Discussion Of The Legal Status Of Finance Leases

Financial leasing is a novel type of transaction which merges in the modern finance market with double functions of financing and leasing. In such transaction, the lessee first chooses the supplier and the equipment. Then the lessor enters into a supply agreement with the supplier. After that, the lessor and lessee enter into a leasing agreement. The lessee will use the equipment to recover its loans, interests and other expenses in the form of rentals in installment.Financial leasing originated from lease and sale, but has far outgrown its relations with them and has manifested its own legal features as an independent type of transaction. The method is widely used to acquire the right to use the equipment. It is considered as a sunrise industry by some western countries.Financial leasing is different from traditional leasing in many ways. The lessee will possess the equipment during the whole leasing period and whether the lessor will receive the installment entirely depends on the economic status of the lessee. Therefore, among the three basic parties of the financial leasing, the rights of the lessor are most easily injured. Many rules have been set up to protect the lessor. These rules at the same time affect the lessee's interest. However, the rights of the lessee are usually neglected.It is of significant importance to study the unique legal features of financial leasing for the purpose of better employment of this financing means. The study is especially important for China whose modernization drive demands more capital and advanced equipments.This thesis attempts to analyze the legal status of the lessor and the lessee to find a balance of the two parties. This thesis is composed of five chapters:Chapter one is an introduction, briefing on the relevant concepts of financial leasing, the special characteristics of financial leasing compared with the traditional leasing, and the formation and the development of financial leasing abroad and domestic. In the definition of the concept, I have compared U.S.A., Britain and the definition of the international financial leasing convention to reveal its nature.Chapter two mainly concerns the legal relationship of the financial leasing including the difference with the traditional leasing, the unique meaning of its ownership and the special three-party relationship. This chapter attempts to further understand the nature of financial leasing and introduce the basic parties of financial leasing.Chapter three analyzes the 4 existing lessor protecting and why the lessor's rights are easily infringed in the financial leasing transaction, then introduce the present studies of lessor protecting in our country.Chapter four firstly comes up with the standing that the lessee's rights will be affected by those lessor protection rules if inappropriately used. And this chapter comes to an conclusion of the lessee's legal status and the present studies of lessee's legal status in our country.Chapter five is the legislative suggestions in balancing the interests of the lessor and the lessee to improve the financial leasing of our country. I first analyze China's current legislation in relevant to financial leasing And Secondly then describe the two models of the international legislation on the financial leasing and the choice of the legislative mode for our country. Then, with the analysis of multiple perspectives, point out that specific legislation on financial leasing is not required at the present stage in China. Finally, put forward relevant legislative suggestions.The final conclusion part summarize the main contents of the former parts, and enumerate the theories and research findings through all chapters, and also clarified the results of research of this thesis.