1. Definition and Legal Nature of the Deposit 

Is the Deposit (Kapora) Given in Sales Transactions Refundable? According to the judicial decisions reviewed, the deposit (kapora) is defined as “earnest money” (pey akçesi) under Article 177 of the Turkish Code of Obligations (TBK) no. 6098. Its legal nature and functions are as follows:

Primary Nature as Earnest Money: A deposit (kapora) is money given by one party to another when a contract is made, not as a penalty for withdrawal, but as money given as proof that the contract has been concluded. Unless there is a contract to the contrary or local custom, the given deposit is deducted from the principal debt (Konya 4th Civil Court of Commerce, Istanbul Anadolu 13th Civil Court of Commerce, Sakarya Regional Court of Appeal).

Distinction from Forfeit Money: Unless explicitly agreed upon as “forfeit money” (withdrawal penalty), a deposit (kapora) does not carry this characteristic. Forfeit money, in case of withdrawal from the contract, results in the giver of the money forfeiting it if they withdraw, and the recipient refunding double the amount if they withdraw (TBK Art. 178); whereas earnest money (kapora) serves as proof that the contract has been concluded.

Ancillary Nature: A deposit is an ancillary (subsidiary) condition that serves to strengthen the main debt. Therefore, it is dependent on the validity of the main contract (Court of Cassation 3rd Civil Chamber – 2015/16368, Court of Cassation 13th Civil Chamber – 2010/16031).

2. Conditions for Validity 

The validity of the deposit and the associated penalty clauses depends on whether the underlying purchase and sale agreement was made in accordance with the legal form requirements:

In Real Estate Sales: Contracts for the sale of registered immovable properties must be made in an official form (in the presence of a land registry official or notary public) (TMK m.706, TBK m.237, Tapu Kanunu m.26). Real estate sales contracts made in ordinary written (private) form are invalid. Since the contract is invalid, the provisions regarding the deposit or penalty clause contained in this contract are also considered invalid (Court of Cassation 3rd Civil Chamber – 2015/6478, Istanbul 10th Civil Court of Commerce, Konya 3rd Civil Court of Commerce).

In Vehicle Sales: Contracts transferring the ownership of vehicles registered in traffic must be made before a notary public (Road Traffic Law No. 2918 art. 20/d). Private vehicle purchase and sale contracts made outside a notary public and penalty clauses based on these contracts are legally invalid (Bakırköy 4th Civil Court of Commerce, Court of Cassation 3rd Civil Chamber – 2015/12032, Bakırköy 6th Civil Court of Commerce).

Exceptional Cases: There are also evaluations stating that protocols which do not contain a promise to sell immovable property, and only determine the amount of the deposit and the conditions for its return, are not subject to a specific validity form (Istanbul Anatolian 2nd Civil Court of Commerce). Furthermore, in commercial goods purchases (e.g., construction machinery), even oral agreements can form a basis for the existence of a deposit (Court of Cassation 19th Civil Chamber).

3. Return Conditions 

The return of the deposit varies according to the validity of the contract, the fault of the parties, and the contract provisions:

Refund in Invalid Contracts (Unjust Enrichment): In contracts deemed invalid due to non-compliance with formal requirements (real estate or vehicle), the parties do not incur rights or obligations. In this case, the paid deposit must be refunded according to the provisions of “unjust enrichment” (unjust acquisition). Even if the contract contains provisions such as “the party withdrawing forfeits the deposit,” these provisions cannot be applied because the contract is invalid, and the deposit is refunded (Supreme Court 3rd Civil Chamber – 2016/476, Bakırköy 2nd Civil Court of Commerce, İzmir 5th Civil Court of Commerce, Adana Regional Court of Appeals).

Non-formation or Non-performance of the Contract:

In case the sale does not take place or the seller fails to deliver the goods, the received deposit must be refunded (Bakırköy 5th Civil Court of Commerce, İst. Anadolu 13th Civil Court of Commerce – 2021/307K, İst. Regional Court of Appeals 43rd Civil Chamber).

If the seller cannot prove the price of the goods or the contract terms, and the contract becomes invalid, the deposit is refunded (Supreme Court 19th Civil Chamber).

Withdrawal and Contract Provisions:

Buyer’s Withdrawal: In a valid contract, if the parties “have agreed that the earnest money will not be refunded if the buyer withdraws,” this provision is binding and no refund will be made (Istanbul Anatolian 3rd Civil Court of Commerce – 2021/152, Istanbul Regional Court of Appeals 12th Civil Chamber).

Seller’s Withdrawal: If it is agreed in the contract that the seller will refund the earnest money or pay compensation if they withdraw, the obligation to refund arises when the seller withdraws (Izmir 1st Civil Court of Commerce, Istanbul 10th Civil Court of Commerce).

Agreed Termination (Mutual Agreement) and Release: If the parties terminate the contract by mutual agreement or agree to a release for a specific amount, this agreement is taken as basis. For example, if it was agreed to refund half of the earnest money, the remaining balance cannot be claimed (Istanbul Regional Court of Appeals 3rd Civil Chamber, Istanbul Regional Court of Appeals 43rd Civil Chamber). A suggested article .

Why is Expert Lawyer Support Necessary? (In Light of Practices in Istanbul – Ankara – Izmir)

Technical issues such as deposits (earnest money), withdrawal fees, and immovable property/vehicle sales contracts can lead to serious complications in practice, due to both the Turkish Code of Obligations and special legislation regarding formal requirements. Especially since different evaluations can be seen even among courts in big cities like Istanbul, Ankara, and Izmir, it is of great importance for the process to be managed by an expert lawyer from start to finish.

The support of an experienced lawyer is necessary in this field, because:

The correct establishment of the relationship between formal requirement – invalidity – unjust enrichment determines the outcome of the lawsuit.

Whether a deposit is earnest money or a withdrawal fee often depends on the interpretation of documents; it requires expertise.

In every scenario such as a promise to sell immovable property, a vehicle sales contract, or the purchase of commercial goods, the conditions for validity are different.

Incorrect legal classification can lead to losing the case entirely or facing unnecessary compensation risks.

Correctly following the current precedents of the Court of Cassation plays an outcome-changing role, especially in distinguishing between a deposit and a penalty clause.

The validity – bindingness – interpretation of protocols, contracts, or release texts signed by the parties is an area requiring legal expertise.

Therefore, the legal support provided by experienced lawyers working within 2M Law Office in earnest money claims, penalty clause demands, or refund lawsuits arising from invalid contracts is of great importance for the proper management of the process and preventing loss of rights.