When a 120-Day Payment Term Is Void: TCC Art. 1530(5)–(7) and the Gross Unfairness Test

A longer term survives only in a narrow window.

A payment term of 60 days agreed between two businesses in Türkiye is enforceable. A term of 120 days usually is not, and the reason is structural rather than discretionary: Article 1530(5) of the Turkish Commercial Code (TCC, Law No. 6102) sets 60 days as the maximum contractual payment period in the supply of goods and services between commercial enterprises, and permits a longer period only where three conditions hold at the same time. When the clause fails that test, the consequence is not that the buyer has no obligation to pay on time — it is the opposite. The contract is read as though it had set no payment date at all, and the statutory clock in Article 1530(4) starts instead, putting the buyer in default 30 days after the invoice or the delivery, without any notice from the seller.

That inversion is what makes the drafting question commercially serious. A supplier who accepts a 120-day term believing it is bound may in fact be entitled to interest from day 31; a buyer who budgeted its working capital around that term may be accruing statutory default interest for three months without knowing it. What follows works through Article 1530 paragraph by paragraph, together with the general default rules in the Turkish Code of Obligations (TCO, Law No. 6098) that it displaces. The consolidated Commercial Code and Code of Obligations texts are both published by the official gazette service.

1. The Ceiling and Its Starting Point

Article 1530(5) fixes the maximum in a single sentence: the payment period provided for in the contract may be at most 60 days from the date on which the invoice or an equivalent payment request was received, or the goods or services were received, or the inspection and acceptance procedure for the goods or services was completed.

Two drafting consequences follow. The ceiling is measured from an event, not from the contract or order date, so a clause reading “payment 60 days from order” is not the clause the statute contemplates and may push the effective term past the limit once production and shipping are added. And where goods are subject to inspection and acceptance, the clock starts when that procedure is complete — which is why the length of the inspection window is regulated separately, as set out below.

The sentence that follows the ceiling is the one that generates most of the negotiation. Article 1530(5) continues that the parties may provide for a longer period, on condition that it does not create a grossly unfair situation against the creditor and that they agree on it expressly. Then comes the limit on that permission: where the creditor is a small or medium-sized enterprise (KOBİ) or an agricultural or livestock producer, or where the debtor bears the status of a large-scale enterprise, the payment period cannot exceed 60 days.

Read literally, the extension is available only where the creditor is neither an SME nor a producer and the debtor is not large-scale. That is a narrower gate than most supply negotiations assume, and it points in an unexpected direction: an extended term is legally available mainly where the supplier is the larger party and the buyer the smaller one — the reverse of the situation in which long terms are usually demanded.

Who counts as an SME is not left to impression. TCC Article 1522 provides that the criteria defining small and medium-sized enterprises are laid down by regulation and apply to all relevant provisions of the Code, and Article 1523(1) treats capital companies above those criteria as large companies. The SME Regulation defines an SME as an enterprise employing fewer than 250 persons whose annual net sales revenue or balance sheet total does not exceed the monetary threshold in force, that threshold having last been raised by Presidential Decision published in the Official Gazette of 18 March 2022. Its Article 6 adds a stabiliser: a business changes class, or loses SME status, only where it exceeds or falls below a criterion in two consecutive accounting periods, so a single strong year does not reclassify a counterparty mid-contract.

2. An Over-Long Term Is Replaced, Not Merely Struck Out

The most common misreading of Article 1530 is that an excessive payment term is simply void, leaving the parties to argue about what should replace it. The Code answers the question itself. Article 1530(4) applies in two situations placed side by side: where the contract states no payment day or period, and where the stated period is contrary to paragraph 5. In both, the debtor is deemed in default, without notice, and the creditor becomes entitled to interest at the end of whichever of the following 30-day periods fits the sequence of events:

• 30 days from the debtor’s receipt of the invoice or equivalent payment request;
• where the date of receipt of the invoice is uncertain, 30 days from receipt of the goods or services;
• where the debtor received the invoice before delivery, 30 days from the date of delivery;
• where the law or the contract provides for an inspection or acceptance procedure and the debtor received the invoice on or before the date that procedure was completed, 30 days from that date.

So a 120-day clause does not buy the buyer 120 days, and it does not leave a vacuum: it collapses the term to roughly half of the ordinary statutory maximum. This is one of the few places in Turkish commercial legislation where an aggressive drafting position makes the drafter’s own position materially worse, and it belongs in the negotiation rather than in the later dispute. Where a supply relationship is papered from scratch, the payment clause sits alongside the other allocation-of-risk terms addressed in work on commercial contracts.

There is also a structural reason the contract as a whole survives. Article 1530(1) states that transactions and conditions prohibited by commercial provisions are void, but adds that contracts exceeding a maximum limit set by law or by competent authorities are deemed to have been made at that maximum limit, and that within those limits the second sentence of TCO Article 27(2) — the rule under which a contract falls entirely if it clearly would not have been made without the invalid provision — does not apply. The default position under Article 1530 is therefore correction, not destruction.

3. Default Without a Notice, and Interest Without a Clause

Article 1530(2) is the provision that changes the practical dynamics of collection. In transactions between commercial enterprises for the supply of goods and services, where the creditor has performed its supply obligation arising from law or contract, the debtor falls into default without any need for a notice of demand if it fails to pay on the date provided in the contract or within the stated payment period. The paragraph carries one carve-out inside it: cases in which the debtor cannot be held responsible for the delay.

This departs deliberately from the general regime. TCO Article 117(1) states the ordinary rule that the debtor of a due debt falls into default upon the creditor’s notice, its second paragraph adding that where the performance day was jointly determined, the passing of that day suffices. Article 1530(2) removes the notice requirement across the whole category of B2B supply, so a supplier does not lose interest by having failed to send a warning letter.

Article 1530(3) completes the picture on the money: the creditor of a defaulting debtor becomes entitled to interest from the date provided in the contract, or from the day following the end of the payment period, even if interest was not stipulated. Silence in the contract is therefore not a concession; it is simply a referral to the statutory rate.

4. The Clauses the Statute Will Not Enforce

Article 1530(6) removes three familiar drafting devices from the table at once. Contractual provisions stating that no late-payment interest will be paid, that interest so low as to be considered grossly unfair will be paid, or that the debtor will not be liable — or will be liable only in a limited way — for the loss the creditor suffers through late payment, are invalid. The paragraph then closes the gap it opens: in the event of invalidity, paragraph 7 applies.

Paragraph 7 is the pricing mechanism. Where the default interest rate for late payments is not provided for in the contract, or the relevant provisions are invalid, the applicable rate and the minimum compensation claimable for the costs of collecting the receivable are announced by the Central Bank of the Republic of Türkiye each January. The statute constrains that announcement: the rate must be at least eight per cent higher than the default interest rate for commercial affairs under Law No. 3095 on Statutory Interest and Default Interest, whose Article 2(2) allows commercial default interest at the Central Bank’s short-term advance rate where that rate is higher. The figures change annually and should be taken from the announcement in force — currently the Communiqué on the Default Interest Rate Applicable to Late Payments in the Supply of Goods and Services, published in the Official Gazette of 2 January 2026.

Beyond interest, the general default rules continue to operate. TCO Article 118 makes the defaulting debtor liable for the creditor’s loss from late performance unless it proves it was not at fault in falling into default, and Article 122 allows the creditor to claim loss exceeding the default interest, again unless the debtor proves the absence of any fault. Article 120(2) caps contractual default interest generally at double the rate determined under its first paragraph — a ceiling that matters when a supplier tries to price late payment aggressively rather than defensively.

5. The Inspection Window: Where 60 Days Quietly Becomes More

Because the payment clock can start on completion of inspection and acceptance, a long acceptance procedure is the most natural way to stretch a compliant 60-day term into something much longer in practice. Article 1530(4)(d) anticipates the manoeuvre. Where the law or the contract provides for an inspection or acceptance procedure and the debtor received the invoice on or before the date the procedure was completed, the 30-day fallback runs from that date — but the sub-paragraph then adds a qualification introduced by the words şu kadar ki: where the inspection or acceptance period provided for in the contract exceeds 30 days from receipt of the goods or services and this creates a grossly unfair situation against the creditor, the inspection period is deemed to be 30 days from receipt.

Both limbs matter. A 45-day acceptance window is not automatically cut down; it is cut down where its length is also grossly unfair to the creditor in the circumstances. Suppliers should therefore treat the acceptance clause as part of the payment clause rather than as a quality-control detail, and an inspection period drafted purely to defer payment is the paradigm case the qualification targets.

Article 1530(8) applies the same logic to staged payments. Where the price is to be paid in instalments, the provisions governing payment periods apply in respect of the first instalment, and the unpaid part of each instalment attracts late-payment interest at the paragraph 7 rate. Where the creditor is a small or medium-sized enterprise or an agricultural or livestock producer and the debtor is a large-scale enterprise, provisions for payment by instalments are invalid outright — a rule that quietly removes a widely used procurement structure from a large part of the market.

6. Building the Clause, and What Sits Around It

None of this operates apart from the ordinary evidentiary rules of Turkish commercial practice. TCC Article 3 treats all transactions and acts relating to a commercial enterprise as commercial affairs, and Article 19(2) extends that character to the counterparty where the transaction is commercial for only one side, unless the law provides otherwise. Because the fallback periods all run from receipt of the invoice or of the goods, the invoice trail is the operative evidence — and TCC Article 21(2) reinforces the point from the other direction: a person who receives an invoice and does not object to its content within eight days is deemed to have accepted that content.

A payment clause that holds up therefore does four things: it identifies the triggering event precisely, it selects a period the parties are actually permitted to select given their respective sizes, it keeps any inspection window inside 30 days unless there is a genuine technical reason for more, and it treats interest as a matter of rate rather than of existence. The same discipline runs through the broader body of Turkish commercial law advice that supply, distribution, and framework agreements require, and it interacts directly with the termination economics discussed in our analysis of termination of distribution and agency agreements and the portfolio indemnity, where accumulated late payments frequently become the trigger for the termination itself.

Where performance has already run under a non-compliant clause, the argument becomes documentary: when the invoice was received, when the goods were delivered, when acceptance was completed, and therefore when the 30-day statutory clock began. Disputes of that shape turn on the paper trail rather than on the contractual number, and they sit in commercial litigation and arbitration rather than at the drafting stage. The cheaper moment to address Article 1530 is before signature, while the classification of both parties can still change the number in the clause.

This article states the position under the Turkish Commercial Code No. 6102 and the Turkish Code of Obligations No. 6098 as at 9 September 2026. It is general information on the legislation and does not address any specific transaction.