CHECKS FROM NEGOTIABLE INSTRUMENTS

A check is one of the most important types of negotiable instruments under the Turkish Commercial Code. It is a means of payment. A check contains a payment order.

It involves a three-way relationship:

• Drawer (Issuer): The person who issues the check and gives the bank the payment instruction.

• Drawee (Bank): The bank branch where the check is presented and which will process the payment.

• Payee (Creditor): The person whose name is written on the check or who holds the check and will collect the payment.

Formal Requirements for the Check:

For a document to legally qualify as a "check," it must meet the mandatory formal requirements stipulated in Article 780 of the Turkish Commercial Code. The absence of any one of these requirements will render the document invalid as a check.

1. Mandatory Formal Requirements

• The word "check": The word "check" must appear in the text of the promissory note. If the note is written in a language other than Turkish, the equivalent of "check" in that language must be included.

• A wire transfer for the unconditional payment of a specific amount: A check is a "payment instruction" to the drawee bank, and this instruction cannot be subject to any conditions.

• Payer's (Drawer's) Trade Name: The party paying the check can only be a bank. Therefore, the bank's name must be written in the drawee section.

• Place of Payment: The place of payment must be indicated on the check. If not indicated, the place shown next to the name of the drawee (bank) is considered the place of payment.

• Date and Place of Issuance: The date and place of issuance of the check must be clearly stated. The date of issuance is important for calculating presentation periods. If the place of issuance is not indicated, the place written next to the drawer's name will be considered the place of issuance.

• Drawer's Signature: The check must bear the wet signature of the drawer (or, if a legal entity, the signature of its authorized representative). The signature must be handwritten; electronic signatures are not valid.

• Serial number and QR code provided by the bank

Note: Checks are payable on demand; therefore, there is no due date on a check.

Presentation of the Check:

A check is, as a rule, presented to the bank for payment. If the date written on the check differs from the date of issue, the date written on the check shall be considered. The signature on the check must be handwritten by the drawer. Fingerprints or seals are not valid signatures. Even if a clause stating that no interest is required is written on the check, it is invalid. When the check is presented to the bank, the drawer must have sufficient funds in their account. If there are insufficient funds, the bank fulfills its own responsibility and signs the back of the check stating that it is unpaid, indicating the amount of payment made and adding the date. There is no maturity date or acceptance date on the check. If the person signing the check as a company representative is unauthorized or has exceeded their authority, this does not affect the validity of the check, but the drawer's personal liability arises.

Public Trust in Checks

The trust of a bona fide third party who acquires the check relying on the writing and signatures on it is protected.

Endorsement and Transfer of Checks

A check is legally valid. The process of transferring a check endorsement . The person who endorses the check is called the endorser, and the person in whose favor the check is endorsed the payee .

• Full Endorsement: This type of endorsement involves the endorser writing the name of the person to whom the check is to be transferred and the words "payable" before signing.

• Blank Endorsement: This is an endorsement where the endorser signs only the back of the check without specifying any name. After a blank endorsement, the check can be transferred like a "bearer" check.

If an endorsement is made without a date, it is deemed to have been made before the expiration of the period set for organizing a protest.

An endorsement made by the drawee is void. Endorsements made in favor of the drawee are considered receipts, and if the bank has multiple branches and the endorsement is made to one of these branches, then the endorsement is valid.

Checks can only be endorsed as a base or allocation; endorsements for collateral are invalid.

Collection of Checks

Checks have no maturity date, therefore they are payable on demand. If a check is presented to a bank or clearinghouse before the date shown as the issue date, it will be payable on the date of presentation.

Check Presentation Period

The processing time is "10 days" if the place of issuance and the place of payment are in the same city, "1 month" if they are in different cities, and "3 months" if they are on different continents.

Presentation of the check within the prescribed period

If a check is presented within the specified presentation period and remains unpaid or if there are insufficient funds;

B) Non-payment

I – Rights of recourse of the holder

ARTICLE 808– (1) If a check presented on time is not paid and

non-payment situation;

a) An official document, with a "protest",

(b) Written on the check by the drawee, indicating the date of presentation

with a statement dated [date],

c) A clearinghouse detecting that a check was not paid despite being delivered on time

with a statement dated [date],

If the check is found to be fixed, the holder is liable to the endorsers, the drawer and other debtors of the check

They can exercise their right to apply.

II – Protest

ARTICLE 809– (1) The protest or equivalent determination must be made before the expiry of the submission period.

(2) If the submission is made on the last day of the period, the protest or equivalent determination may be made on the following business day.

III – Scope of the right to apply

ARTICLE 810– (1) The holder may apply by way of application;

a) The unpaid amount of the check,

b) Interest on this amount from the date of presentation,

c) Protests or equivalent determinations and notices sent

expenses and other expenses and

d) A commission fee not exceeding three per thousand of the check amount,

He/She may want to.

Failure to Present the Check Within the Prescription Period

If a check is not presented to the drawee within the presentation period, the drawer may revoke the check. If the drawer has not revoked the check, payment may still be made after the payment period has expired. However, after the presentation period has passed, there is no obligation to pay the drawee (creditor). If the creditor fails to present the check within the specified period, they lose their right of recourse against the endorsers and the drawer.

Statute of Limitations on Checks

According to the Turkish Commercial Code, lawsuits and enforcement proceedings initiated by the holder against endorsers, the drawer, and other debtors of three years from the expiry of the presentation period .

The Importance of a Lawyer in Checks

A lawyer will examine whether the document you have is a legally valid check. The lawyer carefully calculates the presentation and statute of limitations periods for the check. In cases of bounced checks, they initiate legal and criminal proceedings. They prevent financial losses and protect the legal system from criminal penalties.