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Non-payment of a progress payment during construction directly affects the contractor’s materials, labour and cash flow. Nevertheless, stopping the entire project merely because money has not arrived is not protected under every contract. Identify which payment is due, who must perform first and what counter-performance the client demands. Temporarily withholding performance, enforcing a receivable and ending the contract are different legal steps; none substitutes for another.

1. Identify the contractual order of performance

Under Article 479 of the Turkish Code of Obligations, the price generally becomes due upon delivery; where delivery and price are arranged by parts, delivery of the relevant part matters. The parties may also agree an advance, monthly progress payments, construction milestones or payment following approval. Unfinished work does not necessarily prevent every interim payment claim; equally, issuing an invoice does not itself accelerate a price contractually payable after delivery.

Read the payment clause, annexes, programme, progress-payment preparation/approval procedure and payment date together. Submission, approval and payment may occur on different dates. For example, where an agreed milestone has been completed and its payment condition met, assess that unpaid item separately against work demanded for the next stage. A general balance sheet does not always establish when each stage became due.

2. Article 97 does not automatically authorise suspension after every delay

Article 97 requires a party demanding performance under a reciprocal contract to have performed or offered its own obligation, unless entitled to perform later. For the contractor, the central question is whether the agreement requires completion first or places an accrued interim-payment obligation earlier in the exchange. The availability of a defence withholding performance cannot be settled without examining that order.

A disputed minor deduction and closure of the entire site also require a separate assessment of scope. Identify the work withheld, unpaid counter-performance, any admitted balance and actual conduct. This preparation does not establish an entitlement to suspend every activity. Allegedly wrongful suspension can expose the contractor to delay penalties, damages, security-related claims and termination by the client; document that exposure alongside the receivable being protected.

3. Inability to perform differs from a payment dispute

Article 98 separately addresses a right endangered by the other party’s inability to perform, with bankruptcy and unsuccessful attachment as statutory examples. Where its requirements are met, withholding performance until counter-performance is secured, and withdrawal if requested security is not provided within an appropriate period, may arise. Not every delayed transfer, disputed payment or rumour proves these conditions.

Records must explain inability to perform and why the receivable is endangered, not merely its amount. Specify the request for security, recipient, scope and appropriate period. An assertion that bank finance failed is not equivalent to bankruptcy, nor should withdrawal be presumed without examining the security request. Article 97 performance order and Article 98 endangerment must not be reduced to a single ground.

4. Separate demand, default and ending the contract

Article 117 generally requires a demand for a due debt, subject to exceptions such as a jointly fixed payment date. Notice should identify the contractual basis, progress payment, due date and requested action. Prove receipt as well as dispatch. A bare reservation of all rights does not explain the payment condition or the start and scope of suspension.

If ending the contract is contemplated, separately assess Articles 123–125 concerning an appropriate additional period, exceptions and elective remedies. There is no universal statutory seven- or thirty-day cure period for every contract. Performance, damages in lieu and withdrawal have different consequences; completed work and settlement also require review. Confusing a temporary suspension notice with an unexamined termination declaration may weaken the contractor’s position.

5. A dissent is not a general Court of Cassation rule

In its judgment of 3 March 2026, E.2025/2723, K.2026/771, the Sixth Civil Chamber considered progress payments and delay penalties connected with public construction works. The majority upheld the outcome rejecting the contractor’s receivable claim. The dissent favoured reversal, discussing examination of the effect of non-payment on delay and the contractor’s ability not to continue in specified circumstances.

It would be inaccurate to report this as a ruling that every contractor may stop whenever payment is withheld. The dissent is not the majority holding, and the file’s particular progress-payment period cannot be imported into all private contracts. The practical risk is that payment allegations, penalties and the net account each require evidence. Public procurement or special specifications require separate examination of payment, notice and reservation rules.

6. Document the site and time effects before stopping

Gather completion level, work performed, outstanding items, dated photographs, site diaries and labour/equipment/material records. Explain which missing payment affected which activity and from when. Concurrent contractor-related delay or incomplete work must not be concealed; assess it separately. An unpaid invoice alone does not attribute every day of delay to the client.

Where evidence may disappear or become significantly harder to present, consider evidence preservation based on legal interest under Civil Procedure Code Article 400. It neither conclusively establishes the claim nor itself authorises suspension. Any practical suspension plan also needs site safety, protection of existing work and handover records; the guide does not instruct the user to stop now.

7. Recovery and the limitation file remain separate

For a commercial dispute, examine commercial-court jurisdiction; consumer or other special regimes require their own rules. Check the defendant’s domicile, place of contractual performance and any valid special provision for territorial jurisdiction. Assess mandatory mediation under Commercial Code Article 5/A for commercial monetary/damages or objection-annulment actions. Preparing suspension does not substitute for commencing recovery proceedings.

Ordinary receivables under a contract for work engage Article 147(6)’s five years and Article 149’s maturity starting point, subject to the particular claim and any special regime. A demand alone does not automatically interrupt limitation. A timely seven-day objection to an ordinary payment order suspends enforcement; the separate one year for annulment starts on service of the objection on the creditor and adds no year to substantive limitation. The final file should explain performance order, due balance, notice, work status and the consequences of the chosen route together.

Sources

General information; individual documents, facts and procedures need separate review.

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Unpaid progress payments: the contractor’s preparation before suspension

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