The Limits to the Surety’s Defenses that Arise from the Principal Debt Relationship

Abstract

Due to the accessoriness feature of the suretyship, the surety can plead against the creditor the defenses of the principal debtor arising from the principal debt relationship that can be pleaded by the principal debtor against the creditor. However, there are limits to these defenses and the surety may not plead all the defenses arising from the principal debt relationship. The defenses that arise from the principal debt relationship but cannot be pleaded by the surety are defenses that the surety cannot plead due to the nature of the surety’s undertaking; defenses that belong to the principal debtor, yet do not arise from the principal debt relationship; and finally, defenses that the surety is not allowed to plead by law. Defenses that the surety cannot plead by law are regulated under Art. 582/2 of Turkish Code of Obligations. According to this provision, the surety may not plead the mistake or incapacity to make a contract or time-barred obligations where he/she is aware of the situation at the time of the conclusion of the suretyship agreement. In situations stipulated under TCO Art. 582/2, the contract may not be categorized as suretyship due to lack of accessoriness. In this article, the scope of application of Art. 582/2 and the qualification of the contract concluded between the guarantor and the creditor shall be evaluated. Another important issue regarding the defenses that arise from the principal debt relationship but cannot be pleaded by the surety is whether the surety may plead the formative rights of the principal debtor that arise from the principal debt relationship against the creditor. The surety cannot invoke a formative right that belongs to principal debtor; however, the surety may refuse to pay under certain circumstances. This issue shall also be examined in this article. Briefly, in this article, first, general information about the suretyship agreement shall be given, then the defenses of the surety arising from the main debt relationship and the rules thereof shall be explained, and finally, the limits of the surety’s ability to apply to the defenses arising from the main debt relationship shall be examined.