On The Guarantor's Right Of Defence

As a special guaranty of contractual bligation, guarantee is in the microsense an important means to supervise and urge the payment of a debt, to guarantee the realization of creditor' s right, and to relieve the loss of creditor' s right, and in the macrosense has the positive effect to prompt the circulation of funds,, accomodation and commodities, to promote proper allocation of social resources and maintain the security of market transactions.Guarantee is a valuable means to protect the interests of creditors. In practice, people place special emphasis on the duty and liability of a guarantor and the protection of creditor' s interests yet neglect to a certain degree the promotion of a guarantor' s rights and their restriction on the creditor, which appears very unfavorable and unfair to the guarantor who unilaterally and voluntarily assumes the responsibility for the others' behavior. That must be readjusted to a state of balance, and law is the most efficient adjuster. In fact, a guarantor' s right of plea is regarded as a basic content to balance the interests of various civil commercial law institutes a series of defensive rights for guarantors to regulate creditors and maintain the equity of the interests of the contractual subjects of a guarantee. The typical expression of rights is the guarantor' s right to defense. The theoretical classifications of the guarantor' s right of pleaare various. The paper proposes that the right should be divided into three categories according to the criterion of whether the right of plea belongs exclusively to guarrantors ,namely, the guarantor' s general right of plea and his exclusive right to defense.The former includes the principal debtor' s right of plea and the general debtor' s right of plea enjoyed by the guarantor.Decided by the subordinativeness, and substitutiveness of guaranty liability and the joint globality of the position of the principal debtor, the guarantor assumes the debtor' s lisbility and thus should enjoy the debtor' s rights and the principal debtor' s right to defense, which includes four categories as follows: (a) the right of plea not yet exercised;(b)the right of plea already deprived;(c)the right of plea already excluded such as the right to plea of simultaneous performance, the tight of plea pf terminated prescription, the right of plea of disorder and the right to plea of post performance;(d) the principal debtor' s other rights to defense such as the right of setoff and the right to quash defense. Under different circumstances, the conditions for the guarantor to exercise the principal debtor' s right of plea and the performing force of the right of plea vary, and the contents rely on the specific provisions in substantive law.For the creditor, the guarantor is still a debtor. The rights enjoyed by the general debtor should be enjoyed by the guarantor as well. The rights consist of the right to invalidate and quash the contract of guaranty, the right to exterminate the guaranteed debts, the right ofplea of unexpired term of payment of the guaranteed debts and the right of plea of termination of prescription of the guaranteed debts.The exclusive right of plea of the guarantor is based on his independent personality and pecialcapacity. Legislations of different countries provide unidentical prescriptions of the guarantor' s exclusive right to defense, among which the most popular one is the right of plea for preference claims of the general guarantor. It means that when the principal creditor asks the guarantor toperform the guaranty liability, the general guarantor is entitled to ask him to claim for coercive execution beforehand. Before the disputes on principal contract have been settled and the coercive execution has accomplished the performance of debts,the guarantor may refuse to assume the guaranty liahbility, which the nature is to entitle the guarantor to sequenrial interests or privilege of order.The establishment of the right of plea for preference claims not only main tains the guaranror' s interests but...