Penalty clause in Turkish law

Penalty clause has become a way of assurance that is often applied in practice due to the increase of debtor-creditor relationship and the decrease amount of trust between parties. In our study, the penalty clause in Turkish Law is examined on the basis of Turkish Code of Obligations. During the analysis, notable opinions in the doctrine and current Supreme Court decisions are included. Our study is comprised of introduction, three chapters and conclusion. Within this context, in the first chapter, the notion, history, definition and elements of penalty clause are explained and the aim and purview of the penalty clause are examined. In the second chapter, the types of penalty clause are explained and each type is addressed with their own elements. In the third chapter, the relationship of the penalty clause with cost, the reduction of the excessive penalty clause, and the procedural actions are analyzed. After that, the penalty clause is analyzed according to Turkish Commercial Code in terms of merchants and the conditions in which the penalty clause ends are explained.