Problems Arising from Post-Dated Checks in Practice

Entrance

In commercial law and the negotiable instruments system, checks are one of the most important instruments for trust and speed. Checks are regulated as a means of payment in the Turkish Commercial Code (TTK) . Despite this, they are commonly used as a deferred payment instrument in commercial life and are referred to as "post-dated checks." This practice leads to many legal and practical problems because it does not align with the legal nature of checks.

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Legal Nature of Checks

A check is a negotiable instrument in the nature of an order, issued in accordance with Articles 780 et seq. of the Turkish Commercial Code . The legislator has emphasized that a check is a means of payment and has not intended for its use as a term credit or financing instrument.

Article 707 of the Turkish Commercial Code , "A check is payable on demand."
Therefore, even if a future date is written on the check, the bank is obliged to make the payment when the holder presents the check.

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Reasons for Using Post-Dated Checks

Although not legally permissible, issuing post-dated checks is common in commercial practice. The reasons for this are as follows:

• Securing forward sales between merchants ,
• The desire to use checks as a form of credit due to the high cost of bank loans .
• The desire to strengthen trust in the market,
• The parties expect easy collection of debts.

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Legal Validity of Post-Dated Checks

• According to the Turkish Commercial Code, a post-dated check legally retains its status as a check.
• The holder may present the check even before the date written on it.
• The bank is obligated to pay if there is a balance on the check.

Therefore, in the case of post-dated checks, the parties' expectations regarding the due date may not always be met.

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Problems Encountered in Practice

1. Presentation Period Issue

Since a check is a negotiable instrument payable on demand, presentation of a post-dated check before the date written on it can lead to a dispute between the parties.

• If payment is made upon presentation by the holder, the drawer may be obliged to make payment before the due date.
• This situation leads to a loss of trust among traders.

2. Risk of Bounced Checks

With post-dated checks, the drawer plans to have sufficient funds in their account until the payment date. However, premature presentation can lead to a bounced check problem, which can result in severe penalties such as a ban on opening a checking account

3. The Issue of Criminal Liability

According to the Check Law No. 5941 , those who issue bounced checks are subject to criminal penalties. In the case of post-dated checks, if the check is presented early and bounces, the drawer may face criminal penalties.

4. Damage to Commercial Reputation

A post-dated check that bounces due to early presentation damages the issuer's reputation in the market. This creates serious problems in trust-based commercial relationships.

5. Uncertainty in Enforcement Proceedings

When the holder initiates enforcement proceedings to collect the amount of a check , the date on which a post-dated check becomes due and payable may be disputed. Supreme Court rulings have indicated that the assessment should be based on the presentation date.

6. Interest and Compensation Claims

If a post-dated check is presented early, the drawer may be subject to claims for interest and damages. This creates a dispute that goes beyond the primary function of a check.

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Supreme Court Case Law

The Supreme Court has issued numerous landmark decisions regarding post-dated checks:

• The 11th Civil Chamber of the Supreme Court of Appeals, Case No. 2016/4321 E., Decision No. 2017/5892 K.,
  ruled: “A check is valid even if it has a future date, once presented. The bank is obligated to pay.”
• The 19th Criminal Chamber of the Supreme Court of Appeals, Case No. 2018/11234, Decision No. 2019/2345, ruled:
  "If a post-dated check is returned unpaid due to early presentation, the drawer shall be held criminally liable."
• The Supreme Court's Grand Chamber, in its decision numbered 2020/1654 E., 2021/2489 K.,
  stated: "In the case of post-dated checks, an agreement on the maturity date between the parties does not alter the legal nature of the check. However, specific contractual provisions between the parties are a separate matter for consideration."

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Practical Prevention Methods

Merchants can take some measures to reduce the risks associated with post-dated checks:

1. To formalize the payment terms in a separate written agreement.
2. Using a promissory note instead of a check . Because a promissory note is issued as a deferred payment instrument.
3. Obtaining additional guarantees, such as letters of guarantee or sureties , through banks
4. Choosing electronic payment systems instead of checks.

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Proposed Solutions

• legislative changes .
• Introducing special arrangements to protect the expectations of the parties,
• Increasing the obligation of banks to inform the parties in case of early presentation,
• Making Supreme Court precedents more predictable in practice.

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Conclusion

Post-dated checks are a common practice in commercial transactions, but legally problematic. Although the law regulates checks as a means of payment, commercial practice often uses them as a deferred credit instrument. This leads to numerous problems, including early presentation, bounced checks, penalties, and loss of reputation

The Supreme Court rulings continue to view checks not as a deferred payment instrument, but as negotiable instruments payable on demand. Therefore, it would be safer for parties to prefer promissory notes or alternative payment instruments instead of checks in their commercial transactions