ERDEM-NEWSLETTER-2018-metin

54 NEWSLETTER 2018 The Consequences of Late Payment in the Procurement of Goods and Services* Att. Duygu Oner Introduction Under Turkish law, the fundamental provisions regarding default and performance of debts are regulated under Turkish Code of Obli- gations numbered 6098 (“TCO”). Special provisions are regulated in Article 1530 of Turkish Commercial Code numbered 6102 (“TCC”), in relation to the performance period of pecuniary debts, and the emergence of the conditions for default, by referring to the “Directive on Combating Late Payment in Commercial Transactions” numbered 2011/7 of the European Parliament and Council (“2011/7/EU Direc- tive”) for the purpose of protecting the enterprises that supply goods and services against late payment risks for their pecuniary receivables. As it is indicated in the preamble of the provision, many strong commercial enterprises use late payments as a financing instrument. However, this instrument puts the suppliers who provide goods and services to the strong commercial enterprises on the spot, it shakes up their financial situation, confuses competitive capacity and profit- ability, and it even drags them into bankruptcy 1 . The law-maker, in order to prevent late payments and protect small and medium-sized enterprises (SMEs) that supply goods and services against strong enterprises, stipulates through the provision under Article 1530 of the TCC that the debtor who fails to pay its debts in time goes into default without the necessity of notice, and that the creditor is entitled to default interest. * Article of February 2018 1 Preamble of Article 1530 of the TCC No. 6102.