Agency Agreement

Legal Framework in Turkey

Agency Agreement is governed primarily by the Turkish Commercial Code No. 6102 (Articles 102-123), which provides specific regulations for agency relationships. The Turkish Code of Obligations No. 6098 applies supplementarily for matters not explicitly covered in the Commercial Code. Understanding these provisions is essential for drafting enforceable agreements.

Portfolio Compensation (Article 122)

Under Article 122 of the Turkish Commercial Code, an agent is entitled to claim portfolio compensation (goodwill indemnity) if specific statutory conditions are met. These conditions include:

• Significant benefit: The principal continues to benefit substantially from customers acquired through the agent’s efforts after termination.
• Loss of remuneration: The agent loses commissions/remuneration that would have arisen from that customer base if the relationship had continued (or for transactions expected within a short time).
• Equity: Payment is equitable considering the circumstances.
• Disqualifiers: No compensation if the agent terminated without just cause, or if the principal terminated for just cause attributable to the agent’s fault.

In practice, portfolio compensation is subject to statutory limits and must be asserted within a defined period after termination; the amount is typically assessed with reference to the agent’s historical average annual commissions/payments and equity adjustments.

Drafting Considerations

Although Turkish law does not require agency agreements to be in writing for validity, operating without a written contract creates serious evidentiary and commercial risks. A written agreement is essential to prove authority limits, exclusivity arrangements, and the specific terms governing compensation.

When drafting contracts involving agency agreement, attention should be paid to Turkish-specific requirements and practices. Bilingual contracts (English-Turkish) are common for international transactions. In Turkish proceedings, submissions and interpretations are handled in Turkish, so bilingual contracts should be tightly aligned; use a clear language/supremacy clause and ensure the Turkish text is professionally prepared to avoid interpretation disputes.

Parties may choose governing law in cross-border contracts, but Turkish courts (and Turkish mandatory rules) may still apply certain protective provisions depending on the circumstances, the place of performance, and the forum.

Disclaimer: The information provided in this glossary entry is for general informational purposes only and does not constitute legal advice. For specific cases, please seek professional legal counsel.