Sham transaction (simulation)

Under Turkish law, simulation (muvazaa) occurs when parties create a transaction for appearance only, with the aim of misleading third parties. They may pretend to conclude a transaction they never intended (absolute simulation) or disguise their real transaction behind a different one (relative simulation), such as presenting a gift as a sale.

Typical examples include sham sales made to shield assets from creditors and transfers designed to deprive heirs of their inheritance. The apparent transaction is invalid because it does not reflect the parties' true intent; the hidden transaction survives only if it meets its own validity requirements.

A simulation claim is not subject to prescription. The parties to the transaction must generally prove their allegation with written evidence, whereas third parties may rely on any type of evidence.