How Can a Promissory Note Become Invalid?

A promissory note, also known as a "bono" in Turkish, is a type of valuable document regulated by the Turkish Commercial Code. Promissory notes are widely used by businesses and individuals as a payment method in commercial transactions or for purchasing goods and services. The conditions and requirements for promissory notes are clearly stated in the Turkish Commercial Code, and it is essential that promissory notes are prepared and stored according to these rules. If not prepared properly, a promissory note may be considered invalid.

Given the increasing cases of fraud and invalid promissory notes, it’s important to understand how a promissory note can be rendered invalid.

Validity Conditions of Promissory Notes

According to Article 776 of the Turkish Commercial Code, a promissory note (bono or emre yazılı senet) must include the following elements:

• The words "promissory note" or "payable to order" (or the equivalent term if written in another language).
• An unconditional promise to pay a specified amount.
• The due date.
• The place of payment.
• The name of the person to whom the payment will be made or to whose order it will be paid.
• The date and place of issuance.
• The signature of the issuer.

If any of these elements are missing, the note is not considered valid under Article 777, except for certain cases specified in the second and fourth paragraphs. If the due date is not stated, the note is payable upon presentation. If no payment location is specified, the place of issuance is assumed to be the issuer's residence.

Including conditional statements such as "Payment will be made if we win the bid" or "Payment will be made if the goods are delivered completely" invalidates the promissory note and removes its status as a negotiable instrument. Therefore, for a promissory note to be valid, the promise of payment must not be subject to any conditions.

Additional Requirements for a Valid Promissory Note

• The amount payable must be clearly stated on the note.
• The amount should be written in both words and figures, and if there is any discrepancy, the written amount takes precedence.
• If the amount is written multiple times and differs between the written and numerical forms, the lower amount is accepted as valid.
• The person issuing the note is responsible for the debt indicated on the note.
• A document without a signature is not legally binding.
• While it’s not mandatory to include the issuer's name, having the name and surname in handwriting on the note can help as proof of identity.
• A note does not become invalid if it bears two signatures; the second signature is considered an endorsement (aval), which is a type of guarantee used in negotiable instruments like promissory notes and checks.

A common example of an endorsement is the addition of a guarantor's signature below the debtor’s name and title. The debtor can be either a natural person or a legal entity, and additional signatures on the note may also serve as endorsements.

How to Create and Manage Promissory Notes with Semosis?

By registering with Semosis, you can easily upload your existing promissory notes to the platform or create flawless new ones. As a creditor, you can also set up automatic reminders for the debtor as the due date approaches, so you no longer have to worry about whether the note will be paid on time.

Debtors can easily make their payments through Semosis using a bank card or credit card, making transactions much easier and more secure. With Semosis, managing promissory note transactions has never been simpler!