Performance and Reduction of Contractual Penalties

Legal Article · 12 November 2026
Av. Thomas Andreas Di Constantinople

A contractual penalty is a performance linked to breach such as complete or improper non-performance. Article 179 of the Turkish Code of Obligations regulates its relationship with the principal duty according to the breach specified. While an election between performance and penalty may generally arise, a different rule governs penalties for failure at a specified time or place.

A penalty linked to delay or place may be sought with principal performance under statutory conditions. Express waiver or acceptance without reservation may affect that right. The clause's existence alone is therefore insufficient; timing of acceptance and notices must also be examined.

Under Article 180 of the Turkish Code of Obligations, the creditor need not necessarily prove actual loss for the penalty. Loss exceeding it engages further statutory conditions. Penalties and delay damages are different legal items; combined demands must avoid double compensation.

Although parties can fix the amount, Article 182 of the Turkish Code of Obligations provides judicial reduction of excessive penalties. Commercial matters and merchant debtors require attention to special rules. Validity of the principal debt, impossibility, and debtor responsibility may also affect recoverability; not every penalty clause applies unconditionally.

Legal Basis: Turkish Code of Obligations No. 6098, Articles 179–182. Official legislative text.

This article has been prepared for general legal information purposes.