Sector Report

Contract Risks in the Energy Market: Legal Pitfalls in Bilateral Trade and Capacity Agreements

An in-depth risk analysis of common liability limit errors, force majeure gaps and inadequate termination conditions in bilateral trading contracts under EMRA regulations. Contract portfolio management recommendations for energy companies.

Özge Batur
Özge Batur · 13 min
Contract Risks in the Energy Market: Legal Pitfalls in Bilateral Trade and Capacity Agreements

Turkey's energy market has undergone rapid regulatory evolution, yet the contract frameworks used by many market participants have not kept pace. The mismatch between regulatory reality and contractual architecture is generating disputes at an increasing rate.

Liability Limit Errors: A Systemic Problem

The most common drafting deficiency in energy sector contract reviews is an inadequately calibrated liability cap. Standard boilerplate caps set at contract value bear no relationship to actual loss exposure in energy trading, where a single curtailment event can generate claims that dwarf the contract price.

Force Majeure: The Gaps That Matter

Energy contracts face force majeure scenarios categorically different from general commercial agreements: grid instability, regulatory curtailment orders, fuel supply interruptions. Generic force majeure clauses copied from non-energy templates routinely fail to address these scenarios.

Portfolio-Level Risk Management

Individual contract review is necessary but not sufficient. Energy companies with multiple bilateral agreements need to assess their portfolio at an aggregate level — identifying correlated risks and concentration exposures invisible when contracts are reviewed in isolation. Cebeci Finans provides specialist contract risk analysis for energy market participants.

Category: enerji