Legal Regulations On Negotiable Instruments Financing From The Perspective Of Rechtsscheintheorie

Negotiable instrument is one of the oldest credit tools in the world. Generally, jurists believe that the drafts are originated in "European Merchant Law" in 12th, 13th century, which come into existence because of the need for international trade settlement. With the developing of commodity economy, the usage of commercial paper becomes more and more extensive. The credit function of drafts primarily reflects by the commercial paper financing. Negotiable instruments financing, refers to the holders use the negotiable instruments to circulate funds, which means the maturity of the modern paper market. In general, the holders of a negotiable instrument can discount, transfer or pledge to achieve the purpose of financing. In 20th century, the difficulty of financing has become the biggest problem of business growth. In order to meet the needs of modern enterprise ' finances ,the negotiable instruments business has been developed continually, and the credit function of drafts have been further expanded.In order to maximize the credit function of drafts, it is necessary to implement a prefect Negotiable Instruments Law to protect the security of the negotiable instruments. Only the negotiable instruments are generally used in daily life, the function of negotiable instruments could be truly realized. Therefore, the effective Negotiable Instruments Law should be the maximum extent to ensure the negotiability.The principle of Rechtsscheintheorie, private law scholars generally believe that the theory was founded by German scholars in the early 20th century. Rechtsscheintheorie plays a special role in protecting the safety of transactions and the interests of the 3rd person with good will. Rechtsscheintheorie of the purpose is to maintain security of transactions, and to facilitate the flow of commerce is the basic concept of negotiable instruments law, however, they have a natural contact.In this paper, we introduce the Rechtsscheintheorie, and analysis of the legal form of this theory in negotiable instruments law, propose that the Rechtsscheintheorie may be could fully apply to negotiable instruments law. Then research the negotiation, draft pledges and forfaiting. Meanwhile, give some personal opinions about modifying the existing negotiable instruments law. The negotiable instruments law should be better implemented regards the features of the commercial papers, such as abstract, setting of rights, negotiability and so on.