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According to Turkish Law, promissory note is regulated under Article 776-779 of the Turkish Commercial Code (“TCC”). There are two main persons on a promissory note. These are the drawer who undertakes to pay and the payee who is entitled to the payment. With the promissory note, the drawer promises to pay to the payee or to his order the amount stated on the instrument. According to the TCC a promissory note is subject to strict form requirements for the same to be a valid instrument.

A promissory note must include the following elements:

1-The term “bono” or “emre yazılı senet” in the text of the instrument; or if it is written in a foreign language an equivalent of this word in that language (in English “promissory note
2-Unconditional undertaking to pay a certain amount of money which is stated in the promissory note;
3- The name and family name of the person to whom or to whose order payment is to be made; if a corporate entity, full corporate title;
4-Place of payment;
5-Maturity date;
6-The signature of the drawer;
7-The place and date of issue.

Certain content of a promissory note is statutory while some are deemed as optional contents of a promissory note as follows:

- Statutory content;

1- The term “bono” or “emre yazılı senet” in the text of the instrument; or if it is written in a foreign language an equivalent of this word in that language (in English “promissory note”)
2- Unconditional undertaking to pay a certain amount of money which is stated in the promissory note;
3-The name and family name of the person to whom or to whose order payment is to be made; if a corporate entity, full corporate title;
4- The issuance date; and
5- The signature of the drawer.

Optional content of a promissory note can be listed as follows:

1- As per article 777 of TCC if the place of issuance is not indicated on the promissory note, then the promissory note is deemed to be issued at the place written next to the name of the issue;
2- In accordance with article 777 of TCC if it is not clear on the promissory note, then the place that the promissory note was drawn up will be deemed as the place of payment and the residential address of the issuer;
3- The non-existence of a due date does not invalidate the promissory note. If the promissory note does not include a maturity date, the same has to be paid upon its presentment to the drawer. However, the promissory note, which needs to be paid at sight, shall be presented to the drawer within one year after its issuance. In case the promissory note which is to be paid at sight is not paid upon presentment, a protest for non-payment shall be issued by the holder of the said promissory note.

If the above referred statutory elements of a promissory note are not indicated on the content of the promissory note, then such promissory note shall be deemed invalid and shall not be considered as a negotiable instrument.

by Erdal Law Firm

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