Author: Duygu Oner
Scope of Application
Conditions for Default without Notice
Default in Cases where the Payment Date or Term is Determined
In cases where the payment period is explicitly agreed to in parties' agreement, the lawmaker stipulates, in accordance with the purpose of protecting the creditor, a maximum limitation period regarding the payment date specified in the contract. As per Article 1530 /5 of the TCC, the payment period shall be a maximum of sixty days as from the receipt of the invoice, or an equivalent payment request or procurement of goods or services, or upon the completion of the review and acceptance procedure. In this scope, the performance period of the pecuniary debt is limited to sixty days in contracts concluded between two commercial enterprises, for the procurement of goods and services. On the other hand, an exception to the sixty days' maximum period is stipulated in the related provision. Accordingly, the parties may stipulate a payment period greater than sixty days, provided that they agree on this issue, explicitly, and it does not constitute a grossly unfair situation. Nevertheless, in the event that the creditor is in the position of supplier, and is an SME or agricultural or animal producer, or if the debtor is a large-scale enterprise, the payment period shall not exceed sixty days under any circumstances. If the parties stipulate a provision regarding the payment period in their contract that contradicts the regulations in this article, these provisions shall be rendered invalid.
Default in Cases where the Payment Date or the Payment Period is not stipulated
In cases where the date of receipt of the invoice, or the equivalent payment request is unclear, the thirty day period shall commence upon the procurement of the goods or services by the debtor. On the other hand, it is stipulated that if the invoice is received by the debtor before the procurement of the goods and services, the thirty day period shall commence with the delivery of the goods or services to the debtor.
Another possibility that is stipulated under Article 1530 of the TCC, with regard to the commencement of the thirty day period, is where a procedure is foreseen under the law for the acceptance and the review of the goods. According to the related provision, in the event that the debtor receives the invoice, or the equivalent payment request on the date of acceptance or review, or before this date, the debtor shall be in default at the end of the thirty day period that follows the date of occurrence of the acceptance or review. In the said provision, the period that will be stipulated in the contract by the parties, in relation to the acceptation and review is limited, as well. In this scope, the acceptance and review period shall be a maximum of thirty days in the event that a review or acceptance procedure is stipulated in the contract. If a period that is greater than thirty days is prescribed for the review in the contract, the issue as to whether this period constitutes unfairness to the detriment of the creditor shall be taken into account. If the parties agree on a period for the review that is more than thirty days, it is required that this period shall not constitute a grossly unfair situation for the creditor. Otherwise, the period for the review shall be deemed to be thirty days, even if it is stipulated as a longer period in the contract.
That being said, it is accepted that the thirty days stipulated, above, regarding the default of the debtor, shall not be evaluated as a required minimum waiting period from the default of the debtor. According to the view that is accepted in the doctrine, after the debt becomes due, the creditor should be able to push the debtor into default without waiting for the thirty days to expire from the receipt of the invoice by the debtor, on the condition that a notice in default is sent. Indeed, granting the debtor an obligatory thirty day period for payment, although the debt is due, contradicts the purpose of the protection of the creditor3.
The Conditions under which to request Default Interest
In the event that the interest rate has not been stipulated in the contract by the parties, or that it is deemed invalid, pursuant to the Article 1530/7 of the TCC, the applicable interest rate is determined in accordance with the announcement of the Central Bank of the Republic of Turkey, each January, and the interest rate shall be at least 8% higher than the late payment interest rate for commercial transactions that is stated in the Code on Legal Interest and Default Interest numbered 3095.
As for the role of fault in claiming interest, the wording of Article 1530/2 of the TCC provides that the debtor who fails to pay its debts in time goes into default "except for the cases where he cannot be held liable." The wording of this provision allows for interpretation such that the debtor shall be at fault in order to be in default and, subsequently, shall pay default interest. However, such interpretation contradicts the provisions of the TCO, which stipulates that fault is not required for the default of the debtor, and with the purpose of protecting small and medium-sized entities against late payments stipulated in Article 1530 of the TCC. Therefore, it is argued in the doctrine that this provision should not be interpreted in such a way that it discharges the debtor from making interest payments in cases the debtor is not at fault to be in default. In this respect, it should be accepted that the creditor may claim default interest stipulated in the Code numbered 3095 even if the debtor is not at fault in delaying the performance of his obligations.
1 Preamble of Article 1530 of the TCC numbered 6102.
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