decision of the Grand General Assembly on the Unification of Case Law dated 16 May 2025, the claim to ownership or a mortgage said to have been acquired in good faith in reliance on the land registry must be assessed. The acquisition of a real right, good faith at the time of acquisition and concrete evidence are important; a contract with the contractor alone does not confer the same status. Detailed explanation: Third-party rights in construction in exchange for land share.

Glossary of terms

Enforceability (muacceliyet): The point at which the obligation may be demanded by the creditor.

Default (temerrüt): The legal position that arises when, while performance is possible and the necessary conditions have been met, the obligation is not performed on time.

Notice (ihtar): A declaration of intent that clearly informs the addressee that performance is demanded.

Grace period or extension (ek süre veya mehil): The appropriate final period for performance granted to the debtor after default.

Specific performance (aynen ifa): The performance of the undertaken obligation in accordance with the contract.

Positive loss (müspet zarar): The loss between the position of the assets that the properly performed contract would have secured and the present position.

Negative loss (menfi zarar): The loss that would not have been suffered because of reliance on the contract, had that reliance not existed.

Rescission (dönme): Withdrawal from the performance relationship under statutory or contractual conditions and the liquidation of reciprocal performances.

Termination (fesih): The ending, in particular of continuing obligations, with effect for the future.

Excessive loss (aşkın zarar): Loss, not covered by default interest on a money debt, which must be assessed separately.

Defence of non-performance (ödemezlik def'i): A defence against the party that has not performed or offered its counter-performance, allowing it to refrain from performance within the conditions.

Alternative claim (terditli talep): A procedural claim structure under which an auxiliary claim is examined if the principal claim is not accepted.

Turning the choice of right into a sound file

When used in the correct order, the options offered by TBK 125 serve the creditor's aim of performance, compensation or liquidation. First the type of contract and the order of performance should be determined, then enforceability and default, then the grace period or exception, and finally the content of the choice of right. The loss calculation should be built after that choice, and the facts should not be altered according to the result sought.

Each claim should be accompanied by the document on which it rests, the legal ground, the answer to the defence and the method of calculation. Restitution, interest, penalty clauses and security should be checked in separate lines. Such preparation enables the client to understand not only the legal opinion but also what is being asked for and why, what risk is being assumed and what the possible consequences are.

For the general framework, you may consult the firm's law of obligations page. This article is general legal information; it does not replace a proposal for action without examination of the contract and documents of the concrete case.

For details, you may consult the section on yacht rental contracts.

Sources and legal bases

M1 — Turkish Code of Obligations No. 6098 (Türk Borçlar Kanunu). In particular Arts. 40–48, 50–52, 97–102, 106–126, 131, 136–138, 146–147, 179–184, 212–213, 235–236, 315, 473, 484 and 589. Ministry of Justice text and UYAP legislation record. As the Ministry PDF bears an earlier consolidation date, recent amendments have been checked separately; it is not presented alone as the 2026 consolidated text.

M2 — Law No. 3095 on Statutory Interest and Default Interest (Kanuni Faiz ve Temerrüt Faizine İlişkin Kanun). In particular Arts. 1, 2 and 4(a). UYAP current legislation record. For the 2026 amendment, see M5.

M3 — Turkish Commercial Code No. 6102 (Türk Ticaret Kanunu). In particular Arts. 4, 5/A, 8, 18(3) and 22. UYAP legislation record.

M4 — Code of Civil Procedure No. 6100 (Hukuk Muhakemeleri Kanunu). In particular Arts. 2, 4, 6, 10, 12, 17, 26, 33, 109, 111, 190, 199, 389 and 400 et seq. UYAP legislation record. For repealed Art. 107 and new Art. 109(4), see M5.

M5 — Law No. 7589. Adopted: 16.07.2026; Official Gazette: 31.07.2026, issue 33326. In particular Arts. 10, 19–20, Provisional Art. 1/10 and Art. 26. TBMM adopted text. Used for currency checks on interest and the type of action.

M6 — Law No. 6325 on Mediation in Civil Disputes (Hukuk Uyuşmazlıklarında Arabuluculuk Kanunu). In particular Arts. 16, 18/A and 18/B. UYAP legislation record and Ministry of Justice mediation statements.

M7 — Law No. 6502 on the Protection of the Consumer (Tüketicinin Korunması Hakkında Kanun). In particular Arts. 68, 73 and 73/A. Ministry of Trade legislation page and current application statement. The variable monetary application limit is not stated in this article as a fixed figure.

M8 — Enforcement and Bankruptcy Law No. 2004 (İcra ve İflas Kanunu). In particular Art. 257 et seq.; enforcement provisions suited to the nature of the claim and the performance. Ministry of Justice laws and regulations page and relevant provision in the Ministry text.

M9 — Law No. 5718 on Private International Law and Procedure (Milletlerarası Özel Hukuk ve Usul Hukuku Hakkında Kanun). In particular Art. 24 on the law applicable to contractual obligations. Ministry of Justice text.

M10 — United Nations Convention on Contracts for the International Sale of Goods (CISG). Arts. 1 and 6 on scope and party autonomy; the relevant provisions on the buyer's remedies. UNCITRAL official text and status page.

K1 — Court of Cassation, Civil General Assembly, 06.12.2022, E. 2021/563, K. 2022/1659. The full text was examined in particular at §§ 47–59, the operative part and the dissent. Decision record. Used for negative loss, comparable transaction conditions and causation.

K2 — Constitutional Court, Caner Şafak [Plenary], App. No. 2024/41763, 08.07.2025. In particular §§ 60–66, 77–83, the operative part and the dissent were examined. Constitutional Court official decision record · Full-text access record. The historical postponement period in the decision is not presented as a general prohibition or period that continues today.

K3 — Grand General Assembly of the Court of Cassation on the Unification of Case Law, 16.05.2025, E. 2024/1, K. 2025/2. The reasoning on reliance on the land registry and good faith, and the operative part, were examined. Full-text record · Official Gazette publication. The De Jure decision links may require registration to open.

A1 — Gizem Görmez, Setting a Grace Period in Default of Obligations under Fully Bilateral Contracts (Tam İki Tarafa Borç Yükleyen Sözleşmelerde Borçlu Temerrüdünde Ek Süre Tayini), doctoral thesis, Ankara University, 2024. The sections on the function of the grace period, fixed terms and the time of choice were examined. Full text in the university archive.

A2 — İlyas Sağlam, Excessive Loss and the Proof of Such Loss (Aşkın Zarar ve Bu Zararın İspatı), Dokuz Eylül University Faculty of Law Journal, 28/1, 2026, pp. 473–523. DOI: 10.33717/deuhfd.1842082. The sections on general conditions and the proof debate were used. Full text of the journal.

A3 — İlyas Sağlam, "The Legal Position of a Third Party Acquiring an Independent Unit from the Contractor where the Landowner Rescinds, on the Decision of the Grand General Assembly on the Unification of Case Law dated 16.05.2025, E. 2024/1, K. 2025/2" (title abridged), Marmara University Faculty of Law Research Journal, 31/2, December 2025, pp. 1661–1699. DOI: 10.33433/maruhad.1793613. The study examines the legal position of a third party who acquires an independent unit from the contractor where the landowner rescinds. The sections on good faith and reliance on the land registry were used. Full text of the journal. The citation of the decision has also been separately verified against the full decision record.

A4 — Derya Ateş, Notice and Grace Period Concepts in Default of the Debtor (Borçlu Temerrüdünde İhtar ve Ek Süre Kavramları), Journal of the Turkish Justice Academy, issue 52, 2022, pp. 383–406. DOI: 10.54049/taad.1183667. The discussion of notice, periods and the combination of both in the same notice, particularly at pp. 390 and 401–402, was examined. Full text of the journal.

Source diagram — Attorney Hakan Dimdik, Default and Elective Rights, 30.01.2026. The visual diagram supplied by the user is the starting source for this study. The three options have been retained; generalisations such as the scope of money debts and the consequences for security have been explained and developed. This reference does not mean that the new article or the added assessments were written or reviewed by Attorney Hakan Dimdik.