What is a Time Draft? Features and Use Cases of Time Drafts
A time draft is a type of promissory note that will be paid on a specific date. In this article, you will find comprehensive answers to questions about what a time draft is, its features, and when it is used.
Definition of Time Draft
A time draft is a type of promissory note in which the debtor commits to make payment to the creditor on a specific date. The maturity date must be clearly stated on the note.
Features of Time Draft
1. Specific Maturity Date
The maturity date must be specified on the time draft. This date is mandatory for the validity of the note.
2. Payment on Maturity
Time drafts are paid on the maturity date. Payment before the maturity date is not required.
3. Presentation Period
Time drafts have more flexible presentation periods. They can be presented within a certain period after the maturity date.
Time Draft vs Demand Draft
| Feature | Time Draft | Demand Draft |
|---|---|---|
| Maturity | Specific date | No maturity |
| Payment | On maturity date | When presented |
| Usage | Planned payments | Urgent payments |
Use Cases of Time Drafts
- Commercial Relationships: In commercial transactions between seller and buyer
- Credit Relationships: In credit transactions between debtor and creditor
- Planned Payments: In situations where payment must be made on a specific date
Important Points When Writing Time Drafts
- Maturity Date: The maturity date must be clear and explicit
- Amounts: The amount must be written both in figures and words
- Signature: The note must be signed
- TCC Compliance: Must comply with Turkish Commercial Code rules
Conclusion
A time draft is an important commercial document used for making payment on a specific date. When properly drafted, it is a secure and legal payment instrument.