Clauses to Check Before Signing a Commercial Contract: Delivery, Payment, Liability and Termination

As of 1 January 2026, the special default interest rate applicable to late payment in the supply of goods and services between merchants took effect at an annual rate of 43%; in 2025 that rate stood at 53.25%. This single figure alone shows why the payment clause in a commercial contract is never a mere formality. Before signing a commercial contract, four groups of provisions must be checked separately: when and how delivery will take place, on what schedule and at what interest rate payment is to be made, which party bears responsibility for which risk, and under what conditions the contract may be terminated. In practice, these four clause groups are the source of most commercial disputes, and they are far harder to renegotiate once the contract has been signed.

Delivery Terms

The delivery clause must clearly fix the date, place and condition under which the goods or services pass to the other party. An undefined delivery date makes it disputable which party is in default if delivery is delayed. For example, if a contract between a manufacturer and a wholesale buyer simply states that goods “will be delivered at a suitable time,” the buyer seeking damages for the delay will run into difficulty precisely because no date was fixed.

The delivery clause should also expressly address the passing of risk. Whether the buyer or the seller bears the risk if the goods are damaged in transit depends on the place of delivery. In contracts allowing partial delivery, the acceptance conditions and inspection period for each partial delivery should also be separately regulated; otherwise, a dispute over whether the goods are defective can surface even months after delivery.

Payment Schedule and Default Interest

The payment clause should separately state the amount, due date, and the interest rate to apply in the event of late payment, because if the contract does not fix a rate, the statutory default rate that applies instead can turn out to be very unfavorable to one of the parties. Under Article 1530 of the Turkish Commercial Code (TTK), the special default interest rate applicable to late payment in the supply of goods and services between merchants is set annually by Central Bank communique, and for 2026 it is 43% per annum. Where the contract does not fix a separate rate, or the agreed rate is invalid, this special regime applies by default.

For example, if a company receiving services plans to pay an invoice on 90-day terms but the contract merely says payment will be made “after the invoice date,” the lack of a fixed due date also makes the starting point for default interest disputable. In contracts providing for an advance payment, the stage at which the advance is to be refunded, and, where a letter of guarantee is required, which bank it must come from and for what term, should also be written into the payment clause.

Liability and Limitation of Damages

The liability clause limits in advance which party is responsible for which kind of loss and to what extent; without it, the parties are exposed to full liability under the general provisions of law once damage occurs. In a software supply contract, it is common practice to exclude indirect losses arising from system downtime (such as lost profits or reputational harm) from the scope of liability; if that kind of limitation is not written into the contract, the supplier may face a claim for compensation far larger than anticipated.

Force majeure is also part of the liability clause. The Turkish Code of Obligations (TBK) does not separately define force majeure; under legal doctrine and case law, an event must combine externality, unavoidability and unforeseeability to qualify as force majeure, and its consequences are assessed under the impossibility provisions of TBK Article 136. Listing concrete examples of force majeure in the contract (natural disaster, a decision of a public authority, a general strike, and the like) reduces future disputes over whether a given event falls within that scope.

Termination and Penalty Clause

The termination clause sets out under what circumstances and with what notice period the contract may be terminated; if that period is not specified, the question of just cause is left to the courts. One issue that often comes up in practice is that standard template contracts tend to set a one-sided, short notice period for termination. Some suppliers argue that a short notice period preserves commercial speed; this approach should nonetheless be treated as risky, since it can leave the other party facing termination before it has had the chance to find an alternative supplier.

The penalty clause should be read together with the termination clause. TBK Articles 179-182 set out the types of penalty clauses and allow a judge to reduce, on their own motion, a penalty found to be excessive. For example, if a construction materials supply contract provides for a fixed daily penalty for delay, that penalty must stay proportionate to the total contract price; otherwise, a court may reduce the portion found excessive. In extraordinary circumstances where performance becomes excessively burdensome, adapting or terminating the contract is also possible under TBK Article 138.

A Final Check Before Signing

After reviewing each of the four clause groups on its own, check whether they contradict one another; for instance, a short termination notice period sitting alongside a long payment term in the same contract can leave an unresolved outstanding balance at the moment of termination. A practical review order is as follows: first clarify the delivery date and the passing of risk, then adjust the payment schedule and default interest rate accordingly, next weigh the liability limitations against the real commercial risk, and finally bring the termination and penalty clause into line with the other three.

Signing a standard template contract without amendment saves time, but it does not generally keep the allocation of risk between the parties balanced, since the party that drafted the template has usually structured it to reduce its own exposure already. Negotiating all four clauses separately is the most practical way to head off a future dispute before it reaches the courts; a detailed look at the contract drafting and review process in the field of commercial contracts can also be useful here. Where a payment delay escalates into enforcement proceedings, it is worth understanding how an action to annul an objection to enforcement proceedings works. The value of preventing disputes at the contract stage follows the same logic found in the preventive law approach.