Creditor Default and Deposit

Legal Article · 12 November 2026
Av. Thomas Andreas Di Constantinople

Creditor default is unjustified refusal of properly tendered performance or avoidance of preparatory acts needed for the debtor to perform. Article 106 of the Turkish Code of Obligations requires genuinely proper tender. Rejection of incomplete performance, performance at the wrong place, or at a contractually improper time may not produce the same result.

Creditor default generally does not automatically extinguish the debt. For delivery of a thing, Article 107 of the Turkish Code of Obligations allows deposit at the creditor's risk and expense. The judge at the place of performance generally determines the deposit location, subject to a special statutory opportunity for commercial goods.

If the goods are unsuitable for deposit, liable to deteriorate, or costly to preserve, sale and deposit of proceeds under Article 108 of the Turkish Code of Obligations may be considered. Notice and permission requirements apply. Disposal at the debtor's discretion does not have the same legal effect as statutory sale.

Different provisions may govern obligations to act or other impediments. After identifying refusal, select the legal consequence suited to the performance type. Although creditor default and debtor delay may appear opposites, their conditions and consequences are distinct mechanisms.

Legal Basis: Turkish Code of Obligations No. 6098, Articles 106–111. Official legislative text.

This article has been prepared for general legal information purposes.