Consigned Goods Remain with a Turkish Distributor: Inventory, Sale Proceeds and Return
Quick summary
| Question | Assessment |
|---|---|
| Focus | Consigned Goods Remain with a Turkish Distributor: Inventory, Sale Proceeds and Return |
| Legal starting point | TCO Articles 112 and relevant mandate, commission or custody provisions |
| Key record | Consignment and sale-authority agreement |
| First action | Seek a verified inventory and proceeds reconciliation and choose the correct lawful return, payment or insolvency-protection route. |
The issue and the legal distinction
An overseas supplier may place stock with a Turkish distributor to pay only when sold. The agreement should distinguish outright sale on credit from genuine consignment and identify authority to sell.
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Ownership evidence, segregation and customer delivery records become critical when the distributor stops reporting or enters financial difficulty. A personal payment claim differs from a proprietary recovery claim.
What changes the assessment
Inventory by serial or batch number and identify commingled stock. Trace proceeds without assuming all money in a bank account belongs to the consignor.
Insolvency or attachment creates separate procedural issues requiring prompt specialist action. Do not physically remove goods from third-party premises without lawful authority merely because ownership is asserted.
Legal framework
Provisions to examine: TCO Articles 112 and relevant mandate, commission or custody provisions.
Identify whether the business acts as distributor, agent, franchisee, reseller or custodian. These roles can overlap commercially but do not produce identical legal duties. TCO Article 112 can support the contractual breach analysis, while agency, competition and other mandatory rules may require separate treatment.
Read exit obligations alongside the operational promise in dispute. A valid termination does not automatically erase accrued payment or property rights. Equally, an ongoing payment dispute does not establish an unrestricted right to keep another party’s assets or continue representing an affiliation that has ended.
Evidence to preserve
- Consignment and sale-authority agreement.
- Stock delivery and segregation records.
- Sales and proceeds account.
- Current inventory and third-party claims.
Keep the original documents, identify their source and record when they were received. Preserve the version effective when the promise was made. Where a document is held by the opponent, request lawful preservation and consider the appropriate procedural route rather than trying to obtain it through unauthorised access.
A hypothetical example
Suppose identified consignment units remain unsold while other units have been sold and paid for by customers. The supplier needs two schedules: goods for lawful return and proceeds for accounting.
If stock was actually sold on credit to the distributor, ownership analysis changes. A single demand for all goods and the entire invoiced price risks claiming incompatible or duplicated remedies.
This illustration explains the distinction; it is not a reported case or a prediction of an outcome.
Practical next steps
Seek a verified inventory and proceeds reconciliation and choose the correct lawful return, payment or insolvency-protection route.
Build the first notice around the particular evidence: consignment and sale-authority agreement, the relevant date, the alleged failure and the requested response. Keep proof of delivery. A preservation request, a demand for performance and a final election of remedies can have different consequences; choose them with the contract and deadlines in view.
Remedies and financial loss
Separate unsold stock, sold-but-unpaid proceeds and supported damage. Avoid recovering both the returned goods and their full sale price.
Procedure for a client outside Turkey
Nationality alone does not decide governing law or forum. Review the parties, place of performance, contractual choice, any arbitration provision and applicable mandatory rules. Consumer and employment matters can require protected-forum analysis. Turkish proceedings may also require a mediation step or security analysis depending on the dispute; neither should be assumed applicable to every case.
For a Turkish civil case, counsel can consider whether evidence preservation under HMK Articles 400 onward or interim relief under Articles 389 onward is justified. These are different measures with specific conditions, possible security and follow-up duties. A general fear of nonpayment does not establish entitlement to every injunction. Calculate the actual notice and filing calendar before waiting for a voluntary reply.
Primary legislation and official sources
- Turkish Code of Obligations No. 6098
- Code of Civil Procedure No. 6100
- International Private and Procedural Law No. 5718
- Turkish Commercial Code No. 6102
Apply the wording and amendments effective for the relevant transaction and procedural step. A historical enactment text does not by itself establish the current rule.
Frequently asked questions
Does a consignment label defeat every third-party claim?
No. The actual legal structure, identification and applicable third-party or insolvency rules require analysis.
What is the main legal distinction?
An overseas supplier may place stock with a Turkish distributor to pay only when sold. The agreement should distinguish outright sale on credit from genuine consignment and identify authority to sell.
Which fact can change the legal assessment?
Inventory by serial or batch number and identify commingled stock. Trace proceeds without assuming all money in a bank account belongs to the consignor.
Which documents should I preserve?
consignment and sale-authority agreement, stock delivery and segregation records, sales and proceeds account, current inventory and third-party claims. Preserve the original versions and the dates on which they were received.
What should I do first?
Seek a verified inventory and proceeds reconciliation and choose the correct lawful return, payment or insolvency-protection route.
How should the claimed loss be calculated?
Separate unsold stock, sold-but-unpaid proceeds and supported damage. Avoid recovering both the returned goods and their full sale price.
Which legal provisions should be examined?
TCO Articles 112 and relevant mandate, commission or custody provisions. Governing law, transaction classification and mandatory rules determine their application.
How could this issue arise in practice?
Suppose identified consignment units remain unsold while other units have been sold and paid for by customers. The supplier needs two schedules: goods for lawful return and proceeds for accounting. This is a hypothetical illustration, not a reported case.
Does sending a complaint stop every deadline?
No. Contract notice, limitation, appeal and procedural periods can differ. A lawyer should calculate the dates from the actual contract and service records; informal negotiation does not automatically preserve every right.
When should a technical or accounting expert be involved?
Use an appropriately qualified expert where the disputed fact requires specialist analysis. Define the question using stock delivery and segregation records and sales and proceeds account; preserve the original material before corrective work.
Can this matter be assessed while I am abroad?
An initial assessment can start with the contract, chronology and the records listed above. Formal representation, any personal attendance and inspection requirements depend on the case.
What should a settlement specify?
Identify the parties, covered claims, payment, remaining performance and any release. Account for third-party recoveries and do not assume a partial payment settles every related obligation.
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