Enforcing Contractual Liquidated Damages & Penalty Clauses
Contractual penalty clauses (Cezai Şart) under Articles 179-182 of the Turkish Code of Obligations incentivize performance and compensate breach.
1. Enforceability of Penalty Clauses
Creditors can demand agreed penalty amounts without needing to prove actual financial damage suffered from the breach.
2. Judicial Reduction of Excessive Penalties
While commercial merchants are expected to act prudently, courts reserve the statutory right to reduce excessively high penalties that threaten economic ruin.
