Erdal Nuhbasa – Law and Consulting Firm – Legal Services
ERDAL NUHBASA
LAW AND CONSULTING FIRM
Erdal Nuhbasa – Law and Consulting Firm – Legal Services
ERDAL NUHBASA
LAW AND CONSULTING FIRM
In Turkish law, promissory notes, known as “senet” or “bono,” are commonly used financial instruments that serve as a written promise to pay a specified amount of money to a designated party by a certain date. Properly preparing a promissory note is essential to ensure its validity and enforceability under Turkish law.
While senet and bono are often used interchangeably in everyday language, legally they refer to promissory notes or bills of exchange with slightly differing applications under Turkish law. Their prevalence in Turkish commerce highlights their importance as tools for credit and payment, allowing businesses and individuals to secure transactions and manage credit arrangements.
Under the Turkish Commercial Code (TCC) and Turkish Code of Obligations, senet (also referred to as a promissory note) is a legally binding promise by which the issuer, or debtor, guarantees payment to the specified payee or bearer on or before the due date. This promise is unconditional and cannot be revoked, making it an enforceable debt instrument. Meanwhile, bono is typically used to refer to a more formal or official promissory note or bill of exchange, carrying similar legal characteristics but often intended for higher-value transactions or formal credit arrangements. Both types require strict adherence to certain formalities to be enforceable, including clear terms of payment, identification of the parties, and specific issuance details.
For a senet or bono to be valid and enforceable in Turkey, it must meet several essential requirements as defined by Turkish law. These include;
Additionally, the note must specify the payment date and be signed by the issuer to establish its authenticity.
These formal requirements ensure that senet and bono are recognized as legal debt instruments, enabling holders to pursue enforcement and collection if the debtor defaults on payment. Below is a guide on how to fill out a promissory note in compliance with Turkish law, covering the essential elements, format, and legal considerations.
To be legally binding, a promissory note in Turkey must include specific elements as required under Turkish Commercial Code No. 6102 and the Turkish Code of Obligations No. 6098. Missing any of these elements may result in the note being deemed invalid or unenforceable. The required elements are as follows:
Title of the Document: The term “Bono” or “Senet” must appear at the top of the document to clearly indicate that it is a promissory note.
Unconditional Payment Promise: A clear and unconditional promise to pay the specified amount to the bearer or to the designated payee.
Specified Amount: The exact amount payable must be stated clearly in both numbers and words to avoid any confusion or disputes.
Payee’s Name: The name of the person or entity to whom the payment is promised. If the note is “to the bearer,” this should also be explicitly stated.
Payment Date: The due date for payment. This can be a specific date, a determinable future date, or a time period after the issuance of the note.
Issuer’s Information: The full name, ID number (T.C. kimlik numarası for individuals), and contact information of the person or entity issuing the promissory note.
Issuer’s Signature: A signature from the issuer. For companies, an authorized representative’s signature is required. If there are multiple issuers, each must sign.
Although not mandatory, adding the following elements can enhance the clarity and enforceability of the note:
When you hold a promissory note (senet) in Turkey, you have several legal rights aimed at securing the debt owed to you. Turkish law recognizes the senet as a negotiable instrument, providing holders with specific protections and remedies in case of non-payment.
Here’s an overview of your primary rights and the legal actions you can take as a senet holder:
If the promissory note includes an interest rate, you are entitled to collect interest on the principal amount, calculated as per the terms of the note. In case of delayed payment, you may also be able to claim default interest, subject to legal limits set by Turkish law.
Promissory notes are transferable, allowing you to endorse the note to another person or entity. This third party then holds the same rights and protections you initially held. In Turkey, endorsement is often done by signing the back of the note.
If the issuer fails to pay the amount due, you have the right to pursue legal action for enforcement. Turkish law provides two main routes for enforcement:
I. Execution Proceedings: You can file for an enforcement process through the local Enforcement Office (İcra Dairesi) without necessarily going to court. If the debtor does not object, this process can lead to asset seizure and auction to recover the owed amount.
II. Litigation: If the debtor disputes the claim, you may file a lawsuit in a commercial court. In such cases, the court will review the validity and terms of the promissory note before rendering a judgment.
If the promissory note has guarantors or endorsers, you have the right to demand payment from these parties if the primary issuer fails to pay. Turkish law considers these parties liable to the holder in case of default, provided that their signatures appear on the note as guarantors or endorsers.
If the debtor files for bankruptcy, a senet holder generally has a priority right to claim payment compared to ordinary creditors, as the promissory note is treated as a debt instrument. You can submit your promissory note as proof of debt in the bankruptcy proceedings and may receive payment from the debtor’s estate, subject to certain legal procedures.
Without a Prior Demand Turkish law allows promissory note holders to initiate legal proceedings for collection without needing to send a prior demand for payment. The promissory note itself serves as a written acknowledgment of debt, making it a self-sufficient instrument for legal enforcement.
A promissory note (senet) can also be used as collateral to secure other debts or obligations. By transferring the note with the endorsement, you can assign it to another party as a form of security.
If the promissory note’s non-payment causes you financial loss beyond the owed amount and interest, you may have the right to claim additional damages through legal action. This is more complex and generally requires demonstrating the extent of the damages caused by the debtor’s default.
In Turkey, imprisonment is not only imposed for unpaid promissory notes (debts). Imprisonment is mainly applicable in cases where an element of a criminal offense has been established or a malicious act, such as fraud, has been detected.
In a debt relationship, non-payment of a promissory note is not directly punishable by imprisonment; enforcement and seizure proceedings are carried out against the debtor’s assets.
To sum up briefly, In Turkey, non-payment of a promissory note is handled through civil enforcement, not criminal punishment. Imprisonment is reserved for cases involving fraud, deceit, or contempt of court in debt-related matters.
For unpaid promissory notes, there are various legal sanctions that the creditor may apply instead of imprisonment:
a. Initiation of Enforcement Proceedings: When the promissory note is not paid, the creditor may initiate enforcement proceedings and request the attachment of the debtor’s assets through the Enforcement and Bankruptcy Office (İcra ve İflas Dairesi). In this process, a payment order is sent to the debtor.
b. Seizure of Assets (Foreclosure Procedures): If the debt is not paid despite the payment order, the debtor’s movable or immovable property, bank accounts and income may be seized upon the request of the creditor.
c. Foreclosure and Sale: The debtor’s goods are seized and these goods are put up for sale through execution and the creditor’s debt is collected.
While in Turkey only non-payment of promissory note debt is not punishable by imprisonment, imprisonment may be imposed in the following special cases
In my article I have given you all the information on how to fill in a promissory note. However, if you are still not sure which parts of such an important document to fill in, you can take a look at the picture below. In this sample promissory note form, I have marked the places that need to be filled in blue.
Under normal circumstances, you can take an A4 sheet of paper and create a promissory note by writing the mandatory sections listed above yourself. However, since the promissory notes that are usually sold in stationery stores in Turkey and whose images I have given above are used, I wanted to give examples on these documents.
This is an example of a promissory note where one person is the debtor and one person is the creditor. However, if the number of debtors is more than one, or if the debtor is a person representing both a real person and a legal entity, or if there is a guarantor on the promissory note, etc., there will be changes. So pay attention to these differences and contact me if you have any questions.
It is very normal for people who trade to use not only cash but also payment instruments such as checks or promissory notes. In order for someone to give you a check or promissory note, or for you to issue a check or promissory note to a person or company, it is important to know the elements that must be included in this document. If any of the mandatory elements listed above are missing, this valuable paper will not be a check or promissory note. This will cause your receivable to become difficult.
With a promissory note, you can initiate enforcement proceedings quickly and easily. If you have a promissory note, you do not have to deal with the cause of the debt, because promissory notes are independent of the cause. In addition to this; A promissory note is legally recognized as a document that is conclusive evidence.
The promissory note gives the creditor the right to initiate direct enforcement proceedings if the debtor fails to pay the debt. The creditor can apply to the Enforcement Office with the promissory note and issue a demand for payment. The promissory note can be directly subject to enforcement proceedings without a court order, which speeds up the proceedings and facilitates the collection process. Thus, the creditor can quickly protect its rights and collect the debt without going through lengthy litigation processes.
In general, I have given you information about how a promissory note should be drafted in Turkey and the possibilities of legalization. However, of course, the content of the promissory note and the issues to be considered may vary according to each case, so it would be best for you to fill out your promissory notes with the help of your lawyer.
