The United Nations Convention on Contracts for the International Sale of Goods (CISG) serves as the backbone of international trade law in Turkey. Since its adoption, the CISG has become the default legal framework for many cross-border commercial transactions, effectively replacing domestic laws in specific scenarios. However, navigating the interaction between this international convention and local regulations, such as the Turkish Commercial Code and the Code of Obligations, can be complex for legal practitioners. This article provides a practical analysis of how Turkish courts apply the CISG. It examines the conditions for its application, its hierarchy within the Turkish legal system, and the specific strategic advantages it offers to both buyers and sellers when compared to traditional Turkish domestic law.
For the CISG to apply, the parties must have their places of business in different States, and the contract must relate to the sale or production of movable goods. Primarily, the CISG applies if both States are Contracting States to the Convention. However, even if only one party is located in a Contracting State, the CISG still applies if the conflict of laws rules of the court hearing the dispute point to the law of a Contracting State. When applying the Convention, factors such as the nationality of the parties, their status as merchants, or the civil versus commercial nature of the contract are irrelevant. Conversely, if the parties are in the same country, if the relevant State is not a party to the CISG, or if the contract expressly excludes the CISG, courts will directly apply the Turkish Commercial Code (TCC) and the Turkish Code of Obligations (TCO) instead.
Furthermore, the CISG does not apply to contracts where the seller’s main obligation is to provide labor or services, rather than goods. It also excludes contracts where the buyer supplies a significant part of the materials for manufacture, as well as consumer sales for personal or family use. Under Turkish law, contracts where a contractor supplies materials to produce a work are often characterized as “contracts for work” under Article 470 of the TCO. This characterization depends on subjective factors such as the distinctive nature of the work, the intensity of labor involved, and whether the order is “tailor-made.”
In contrast, Article 3(1) of the CISG tends to broaden the Convention’s scope by treating contracts for the supply of manufactured goods as “contracts of sale.” This differs from the Turkish doctrine and Court of Cassation practice, which often focus on the concept of a “contract for work.” Instead of debating the subjective balance between labor and materials, the CISG uses a formal economic test: “who supplies the essential part of the materials.” Under the CISG, regardless of how customized the goods are or how much labor is required, if the buyer does not supply the essential materials, the relationship is indisputably a contract of sale.
APPLICATION OF SUPPLEMENTARY RULES OF LAW AFTER CISG RULES
As a rule, Turkish courts prioritize the CISG for international commercial sales contracts. This priority stems from Article 90 of the Constitution, which gives duly ratified international agreements the force of law. Merely choosing “Turkish law” in a contract does not exclude the CISG, because the CISG is an integral part of Turkish law. To exclude the Convention, parties must include an explicit exemption clause pursuant to Article 6 of the CISG. In practice, courts apply provisions in a specific hierarchy: first, the mandatory rules of Turkish substantive law; second, the contractual provisions; third, the CISG rules; and finally, supplementary rules of domestic law to fill any gaps.
Within this framework, domestic law steps in to fill gaps left by the CISG. For example, Article 78 of the CISG mandates that interest be paid on delayed payments but deliberately leaves the interest rate undefined. In such cases, if conflict of laws rules point to Turkish law, Law No. 3095 or the default interest rates in the TCC apply as supplementary norms. Similarly, while Article 39 of the CISG sets a two-year limit for giving notice of defects, it does not set a general statute of limitations for filing a lawsuit. This gap is filled by the TCO. For instance, if a seller delivers goods but remains unpaid for five years, the general limitation periods under the TCO (or special commercial periods) apply because the CISG lacks a specific provision for bringing legal actions.
INCOMPATIBILITY WITH MANDATORY RULES OF LAW
A clear example where mandatory domestic law overrides the CISG involves contractual penalties. The CISG strictly upholds freedom of contract; therefore, a high penalty clause agreed upon by merchants is generally valid and enforceable under the principle of pacta sunt servanda. However, the last paragraph of Article 182 of the TCO mandates that a judge must reduce a penalty clause if it is excessive. This is a mandatory rule based on public policy, designed to prevent economic ruin, even for merchants. Since Article 4(a) of the CISG leaves issues of contract validity to national law, Turkish courts will set aside the CISG’s freedom of contract approach in such cases and apply the mandatory Turkish rule to reduce the penalty.
ADVANTAGES OF CISG OVER TURKISH LAW FROM THE PERSPECTIVE OF THE BUYER
Unlike Continental European and Turkish law, the CISG adopts a liability model influenced by Anglo-Saxon law that resembles “strict liability” or “guarantee liability.” In this system, a debtor’s liability does not depend on fault. By contrast, Turkish law is essentially fault-based. Although merchants in Turkey are held to a higher standard of care, they can still escape liability if they prove they exercised due diligence. Under the CISG’s strict liability approach, exercising due care does not automatically release the debtor from liability.
Article 74 of the CISG allows an aggrieved party to claim full damages, including lost profits, provided these damages were foreseeable at the time of the breach. In comparison, Article 112 of the TCO requires the debtor to compensate for losses only if they cannot prove they were faultless. While Article 18(2) of the TCC requires merchants to act as “prudent businessmen,” raising the standard of care, the underlying principle remains fault-based.
The 13th Civil Chamber of the Istanbul Regional Court of Appeal has confirmed this distinction, ruling that under the CISG, a seller need not be at fault to be liable for damages. This creates a significant advantage for the buyer. In a recent case, the claimant argued that Article 74 of the CISG contains no reference to fault, and the court ruled in favor of the claimant (Istanbul Regional Court of Appeal, E. 2022/1193, K. 2025/370). This confirms that the compensation framework under the CISG is broader and offers more protection to the buyer than Turkish law.
Article 49 of the CISG allows the buyer to avoid the contract only in cases of fundamental breach, while Articles 74 and 77 offer extensive damages and restitution. The difference between the two systems is stark in “procurement risk” scenarios, where a seller fails to deliver goods because their third-party supplier failed. For example, if a Turkish seller promises goods to a German buyer but fails to deliver due to a machine breakdown at the manufacturer’s facility, the outcome depends heavily on the applicable law. Under the TCO, the seller could avoid liability by proving they acted as a prudent merchant, selected a competent manufacturer, and were not personally at fault. Since Turkish law is based on fault, proving an absence of fault can release the debtor, even if the event was not force majeure.
However, under Article 79 of the CISG, the seller’s defense is much more limited. To be released from liability, the impediment must be beyond the control of both the seller and their third-party supplier. Furthermore, the impediment must be unforeseeable and unavoidable. Therefore, operational issues like machine failure or personnel negligence do not constitute a valid excuse. Even if the seller is blameless, they are liable because they assumed the risk of procuring the goods. Article 79 provides an exemption only for impediments that could not reasonably be avoided; it does not cover typical commercial risks arising from third parties. Thus, the CISG focuses on the objective result rather than subjective diligence, providing the buyer with a near-absolute guarantee of compensation.
ADVANTAGES OF CISG OVER TURKISH LAW FROM THE PERSPECTIVE OF THE SELLER
For the seller, the CISG offers a major advantage by making it harder to terminate the contract and by granting the seller a “right to cure” defects. Under the Turkish Code of Obligations, if goods are defective, the buyer can often rescind the contract without proving the defect is fundamental. This exposes the seller to the heavy burden of taking back goods and paying for transportation and storage.
Article 48 of the CISG, however, gives the seller a “second chance” to remedy the defect at their own expense, even after the delivery date. Considering the high costs of returns in international trade, this provision protects the contract. For example, if an exported machine has a missing part, Turkish law might allow the buyer to immediately rescind the contract. Under the CISG, the seller can prevent termination by offering to supply the missing part immediately, provided it does not cause unreasonable inconvenience. The buyer cannot arbitrarily reject this reasonable offer to cure. Thus, the CISG strengthens the principle of keeping the contract alive (favor contractus).
Under Article 227 of the TCO, a buyer facing defective goods has four options: rescind the contract, request a price reduction, demand free repair, or request a replacement. While the seller can stop rescission by immediately providing a replacement, the Turkish system generally favors the buyer’s choice. In contrast, Article 48 of the CISG explicitly allows the seller to remedy the failure, by repair or other means, even after the delivery date, provided it does not cause unreasonable delay or uncertainty for the buyer. This significantly narrows the buyer’s ability to terminate the contract compared to Turkish law.
In conclusion, the CISG is an integral part of the Turkish legal system but differs significantly from domestic law (TCO/TCC). It departs from the fault-based principle, offering buyers a robust compensation regime that approaches strict liability. Simultaneously, it protects sellers by making contract termination more difficult through mechanisms like the right to cure and the principle of preserving the contract. This creates a balanced, pragmatic legal regime designed for international trade. Understanding these differences and ensuring the application of the most advantageous law is crucial for effective contract negotiation and dispute resolution.