Jurisdiction: United States / New York

Contracts for Doing Business in the US

Last verified: January 2026

Attorney-ReviewedUnited StatesUpdated January 25, 2026

TL;DR

  • Written contracts are the primary evidence of commercial relationships under US law — verbal agreements are difficult to prove and certain transactions require writing.
  • A governing law clause determines which state's substantive law interprets the contract — New York and Delaware are common choices.
  • Worker classification (employee vs. contractor) carries significant tax, liability, and compliance implications.
  • For cross-border contracts, arbitration clauses enable enforcement under the New York Convention across 170+ countries.
  • Red-flag clauses (unlimited indemnification, vague IP assignment, one-sided termination) can expose a party to disproportionate risk.
  • Electronic signatures are legally valid for most US commercial contracts under ESIGN and UETA.

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Contract Enforceability in the US

US contract law is predominantly state law, derived from common-law principles and, for the sale of goods, the Uniform Commercial Code (UCC). Before examining specific contract types, it is essential to understand the five elements that must coexist for a contract to be valid and enforceable.

1. Offer (İcap)

A clear, definite proposal communicated to the offeree, demonstrating the offeror's willingness to be bound upon acceptance. The offer must contain sufficiently definite terms — at minimum, the parties, subject matter, and consideration. Advertisements and price lists are generally treated as invitations to negotiate, not binding offers, unless they contain specific, limiting language (e.g., 'first come, first served' with a stated quantity). An offer can be revoked at any time before acceptance, unless supported by separate consideration (an option contract) or made irrevocable by statute (UCC firm offer rule for merchants, Section 2-205).

2. Acceptance (Kabul)

An unconditional assent to the terms of the offer. Under the common-law 'mirror image rule,' any material alteration to the terms constitutes a counteroffer, not an acceptance — the original offer is thereby rejected. The UCC relaxes this rule for transactions between merchants: under Section 2-207, a definite expression of acceptance operates as an acceptance even if it contains additional or different terms, unless acceptance is expressly conditioned on assent to the new terms. Acceptance must be communicated through the method specified in the offer; if none is specified, any reasonable method suffices.

3. Consideration (Karşılık / İvaz)

A bargained-for exchange of value between the parties — a promise for a promise, a promise for an act, or a promise for forbearance. Each party must incur a legal detriment or confer a legal benefit. Past consideration (a benefit already conferred before the promise was made) does not satisfy this requirement. Nominal consideration ($1 in exchange for an option) is generally sufficient. Without consideration, an agreement is typically unenforceable, with limited exceptions: promissory estoppel (detrimental reliance), charitable pledges, and modification of existing contracts under the UCC (Section 2-209, which does not require consideration for good-faith modifications).

4. Capacity (Ehliyet)

Parties must possess legal capacity to enter into a binding agreement. Minors (under 18 in most states), individuals adjudicated mentally incompetent, and persons under the influence of substances to the degree they cannot understand the transaction may lack capacity. Contracts entered into by parties lacking capacity are generally voidable (not void) — the incapacitated party may choose to affirm or disaffirm. For business entities, the individual executing the contract must have actual or apparent authority to bind the organization; absent such authority, the entity may not be bound.

5. Legality (Hukuka Uygunluk)

The contract's subject matter and purpose must be lawful. Agreements to commit crimes, engage in fraud, restrain trade unreasonably, or violate public policy are void ab initio and confer no enforceable rights on either party. Where illegality affects only a severable portion of the contract and a valid severability clause exists, the remaining provisions may survive. Courts in some jurisdictions will reform rather than void an overly broad restrictive covenant.

The Parol Evidence Rule

Where parties have reduced their agreement to a final, integrated written document, the parol evidence rule bars the introduction of prior or contemporaneous oral or written statements to contradict its terms. A well-drafted 'entire agreement' or 'merger' clause reinforces this protection by declaring that the written contract supersedes all prior negotiations, understandings, and agreements. Exceptions permit parol evidence to show fraud, duress, mutual mistake, ambiguity requiring clarification, or the existence of a condition precedent. The practical implication is significant: once you sign a comprehensive written contract, earlier email exchanges, verbal promises, or draft term sheets will generally be inadmissible to alter the contract's meaning.

These enforceability principles apply to every contract type discussed on this page. Whether you are executing an NDA, a Service Agreement, or an Independent Contractor Agreement, the same foundational requirements govern whether the agreement will be upheld in court. For entity-related contracts, note that when you form an LLC in the US, the operating agreement is itself a contract among members subject to these same rules.

Why Written Contracts Matter

US contract law generally does not require a written instrument for a valid agreement — oral contracts can be enforceable. However, the practical reality of commercial litigation makes written contracts indispensable for three reasons.

Enforceability and the Statute of Frauds

The Statute of Frauds, codified in every US state, requires certain categories of contracts to be in writing to be enforceable: agreements that cannot be performed within one year, contracts for the sale of land, promises to pay another person's debt, and sale of goods exceeding $500 under UCC Article 2. A contract falling within these categories without a signed writing is voidable by the party against whom enforcement is sought. Beyond these statutory requirements, many courts view the absence of a written agreement as evidence that no binding contract exists.

Evidentiary Value

In litigation and arbitration, a well-drafted written contract is the most reliable evidence of the parties' intent. The parol evidence rule — a fundamental doctrine of US contract law — generally excludes prior or contemporaneous oral statements from contradicting the terms of a fully integrated written agreement. This means the written document becomes the definitive record of the deal. Without it, disputes reduce to credibility contests over who said what, with unpredictable outcomes.

Dispute Prevention and Resolution

Written contracts prevent disputes before they arise by establishing clear expectations. A comprehensive contract addresses foreseeable contingencies: what happens if a deadline is missed, how scope changes are handled, which party bears specific risks, and how the relationship ends. When disputes do arise, forum selection and arbitration clauses channel them to predetermined venues with predictable procedures. For cross-border relationships, these clauses are particularly valuable — they eliminate preliminary jurisdictional battles that can consume months and significant legal fees.

Contract Types for US Business Operations

The following contract types cover the most common commercial relationships encountered by businesses operating in or with the United States. Each type serves a distinct function; in practice, a single business relationship may require several of these agreements working in combination.

Non-Disclosure Agreement (NDA)

Protects confidential information exchanged between parties. Defines what constitutes confidential information, permitted disclosures, duration of obligations, and remedies for breach. Essential before discussing business ideas, proprietary processes, client lists, or financial data. Mutual NDAs provide reciprocal protection; unilateral NDAs protect only the disclosing party.

Service Agreement

Defines the scope, deliverables, payment terms, timeline, and general conditions for providing professional services. Serves as the legal foundation of client-provider relationships. Should address acceptance criteria, revision limits, expense reimbursement, and what happens when the scope changes. Industry-specific variations exist for consulting, marketing, design, and technology services.

Independent Contractor Agreement

Establishes a non-employment relationship for hiring contractors. Critical for proper worker classification — misclassification can trigger IRS penalties, back taxes, and state labor law violations. Must address the contractor's control over methods and schedule, provision of own tools, ability to work for other clients, and absence of employee benefits. Should include clear IP assignment provisions and tax identification requirements (W-9 or W-8BEN).

Freelance Service Agreement

Tailored for freelance professionals providing project-based services. Covers project scope and milestones, revision rights and limits, payment schedules (deposits, milestone payments, final payment), and ownership of work product. Note: New York City's Freelance Isn't Free Act requires written contracts for engagements valued at $800 or more and mandates timely payment. Similar legislation exists or is pending in other jurisdictions.

Influencer Agreement

Governs brand collaborations, sponsored content, and social media partnerships. Addresses FTC disclosure requirements (endorsement guidelines), content approval workflows, usage rights and licensing of created content, exclusivity periods, performance metrics, and payment structures (flat fee, per-post, affiliate commission). Must ensure compliance with platform-specific advertising policies.

Employment Agreement

Formalizes the employer-employee relationship. Covers position and duties, compensation and benefits, work schedule, at-will or fixed-term employment status, confidentiality obligations, non-compete and non-solicitation covenants, and termination conditions. US employment is generally "at-will" (either party can terminate at any time for any lawful reason), but contractual terms can modify this default. Must comply with federal (FLSA, Title VII) and applicable state employment laws.

Partnership / Operating Agreement

Defines the internal governance structure of a partnership or LLC. Covers ownership percentages, capital contributions, profit and loss allocation, management authority, voting rights, transfer restrictions, buy-sell provisions, and dissolution procedures. For LLCs, the Operating Agreement is the single most important governance document — it determines member rights, manager authority, and procedures for major decisions. Without one, default state law provisions apply, which may not align with the parties' intentions.

Licensing Agreement

Grants permission to use intellectual property (trademarks, patents, copyrights, software, trade secrets) under defined conditions. Specifies whether the license is exclusive or non-exclusive, the territory and duration, permitted uses, sublicensing rights, royalty structure, quality control standards, and conditions for termination. Distinct from an IP assignment, which transfers ownership entirely. For software, distinguishes between SaaS licenses, perpetual licenses, and open-source license compliance.

Red Flags and Dangerous Clauses

Certain contract provisions can create disproportionate exposure for one party. When reviewing any contract — particularly one drafted by the counterparty — watch for the following patterns.

Unlimited Indemnification

An indemnification clause without a cap exposes the indemnifying party to unlimited financial liability. In balanced commercial contracts, indemnification is typically limited to the total contract value or a multiple thereof, with carve-outs for gross negligence, willful misconduct, or IP infringement. An obligation to indemnify against 'any and all claims, losses, and damages' without limitation is a significant red flag. Negotiate a cap, or at minimum ensure the scope is narrowed to claims arising directly from your breach.

Unreasonable Non-Compete Restrictions

Non-compete clauses must be reasonable in scope, duration, and geographic area to be enforceable. A non-compete that prohibits all competitive activity globally for five years is almost certainly unenforceable in most US states. Recent trends favor narrowing enforcement: the FTC proposed a broad ban on non-competes for employees (currently challenged in court), and states like California, Oklahoma, and North Dakota largely prohibit them. Even where enforceable, courts apply a reasonableness test. Ensure any non-compete is limited to a specific industry, a defined territory, and a proportionate duration (typically 6-24 months).

One-Sided Termination Rights

A clause that allows one party to terminate at any time without cause while binding the other party to the full term creates a fundamental imbalance. Balanced contracts provide symmetric termination rights: both parties should have the ability to terminate for convenience (with reasonable notice, typically 30-90 days) or for cause (material breach with a cure period). Watch also for termination provisions that eliminate the right to payment for work already performed.

Vague or Overbroad IP Assignment

An IP clause that assigns 'all intellectual property created during the term of this agreement' without distinguishing between project-specific deliverables and pre-existing IP can strip a service provider of their core business assets. Proper IP provisions should clearly identify: (a) pre-existing IP that remains with its owner; (b) project deliverables that transfer to the client upon full payment; (c) licenses granted for background IP incorporated into deliverables; and (d) residual knowledge rights that allow the provider to use general skills and knowledge gained during the engagement.

Automatic Renewal Traps

Automatic renewal (evergreen) clauses silently extend the contract for successive terms unless one party provides advance notice of non-renewal. The risk: a narrow notice window (e.g., 'written notice of non-renewal must be given no earlier than 90 and no later than 60 days before the renewal date') can lock a party into an unwanted renewal if the deadline is missed by even one day. Review the notice period carefully, calendar the opt-out date, and negotiate broader windows or shorter renewal terms where possible.

Unilateral Modification Clauses

Clauses that permit one party to amend material terms — pricing, scope, service levels, or obligations — without the other party's written consent. In a negotiated commercial contract, amendments should require mutual written agreement. A provision stating 'Company reserves the right to modify these terms at any time' is common in consumer click-wrap agreements but is a significant red flag in B2B contracts where both parties have bargaining power. Such clauses effectively render the contract illusory — if one party can change its obligations at will, the other party's consideration may be undermined. Negotiate for mutual consent requirements or, at minimum, notice-and-opt-out mechanics.

Forum Selection Away from Your Jurisdiction

Forum selection clauses requiring dispute resolution in a distant or inconvenient jurisdiction impose substantial practical burdens: travel costs, retention of local counsel, unfamiliarity with local procedural rules, and the psychological disadvantage of litigating on the opposing party's home turf. US courts enforce forum selection clauses under the standard established in M/S Bremen v. Zapata Off-Shore Co. (1972) unless the clause is unreasonable, was procured by fraud, or enforcement would violate public policy. For a Turkish business owner operating through a US LLC, a clause requiring litigation in a remote US state can be as burdensome as a clause requiring proceedings in Turkey would be for an American counterparty. Where possible, negotiate for a neutral forum or your own jurisdiction. For cross-border contracts, an arbitration clause with a neutral seat — as discussed in the governing law analysis — is often the most equitable solution.

Key Contract Elements

Regardless of contract type, the following five elements appear in virtually every well-drafted commercial agreement. Each one addresses a distinct category of risk and should be tailored to the specific transaction.

Governing Law (Choice of Law)

Specifies which jurisdiction's substantive law governs interpretation and enforcement of the contract. This clause determines everything from how ambiguous terms are construed to what remedies are available for breach.

New York is the dominant choice for commercial contracts. Under NY GOL § 5-1401, parties to a contract worth $250,000 or more may choose New York law regardless of any connection to the state. New York courts have developed extensive commercial jurisprudence, creating predictable outcomes. Delaware law is preferred for entity governance matters, and California law may be relevant when consumer protection statutes or employment law apply. A governing law clause should be distinguished from a forum selection clause: the first determines which law applies, the second determines where disputes are litigated.

Dispute Resolution

Establishes the mechanism for resolving disputes: litigation in a specific court, arbitration before a designated institution, or a tiered process (negotiation, then mediation, then arbitration or litigation). The choice has profound implications for cost, speed, confidentiality, and cross-border enforceability.

For international transactions, an arbitration clause designating a recognized institution (ICC, AAA-ICDR, LCIA) and a neutral seat of arbitration is the standard approach. The arbitration clause should specify: the number of arbitrators (one for smaller disputes, three for complex matters), the language of proceedings, the seat (legal place) of arbitration, and whether the award is final and binding. A well-drafted arbitration clause avoids 'pathological' provisions — those that are internally contradictory, name a non-existent institution, or create ambiguity about whether the parties actually consented to arbitration.

Intellectual Property

Determines ownership and usage rights for work product, pre-existing IP, and derivative works. Under US copyright law (17 U.S.C. § 201), works created by independent contractors generally belong to the contractor — not the hiring party — unless a valid 'work made for hire' agreement exists or the rights are expressly assigned in writing.

This default rule catches many businesses off guard. A properly drafted IP clause should: (a) require written assignment of all project deliverables upon full payment; (b) reserve ownership of pre-existing IP to its creator while granting the client a license to use it as incorporated in deliverables; (c) address moral rights where applicable; and (d) include cooperation obligations for registration and enforcement. For software, additional considerations include source code escrow, open-source license compliance, and API usage rights.

Limitation of Liability

Caps the total amount one party can recover from the other and excludes certain categories of damages. This clause is the primary tool for managing financial exposure in a commercial contract.

A typical structure: (1) a general liability cap equal to fees paid in the preceding 12 months or total contract value; (2) exclusion of indirect, incidental, consequential, and punitive damages; (3) carve-outs from the cap for specific high-risk obligations (confidentiality breaches, IP infringement, indemnification for third-party claims). The enforceability of limitation clauses varies by state — some jurisdictions do not allow limitation for gross negligence or willful misconduct. In consumer contracts, such clauses may face additional scrutiny under state consumer protection laws.

Termination

Defines how the contractual relationship ends — by expiration, mutual agreement, termination for convenience, or termination for cause. The termination clause determines each party's exit rights and the consequences of ending the relationship.

A comprehensive termination clause addresses: (1) termination for cause — what constitutes a material breach and whether the breaching party has a cure period (typically 15-30 days); (2) termination for convenience — either party's right to end the agreement without cause upon advance written notice; (3) effect of termination — what happens to accrued payment obligations, ongoing confidentiality duties, and work in progress; (4) survival — which provisions continue after termination (typically confidentiality, IP ownership, limitation of liability, and dispute resolution). Without clear termination provisions, unwinding a commercial relationship becomes unpredictable and expensive.

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International Contract Enforcement

For parties operating across the US-Turkey corridor, the enforceability of judgments and awards across borders is a critical practical concern. The mechanism chosen for dispute resolution directly determines whether the outcome can be enforced in the counterparty's home jurisdiction.

Enforcing US Court Judgments in Turkey

The United States and Turkey are not parties to a bilateral treaty on mutual recognition of judgments. Turkey also has not ratified the Hague Convention on Choice of Court Agreements (2005). Consequently, enforcement of a US court judgment in Turkey requires a tenfiz (enforcement) proceeding before a Turkish civil court under the International Private and Procedural Law (MÖHUK, Law No. 5718, Articles 50-59). Turkish courts will review: (a) whether the rendering court had jurisdiction under Turkish private international law principles; (b) whether the judgment is final and not contrary to Turkish public order; (c) whether the defendant was properly served and given adequate opportunity to be heard; and (d) reciprocity — whether Turkey's judgments are recognized in the rendering state. Since reciprocity between the US and Turkey is not well established, enforcement of US court judgments in Turkey remains uncertain.

Enforcing Turkish Court Judgments in the US

The US has no federal statute governing recognition of foreign judgments. Each state applies its own framework: most states have adopted either the Uniform Foreign-Country Money Judgments Recognition Act (2005) or its predecessor (1962). Under these statutes, Turkish money judgments can be recognized if: the Turkish court had jurisdiction, the proceedings were fair, and the judgment is final and conclusive. Grounds for non-recognition include lack of due process, lack of personal jurisdiction, and repugnancy to the public policy of the recognizing state. New York, a common forum for international commercial disputes, has a well-developed body of case law on foreign judgment recognition under CPLR Article 53.

Arbitration: The Practical Solution (New York Convention)

Given the uncertainties in cross-border court judgment enforcement, international commercial arbitration provides the most reliable enforcement mechanism for US-Turkey contracts. Both the United States and Turkey are signatories to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Under this convention, arbitral awards rendered in one signatory state must be recognized and enforced by courts in any other signatory state, subject to limited grounds for refusal (Article V). This makes an arbitration clause the single most important provision for parties who need cross-border enforceability. The recommended approach: choose a reputable arbitral institution (ICC, AAA-ICDR, or ISTAC for Turkey-related disputes), designate a neutral seat of arbitration (Geneva, London, or Paris are common neutral choices), and specify the language of proceedings.

When to Get Legal Review

Not every contract requires attorney involvement. The decision to engage legal counsel should be guided by the complexity of the transaction, the amounts at stake, and the relative bargaining power of the parties. The following framework provides a practical guide.

Template May Be Sufficient

  • Standard NDA for preliminary discussions
  • Simple freelance engagement under $5,000
  • Repeat transactions with established counterparties using previously reviewed forms
  • Internal team agreements and standard onboarding documents

Legal Review Advisable

  • Contracts valued at $25,000 or more
  • Agreements involving IP assignment or exclusive licensing
  • Employment agreements with non-compete or equity provisions
  • Contracts drafted by the counterparty (review for adverse terms)
  • Multi-year commitments with automatic renewal

Legal Counsel Essential

  • Cross-border contracts with enforcement considerations
  • Partnership or operating agreements defining ownership structure
  • Contracts with government entities or regulated industries
  • Transactions involving real estate, securities, or M&A
  • Situations where the counterparty has legal representation and you do not

Cost perspective: A basic contract review by a US attorney typically ranges from $500-$2,500 depending on complexity. Custom drafting ranges from $1,500-$10,000+. Compare this against the potential cost of a poorly drafted contract: litigation costs in US federal court average $50,000-$100,000+ for straightforward commercial disputes.

Contract Management After Signature

Signing a contract is not the end of the process — it is the beginning of an ongoing management obligation. Failure to track key dates, amendments, and compliance requirements is a common source of preventable disputes and financial loss.

Amendment Procedures

Most commercial contracts include a 'no oral modification' clause requiring all amendments to be in writing and signed by both parties. Respect this requirement — verbal agreements to change terms may be unenforceable even if both parties acted in accordance with the new understanding. Each amendment should be documented as a numbered addendum that references the original agreement, identifies the specific provisions being modified, and is signed by authorized representatives of both parties. Maintain a version log that tracks all amendments chronologically.

Renewal and Expiration Tracking

Implement a calendar system that flags critical contract dates at least 90 days in advance: renewal opt-out deadlines, notice periods, milestone delivery dates, and payment schedules. For auto-renewing contracts, set alerts well before the non-renewal notice window opens. A missed opt-out deadline on a multi-year contract can result in being locked into unfavorable terms. Maintain a centralized contract register — even a structured spreadsheet — that records each agreement's counterparty, effective date, term, renewal provisions, governing law, and key obligations.

Digital Signatures and Execution

Under the federal ESIGN Act (15 U.S.C. Section 7001 et seq.) and the Uniform Electronic Transactions Act (UETA) adopted by most states, electronic signatures are legally equivalent to handwritten signatures for the vast majority of commercial contracts. Platforms such as DocuSign, HelloSign (now Dropbox Sign), and Adobe Sign produce comprehensive audit trails documenting the identity of each signatory, timestamps, IP addresses, and email confirmations — all of which serve as evidence of execution. Exceptions to e-signature validity include wills, certain trust instruments, specific UCC transactions (negotiable instruments), and court orders. For international transactions involving Turkish counterparts, Turkey's Electronic Signature Law (5070 sayili Kanun) recognizes qualified electronic signatures (nitelikli elektronik imza) as having the same legal effect as handwritten signatures. When using e-signature platforms, ensure that the final executed PDF includes a tamper-evident certificate and that all parties receive a complete copy immediately upon execution.

Record Keeping and Compliance

Retain executed originals (or certified digital copies with valid electronic signatures) of all contracts and amendments for the duration of the agreement plus the applicable statute of limitations period — typically 6 years for written contracts in New York. Store related correspondence, change orders, and performance records alongside the contract. For regulatory compliance (tax, employment, export controls), maintain separate compliance files that can be produced on demand. In the event of a dispute, your ability to produce a complete documentary record — the signed contract, all amendments, relevant communications, and evidence of performance — is often the decisive factor.

Privacy and Data Protection Contracts

Businesses that collect, process, or transfer personal data operate within an increasingly complex regulatory environment. The contractual infrastructure supporting data protection is distinct from general commercial contracts and serves both compliance and risk allocation functions. For the public-facing disclosure document, see our Privacy Policy template; for website terms, see our Terms of Service template.

When You Need a Data Processing Agreement (DPA)

A Data Processing Agreement is a binding contract between a data controller (the entity determining the purposes and means of processing) and a data processor (the entity processing data on the controller's behalf). A DPA is legally required whenever you engage a third party to process personal data — whether a cloud hosting provider, an email marketing platform, a payroll service, or an analytics tool. The DPA must specify: the subject matter and duration of processing, the nature and purpose of processing, the type of personal data and categories of data subjects, the controller's obligations and rights, and the processor's obligations regarding sub-processors, security measures, breach notification timelines, data return or deletion upon termination, and audit rights.

Applicable Regulatory Frameworks

GDPR (EU/EEA)

The General Data Protection Regulation applies to any entity processing personal data of individuals in the EU/EEA, regardless of where the entity is established. Article 28 mandates a written contract (the DPA) between controller and processor. For US-based businesses serving EU customers, GDPR compliance requires DPAs with all processors, a documented lawful basis for each processing activity, privacy-by-design implementation, and appropriate safeguards for international data transfers. Non-compliance penalties can reach EUR 20 million or 4% of global annual turnover, whichever is higher.

CCPA / CPRA (California)

The California Consumer Privacy Act (as amended by the California Privacy Rights Act) requires written 'service provider' or 'contractor' agreements with entities processing personal information on a business's behalf. These agreements must prohibit the service provider from selling or sharing the information, restrict use to the contracted purposes, require the same level of privacy protection as the CCPA provides, and grant the business the right to audit compliance. Similar comprehensive state privacy laws are in effect or pending in Virginia, Colorado, Connecticut, Utah, Iowa, Indiana, Tennessee, Montana, Texas, Oregon, and other states.

KVKK (Turkey)

Turkey's Personal Data Protection Law (Law No. 6698, KVKK) closely follows the GDPR model. KVKK imposes obligations on data controllers and processors, requires explicit or implicit consent depending on the processing category, and restricts international data transfers to countries with adequate protection as determined by the Personal Data Protection Board (KVKK Kurulu) or where the parties provide sufficient safeguards through written commitments approved by the Board. For businesses operating across both the US and Turkey, KVKK and GDPR compliance must be addressed in parallel, with particular attention to cross-border data transfer mechanisms.

Standard Contractual Clauses for International Data Transfers

Standard Contractual Clauses (SCCs) are pre-approved contractual terms adopted by the European Commission providing adequate safeguards for transferring personal data from the EU/EEA to third countries. The current SCCs (adopted June 2021) employ a modular structure covering four scenarios: controller-to-controller, controller-to-processor, processor-to-processor, and processor-to-controller. In addition to executing the SCCs, businesses must conduct a Transfer Impact Assessment evaluating whether the recipient country's legal framework provides protection essentially equivalent to that in the EU. For US-Turkey data flows where EU-origin data is involved, SCCs may need to be supplemented with additional technical and organizational measures. Under KVKK, the Turkish data protection authority may require analogous written commitments for cross-border transfers from Turkey.

Frequently Asked Questions

If your LLC is US-based and the governing law clause designates a US jurisdiction, drafting the contract in English is strongly advisable. US courts will interpret the English text; a Turkish translation appended for convenience does not override the English version unless the contract expressly states otherwise. For cross-border relationships, a bilingual contract with an explicit hierarchy clause (e.g., 'In the event of conflict, the English version shall prevail') provides clarity to both sides while ensuring legal certainty.
A governing law clause (also called 'choice of law') specifies which jurisdiction's substantive law will interpret and govern the contract. Without this clause, courts apply conflict-of-laws rules that can lead to unpredictable results. For US-based businesses, New York law is commonly selected due to its extensive body of commercial case law and the statutory provision under NY General Obligations Law Section 5-1401, which allows parties to choose New York law for contracts valued at $250,000 or more regardless of any connection to New York. Delaware law is another frequent choice, particularly for entity-related agreements.
Each mechanism has distinct advantages. Arbitration is generally faster, confidential, and — critically for international parties — produces awards enforceable in over 170 countries under the New York Convention (1958). However, arbitration can be expensive (institutional fees, arbitrator compensation) and typically offers limited appeal rights. Court litigation provides formal procedural protections, appeal mechanisms, and public precedent, but may be slower and involves enforceability challenges across borders. For purely domestic US disputes, court litigation is often sufficient. For cross-border contracts involving Turkish and US parties, arbitration through a recognized institution (ICC, AAA-ICDR, ISTAC) is generally the more practical choice.
US contract formation requires four core elements: (1) offer and acceptance — a clear proposal and unequivocal agreement to its terms; (2) consideration — a bargained-for exchange of value (a promise for a promise, or a promise for performance); (3) capacity — parties must be of legal age and sound mind; and (4) legality — the contract's purpose must not violate law or public policy. Additionally, the Statute of Frauds (applicable in all US states) requires certain contracts to be in writing: real estate transactions, agreements that cannot be performed within one year, guarantees of another's debt, and contracts for the sale of goods over $500 under the UCC. Even where not legally required, written contracts are strongly preferred as evidence.
Yes. Under the federal ESIGN Act (2000) and the Uniform Electronic Transactions Act (UETA) adopted by most states, electronic signatures carry the same legal weight as handwritten signatures for most commercial contracts. Exceptions include wills, family law documents, court orders, and certain UCC transactions. For international contracts, the validity of electronic signatures also depends on the law of the counterparty's jurisdiction. Turkey recognizes electronic signatures under the Electronic Signature Law (5070 sayılı Kanun), with qualified electronic signatures (nitelikli elektronik imza) having the same evidentiary value as wet signatures. Platforms such as DocuSign and Adobe Sign are widely accepted in US commercial practice.
Bilingual contracts are common in cross-border practice and are perfectly valid. The critical issue is including a 'language priority' or 'controlling language' clause that specifies which version prevails in case of discrepancy. Without such a clause, courts must determine the authoritative text — an expensive and unpredictable exercise. Standard practice: draft the operative version in the language of the governing law jurisdiction (English for US law), provide a certified translation in the other language, and include an express clause stating which version controls. If the contract is governed by Turkish law, the Turkish text should be the controlling version.
US contract law provides several remedies for breach: (1) Compensatory damages — monetary recovery for actual losses caused by the breach; (2) Consequential damages — indirect losses that were foreseeable at the time of contracting (e.g., lost profits), subject to the Hadley v. Baxendale foreseeability test; (3) Liquidated damages — a pre-agreed sum specified in the contract, enforceable if the amount is a reasonable estimate of anticipated harm and not a penalty; (4) Specific performance — a court order compelling the breaching party to perform, available when monetary damages are inadequate (common in real property and unique goods); (5) Rescission — cancellation of the contract, restoring parties to their pre-contract positions. The non-breaching party has a duty to mitigate damages. Punitive damages are generally not available in contract actions.
Statutes of limitations for contract claims vary by state and contract type. For written contracts: New York allows 6 years (CPLR 213), California allows 4 years (CCP 337), and Delaware allows 3 years from accrual for most claims. For oral contracts, periods are generally shorter (e.g., 3 years in New York). Under the UCC, the limitation period for sale-of-goods claims is 4 years, which parties can contractually reduce to no less than 1 year. The limitation period typically begins when the breach occurs, not when it is discovered — although some states apply a 'discovery rule' for certain claims. Contractual limitation clauses that shorten the statute of limitations are enforceable in most states if reasonable.
Verbal contracts are generally enforceable under US law, provided the standard elements of contract formation are present (offer, acceptance, consideration, capacity, legality). However, the Statute of Frauds requires certain categories of contracts to be in writing to be enforceable: real property transactions, agreements that cannot be performed within one year from their making, promises to pay another person's debt (suretyship), contracts for the sale of goods priced at $500 or more under UCC Section 2-201, and prenuptial agreements. Even for contracts not covered by the Statute of Frauds, the practical challenge of proving the terms of an oral agreement in court makes written contracts strongly preferable. Absent a writing, disputes reduce to competing testimonies about what was agreed.
Liquidated damages are a pre-determined sum specified in the contract that becomes payable upon a particular breach. US courts enforce liquidated damages clauses when two conditions are satisfied: (1) actual damages arising from the breach would be difficult to calculate at the time of contracting, and (2) the stipulated amount represents a reasonable estimate of the anticipated or actual harm — not a penalty designed to punish the breaching party. If a court determines that the amount is grossly disproportionate to any conceivable loss, it will strike the clause as an unenforceable penalty. The reasonableness analysis may be applied at the time of contracting (majority rule) or at the time of breach (minority rule), depending on the jurisdiction. Liquidated damages provisions are common in construction contracts, software development agreements, and service-level agreements where delay or non-performance causes quantifiable but hard-to-prove harm.

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Cite This Entry

Standard

EchoLegal, “Business Contracts in the US,” EchoLegal Legal Encyclopedia, v1.0 (last updated Jan 25, 2026), https://echo-legal.com/en/amerika/abdde-is-yapanlar-icin-sozlesmeler.

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Business Contracts in the US, EchoLegal Legal Encyclopedia (last updated Jan 25, 2026), https://echo-legal.com/en/amerika/abdde-is-yapanlar-icin-sozlesmeler.

Citation ID:ecl-gde-00003

This content is for general informational purposes only and does not constitute legal advice. Contract templates should be reviewed by a qualified attorney and customized for your specific situation and jurisdiction.