Financial Contract Research

Content of this paper is financial contract. In modern society, contract is the foundation and the reasons of the society. As an old and new topic and an important legal concept, idea and system of contract growing permeated all areas of life, widely and deeply internalized in people's inner being. Thus, contract has strong vitality. Therefore, to understand the relationship between human society and its interaction, contract system is a insurmountable "gap."Concept of contract is the light of human social life, the contract is the most important activities of civil society and an important part of social life. As we all know, society is constituted by the interaction of people, contract is widely used by people of the modern social life, contract phenomenon is one of the most common and most basic, most often social phenomenon. Modern society is a contract society, the direction of social development and progress is "from status to contract". Contract has rich content, the scope of the contract reflects the freedom of human reason, equality, justice and the spirit of reciprocity, and so is widely accepted, which determines the concept of contract in modern society in the heart of interpersonal status. To date, the contract is considered to be the best human society designed one of the ways of interpersonal communication.Financial contract is the central nervous system of enterprise and the focus of enterprises of various interests. In a sense, corporate governance is the governance of financial contracts. In accordance with the view of modern economics, contract theory is divided into classical contract theory, new classical contract theory and modern contract theory, the financial contract theory is an important part of modern contract theory. According a complete point of view, Theoretical basis of modern financial contract is divided into complete financial contract theory and incomplete financial contract theory. Complete contract is an ideal contract, detailing contract rights and obligations of the parties of each case during the contract period, optimal contract signed by the contractual parties in the case of complete information. Without complete contract, by contrast, it is a reality of the contract. Characterized by incomplete contracts, in contract performance period, the contracting parties can not foresee all possible circumstances and therefore can not complete the contract to develop the content of the terms. Therefore, to resolve the contradictions and conflicts during the parties, enterprises must establish a sound system of financial contracts.Nature of the enterprise is contract, the enterprise is composed of a series of contract collection, in a market economy, each of transactions is a contractual relationship, is a contract option. In fact, the business is "Coupling." of a series of contracts. Therefore, many companies will place a variety of relational benefit man, which involves the interests of the main parties. In addition to these relational benefit men,including shareholders, creditors, management and employees, including suppliers, customers, competitors, government, social organizations, media, etc., their survival and development and business are closely related. Enterprise is a combination of contract by the various relational benefit men for their own interests together, In production and business activities of the enterprise, the various relational benefit men is to pursue the maximization of their own interests.In modern society, in the current socialist market economy, in view of the problems of state-owned enterprises, construction of all relational benefit men involved in the corporate governance structure is particularly prominent.This paper will be divided into the following six parts:The first part is the introduction. The writer briefly described financial contract as the background of my thesis topic and its practical significance, and introduced this idea of the overall research, writing frameworks and research methods.The second part is from general contract to financial contract. In this paper, "contract" of the most basic concept as a starting point, the meaning of contract, features, and general factors are analyzed. Examines the historical evolution of contract theory, which defined the concept of contract of profound history and theory, and then further explained the contract theory of freedom, equality, justice, reciprocity, and other basic values, and finally extend as a branch of modern contract theory--Financial Contract Theory. Made of the financial contract theory and development from a historical perspective of the evolution of the two theories are introduced, namely complete contract theory and incomplete contract theory.The third part is elements of financial contract. Start from general principles of financial contracts and contract theory with the relevant principles of law, initially built up the elements of the financial contract theory, the elements of a systematic summary of financial contracts is analyzed.The fourth part is typical analysis of the financial contract. In this paper, the basic concept of contract theory and the system as background, from the general principle of the financial contract, the paper analyze several typical financial contracts, namely, equity contracts, credit contracts and compensation contracts. Among them, the option contract is financial contracts of the company and shareholders, debt contracts is financial contracts between the business and creditors, compensation contract is financial contracts among managers, employees and enterprise.The fifth part is state-owned enterprises reform under the concept of financial covenants. Through some typical research and analysis of financial contracts, financial contracts system initially built, and explore problems of the current system of financial contracts.The fifth part is the concluding remarks. Re-emphasized and reiterated the need to the concept and its system of contract in the current socialist market economy. In the context of this concept, establishment of financial contracts on state-owned enterprises for the development is very important.