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Aircraft Procurement Contracts

October 3, 2025
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Entrance

The aviation sector is a field where billions of dollars of investment and trade take place globally, and it is also of critical importance to the international prestige and strategic security of states. The transfer of ownership and financing of aircraft (planes, helicopters, unmanned aerial vehicles, etc.) is not seen merely as a commercial sales transaction; rather, it is shaped in an area where international law, national security, commercial law, and civil aviation regulations intersect.

Therefore, aircraft purchase contracts differ from classic movable property sales contracts. They are a multi-layered legal transaction that must be prepared not only according to the Turkish Code of Obligations, but also the Turkish Civil Aviation Law, the Civil Code, the Turkish Commercial Code, the Financial Leasing Law, and international agreements .

I. Legal Status of Aircraft

1. Is it movable property?

According to the Civil Code, aircraft are movable property; however, their subjection to a special registry . The registration system ensures the security of ownership transfers and real rights.

2. Registration Requirement

According to the Civil Aviation Law No. 2920 , every aircraft used in Turkey or registered under Turkish registration must be registered in the Turkish Civil Aircraft Registry maintained by the Ministry of Transport and Infrastructure . This registration is binding on third parties.

II. Legal Basis of the Aircraft Procurement Contract

  1. Turkish Code of Obligations, Articles 207 et seq. – Provisions regarding sales contracts.

  2. Turkish Commercial Code, Articles 931 et seq. – Provisions regarding commercial sales.

  3. Law No. 2920, Articles 57-68 – Registration, transfer of ownership, mortgage and pledge.

  4. Cape Town Convention – International aircraft financing and registry.

  5. Law No. 3226 on Financial Leasing – Acquisition through leasing.

III. Contract Preparation Process

Aircraft purchase agreements cannot be drawn up quickly like ordinary sales contracts. This process, in which the parties undertake significant financial responsibilities and international obligations, a multi-stage process.

1. Preliminary Meetings and Letter of Intent

  • The parties usually first sign a Letter of Intent (LOI ) .

  • Here you will find basic parameters such as price range, payment plan, and delivery date.

  • It may not be legally binding, but it builds business trust.

2. Preliminary Investigation (Due Diligence)

  • The aircraft's registration status, previous owners, and whether there are any mortgages or liens on it are checked.

  • Airworthiness certificates, maintenance records, and insurance documents are reviewed.

  • If financial institutions are involved, banks also request this review.

3. Drafting the Agreement

The following key points are considered when drafting a contract:

  • The parties (buyer – seller, together with their legal entities)

  • Subject (aircraft type, model year, serial number, registration number)

  • Sale price and payment terms

  • Delivery method (place, time, delivery documents)

  • Warranty and liability provisions for defects

  • Insurance liabilities

  • Registration procedures

  • Dispute resolution method (Turkish courts or arbitration)

4. Formal Requirement

  • Although sales contracts are not subject to any specific form according to the Law of Obligations, written form is mandatory for aircraft .

  • In addition, registration with the Civil Aviation Registry is required for the transfer of ownership to be completed .

IV. Essential Elements of the Agreement

  1. Identity Information of the Parties

    • For natural persons, Turkish National Identity Number (TCKN), address

    • Trade registry registration for legal entities

  2. Sale Price

    • It can be in Turkish Lira or foreign currency.

    • A payment plan, advance payment, or bank guarantee letter can be arranged.

  3. Aircraft Description

    • Brand, model, serial number

    • Registration number

    • Airworthiness certificate

  4. Delivery Terms

    • Delivered in the hangar

    • Flight delivery at the airport

    • Submitted along with the documents

  5. Liability for Defects

    • According to Articles 219 et seq. of the Turkish Code of Obligations, the seller's liability

    • Additional regulations for hidden defects

  6. Taxes and Fees

    • VAT, stamp duty, and registration fees are the responsibility of the buyer.

V. Financing and Leasing

Aircraft are often financial leasing .

  • The leasing company buys the vehicle and leases it to the buyer on a long-term basis.

  • The transfer of ownership will take place at the end of the contract.

  • In Turkish law, the Financial Leasing Law No. 3226 applies.

  • Leasing transactions must also be registered.

VI. International Dimension

Thanks to the Cape Town Convention, to which Turkey is a party :

  • International registry records are secured.

  • Foreign banks are more comfortable providing loans when it comes to financing.

  • Speedy dispute resolution is possible through arbitration.

VII. Problems Encountered in Practice

  1. Bureaucratic Registration Process

  2. High Fees and Taxes

  3. Defective Delivery and Hidden Defects

  4. Funding Challenges

  5. Insurance and maintenance obligations

VIII. Supreme Court Decisions

  • 11. HD: Sales without registration are invalid against third parties.

  • 19. HD: The seller's liability is significant in case of defective delivery.

  • 15. HD: In leasing agreements, ownership remains with the lessor.

IX. Sample Contract Clauses

Article 1 – Subject

The seller agrees to sell the aircraft specified below to the buyer, and the buyer agrees to purchase it.

Article 2 – Price

The sale price is … USD and will be paid via bank transfer on … date.

Article 3 – Delivery

The aircraft will be delivered at … Airport along with its airworthiness certificate.

Article 4 – Liability for Defects

The seller will be liable for hidden defects for a period of one year from the delivery date.

Conclusion

Aircraft purchase agreements are subject to specific regulations in terms of both form and content . A written contract and registration are required for validity , and the obligations and responsibilities of the parties are governed by the Turkish Code of Obligations. Due to high costs and risks, most transactions are conducted through financial leasing and credit mechanisms , with the Cape Town Convention providing international security.

Therefore, in practice, lawyers should recommend the following steps to their clients:

  1. A due diligence review should be conducted

  2. The letter of intent should define the business framework

  3. A detailed contract should be prepared

  4. Registration must be done without delay

  5. Arbitration and court proceedings should be provided for in case of disputes.

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