What is the Difference Between a Promissory Note and a Check? Updated Guide
The Turkish Commercial Code (TCC) and the Check Law No. 5941 regulate promissory notes (bono) and checks under different rules. Understanding those differences helps you manage cash flow, mitigate legal risk, and choose the right payment instrument for each transaction.
What is a Promissory Note?
A promissory note (bono) is a negotiable instrument in which the debtor promises to pay a specific amount unconditionally on a specific date or on demand. Article 776 of the TCC requires the wording “bono/order promissory note,” an unconditional payment promise, maturity (if any), place of payment, creditor details, and the drawer’s wet signature.
Key Traits of Promissory Notes
- Issued by the debtor; payment responsibility rests on the issuer (and guarantors, if any).
- Functions as credit: common in instalment sales and deferred trade.
- Can be endorsed or guaranteed (aval) to transfer or strengthen security.
- If unpaid at maturity, the holder may initiate accelerated enforcement under execution law.
What is a Check?
A check is a written order by the drawer instructing a bank to pay a stated sum to a designated person or to bearer. Under the Check Law, checks can only be drawn on banks and must respect statutory presentation periods.
Key Traits of Checks
- Issued by the account holder; payment obligation ultimately lies with the bank.
- Legally payable on demand, even if a future date is printed.
- If dishonored, the drawer faces both civil liability and criminal penalties (converted to judicial fines).
- Preferred when the seller wants assurance that funds exist at the bank.
Strategic Differences Between Promissory Notes and Checks
1. Parties and Payment Guarantee
- Promissory Note: Backed by the debtor’s balance sheet; additional guarantors can be added.
- Check: Backed by bank funds and legal sanctions against insufficient funds.
2. Maturity and Presentation
- Promissory Note: Maturity can be set freely (on demand, after sight, fixed date, etc.). Presenting the note at maturity is sufficient.
- Check: Legally payable on sight. Presentation periods: 10 days if issued in the same city, 1 month if issued in another Turkish city, 3 months for foreign checks.
3. Legal Consequences
- Promissory Note: Non-payment triggers fast-track enforcement (kambiyo proceedings) and interest.
- Check: Bounced checks lead to execution plus judicial fines, and the drawer’s bank accounts may be blocked.
4. Use Cases and Cash Flow Impact
- Promissory Note: Ideal for medium/long-term payment plans, project-based work, and custom financing.
- Check: Better for near-cash transactions, quick deliveries, and situations demanding bank-backed assurance.
5. Endorsement and Transferability
Both instruments can be endorsed, but checks must also satisfy stricter rules about bearer/order clauses and presentation timelines.
When Should You Prefer Each Instrument?
Prefer a Promissory Note When:
- You are granting deferred payment terms,
- You know the debtor’s financial standing or have collateral/guarantors,
- You want a document that mirrors the instalment schedule.
Prefer a Check When:
- You need bank-backed assurance for immediate or short-term payments,
- You want leverage from criminal sanctions in case of non-payment,
- You treat the document as a cash substitute and plan to submit it quickly.
Comparison Matrix
| Topic | Promissory Note | Check |
|---|---|---|
| Legal Basis | TCC art. 776-778 | Check Law No. 5941 |
| Drawer | Debtor | Account holder |
| Primary Payor | Debtor / guarantor | Bank + drawer |
| Maturity | Flexible (on demand or fixed date) | Legally payable on sight |
| Presentation Period | On/after maturity | 10 days / 1 month / 3 months |
| Sanctions | Civil enforcement | Civil + criminal (bounced check) |
| Typical Use | Credit sales, project finance | Near-cash trade, quick settlement |
Practical Tips
- A valid promissory note must contain the wording “bono/order promissory note” and an unconditional payment promise.
- Checks must show the bank’s trade name, account details, and issue date with no blanks.
- Missing presentation periods weaken negotiable-instrument protections; keep copies of protests and notices.
- Retrieve the original instrument once payment is made and archive a digital copy securely.
Conclusion
Promissory notes rely on the debtor’s promise, while checks derive strength from the banking system and criminal deterrence. Assess your transaction’s risk profile, maturity expectations, and enforcement needs before choosing. Senetyaz delivers TCC-compliant promissory note templates and validation steps, and also offers guidance so you can evaluate whether a check would better fit your scenario.