Most disputes between Turkish and German business partners don't stem from bad intent, but from points left unclear in the contract. Different legal systems, different commercial habits and language differences mean the same sentence can carry different meanings for each side. Here's a checklist to run through before signing.
■ 1. Is the applicable law clearly stated?
The contract should clearly specify which country's law governs it. If this is left out, determining the applicable law becomes a separate legal dispute the moment a conflict arises.
■ 2. Is jurisdiction or an arbitration clause defined?
Will disputes be heard in Germany or Turkey, or is arbitration foreseen instead? Without this clause, the question of "where do we file" alone can cost significant time and money once a dispute starts.
■ 3. Which language version prevails?
If the contract exists in two languages, it should state which version prevails in case of dispute. Otherwise, translation discrepancies can become a dispute of their own.
■ 4. Are payment terms and default interest clear?
Payment deadlines, currency, who bears bank charges, and the default interest rate should all be stated explicitly. Vague phrases like "payment within a reasonable time" should be avoided.
■ 5. Is the force majeure clause up to date?
The definition of force majeure and how it affects each party's obligations should be clear. Generic, copy-pasted clauses are often insufficient.
■ 6. Are IP and confidentiality provisions adequate?
Especially in technology, manufacturing or consulting relationships, it should be clearly set out which party keeps which information confidential, for how long, and who owns the resulting intellectual property.
■ 7. Are termination conditions and notice periods clear?
The contract should state under what conditions and with what notice period it can be terminated. This matters especially for contracts of indefinite duration.
■ 8. Is the contractual penalty (Vertragsstrafe) proportionate?
Contractual penalties are reviewed differently under German law than under Turkish law. Disproportionate or vaguely worded penalty clauses can raise enforceability issues.
■ 9. Do general terms and conditions (AGB) come into play?
In Germany, general terms and conditions (Allgemeine Geschäftsbedingungen) are subject to specific judicial review. Check whether the other party's standard terms are being silently incorporated into the contract.
■ 10. Has signing authority been verified?
Confirm that the person signing on behalf of the counterparty is actually authorised to represent the company (commercial register extract, signature authorisation, etc.). This step should not be skipped, especially for high-value contracts.
This article is for general information only and does not constitute legal advice. Every contract must be assessed in its own commercial and legal context.
Turkut Legal advises on drafting and reviewing commercial contracts between Turkish and German parties, and on dispute resolution strategy where needed. To have your contract reviewed before signing, get in touch with us. Counsel available in Turkish, English and German.