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NEWSLETTER 2013
234
Relationship of the Surety with the Creditor and the Debtor in
accordance with the New Turkish Code of Obligations
2
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Att. Pelin Baydar
Articles 589 to 597 of the Turkish Code of Obligations (“TCO”) No.
6098, which entered into force on 01.07.2012, regulates the relationship
of the surety with the creditor and the debtor.
Relationship between the Surety and the Creditor
Scope of Liability.
Pursuant to Article 589 TCO, in all cases, the
surety’s liability is limited to the maximum amount indicated in the
surety contract.
Unless otherwise agreed, the surety is liable up to this limit for:
1. the amount of the principal obligation, including the legal
consequences of any fault or default on the part of the debtor;
2. the costs of debt enforcement proceedings and legal action brought
against the debtor and, where applicable, costs of delivering
pledges and transferring liens; and
3. interest at the contractually agreed rate payable for the current
year and the previous year or, where applicable, for the annual
payments due for the current year and the previous year.
Unless otherwise provided by the contract, the surety is liable only
for the principal debtor’s obligations arising after the contract of surety
was concluded. Agreements providing that the surety will be liable for
damage resulting from the extinction of the contract and any contractual
penalty are of absolute nullity.
Resort to the Surety.
Pursuant to Article 590 TCO, the creditor may
not apply to the surety in respect of the principal obligation before the
date fixed for its payment even if such date is brought forward following
the principal debtor’s bankruptcy.
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Article of November 2013