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EFFECTS OF COVID-19 ON COMMERCIAL CREDIT CONTRACTS

Covid-19 pandemic has become a global problem upon emerging in Wuhan, China and by spreading to the whole world. Covid-19 pandemic which is announced as a “pandemic” by the World Health Organization, has caused adverse effects in many areas, especially in the economy and brought many legal questions and problems along. Within the scope of the negative effects of Covid-19 pandemic, the problems have started to be experienced in terms of fulfilment especially in contractual relations.

Therefore, various financial measures have been taken and these measures taken have created various effects on commercial credit contracts. The general principle in contractual relations is the principle of “Pacta Sunt Servanda in the Contract” and as a rule, the parties are obliged to fulfil the acts they have undertaken as agreed in the contract. Unexpected event and force majeure concepts which are among the concepts related to the scope and exceptions of the principle of “Pacta Sunt Servanda”, have been examined in our articles titled “Contracts/Principle of Pacta Sunt Servanda/Exceptions of this Principle In Turkish Law” and ”Unexpected Event, Force Majeure, Pandemic And Its Effects on Contracts”, and in this article, the reflections of Covid-19 outbreak on commercial credit relations will be examined.

The commercial credit contract is a contract of continuous performance, and it is clearly stated that, as a rule, the right of termination of the contract may be used instead of right to withdraw from the contract for the termination of a contract of continuous performance in accordance with the last subparagraph of the first paragraph of Article 138[1] of the Turkish Code of Obligations. Termination constitutes a forward effect (ex nunc), especially if fulfilling obligation is started in such contracts. All these processes are examined in our article titled “Effects of Covid-19 on Commercial Contracts”.

Commercial credit contract provisions vary according to sectors, fields of activity and project types. However, the debtor, who is a party to all type of commercial credit contracts, must fulfil his obligation to provide information which arises from this contract and also he/she should inform the Bank about how bad its commercial activities have been affected by Covid-19 and whether there are any payment difficulties due to this situation. Each debtor should be evaluated within the scope of its own commercial activities and commercial credit contract provisions. It should be evaluated separately and privately whether there is a significant negative impact on a debtor specific within the scope of a commercial credit contract provisions and whether he/she will fulfil his/her obligations or not.

Moreover, since all commercial credit contracts mainly involve a pecuniary debt, we cannot talk about the impossibility of performance or rely on a force majeure phenomenon. The Supreme Court has decided that making any adaptations in the pecuniary debts between the merchants is not possible on the grounds that the banks should already be predicting this process as a result of the fact that the banks are obliged to lend money to the related merchant and the merchant must be prudent.

Significant Measures Taken in the Context of the Covid-19 Outbreak:

Upon the spread of the Covid-19 disease in our country, the Banking Regulation and Supervision Agency (BDDK) extended the periods for initiating any legal actions for delayed credit payments with the decision numbered 8948 and dated 17 March 2020. Until 31 December 2020, the credits that are delayed will be sent to the collection service after waiting 180 days instead of 90 days. This will include all types of commercial credits including consumer credits, vehicle credits mortgage loans.

Moreover, according to the Law numbered 7226 on Making Amendments on Some Law, which came into force after being published in the Official Gazette numbered 31080 and dated 26 March 2020, it has been ensured that the risk centre records that were previously kept about the real and legal persons who could not make credit payments, whose checks remained uncovered, whose bills are protested and who has debts of credit cards and other credit debts before 24 March 2020 in case they pay or restructure their debts until 31 December 2020 are not taken into account by the creditor.

General Evaluation for Commercial Credit Contracts in the Context of Covid-19 Outbreak:

Covid-19 pandemic may have negatively affected the contractual relationship between the parties. However, with the normalization period after Covid-19 outbreak, a substantial increase is expected for the adaptations of the contracts. It should be noted that; the conditions of the commercial credit contracts affecting merchants’ cash flow should be planned to be made available for the negotiations and should be made more advantageous. For future potential second wave of Covid-19, Covid-19 provisions should be added to the contracts.


[1] …..In contracts including continuous performance, the obligor shall, as a rule, use his right to termination instead of right to withdraw.


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